Akrivia LVRR-01 Chronographe A Sonnerie - What it Means

[TimeTexas]

If you don't follow @kingflum on IG and on his blog at https://www.screwdowncrown.com/

you absolutely should. Fantastic insight and perspective as well as being very well written and thought provoking. He's also funny as hell.

The article is here: https://www.screwdowncrown.com/p/sdc-weekly-17

The article discusses the Akrivia collaboration with LVMH is a great look at the behind the scenes thought process, primarily from the perspective of LV. Here's the main takeaway from the article:

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I posit Jean Arnault has a 3-part plan to shift the perception of LV Watches from being “fashion watches made by LV” to “haute horology by LV”. Why? To become a serious player in the watch industry. This is a future where LV are regarded as a genuine horological enthusiast’s consideration, rather than just another LV accessory for LV fans.

I tend to agree that this is a big first step in the overall plan to move from a fashion brand to high-end, haute horology. I also tend to agree with his summation this is bigger for LV than Akrivia but this will be an enormous boon to Rexhep Rexhepi as well.

But I think this is also going to mean an incredible increase in interest in the high-end independent haute horology watch industry.  It will change the face of the independent industry because no single independent haute horology brand can handle the influx of interest that will be gained from this. No 20 brands will be able to handle the demand. The industry won't be able to handle it and I believe this will filter down to many other brands such as Moritz Grossman, Gronefeld, Czapek, Moser, Laurent Ferrier, etc. These brands that are virtually unknown outside of watch circles but are widely considered some of the best watchmakers in the world. And quantities dictate that demand will have to go somewhere and that will be an enormous boon for the watchmakers, and likely a cause of concern for collectors who may begin to find it increasingly difficult to procure timepieces.

More on this soon, but I'm definitely interested in your thoughts. But first, go read the article at Screw Down Crown and support one of the best blogs out there - well worth the nominal cost.

[The Watch Bum]

It might be just me and it could be that my MadMen heart speaking a bit too loud, but there's no such thing as bad attention... In most cases, all these independent brands are struggling for attention and even more to sell their pieces so help is welcomed..;) It's easy to look at the successtories now, but does anybody maybe remember that Grönefeld wasn't able to sell their first 10 watches and were about to fold it all up?

LV is making a serious move into haute horology and that actually goes for all of like Bvlgari and Hermes as well but that's not necessarily a bad thing I'd dare to say as the market will decide what's hype and what's worth our penny... As far as I see it, more eyeballs toward 'indie' watchmaking is more than welcome and most creators that I know here are very happy with it as well: www.louisvuittonwatchprize.com

[TimeTexas]

Agreed, any attention is good in this case. There might be some pushback from purists, but from initial accounts, it sounds like the watchmaker has artistic license to create what they want. It did say the case used by Akrivia was a highly modified version of the Tambour. I hope that something like that isn't a requirement going forward as it could be limiting. Other than that single concern, I do believe the impact to independent watchmaking will be extraordinary. These brands are completely unknown outside of the watch world and even independent watchmaking is nearly completely invisible. Covid offered an opportunity for people who already enjoyed watches to discover new brands, and that resulted in a significant increase in demand for many independent brands. It also allowed smaller, some would say entry level brands, to begin to take the opportunity to begin rising their prices. There has been some cooling down as the overall hype market surrounding Covid and 2020 and 2021 slowed and retreated. But this is a much bigger deal, imo, and a much more sustainable driver of interest in independent brands.

I also think this will create some incredible challenges for watchmakers which I'll probably address in the other thread I started here: Rise of the Independents

The winner of the contest will likely be the second watch made, with 3 semi-finalists chosen thereafter. The list of semifinalists is extremely impressive and an excellent representation of independent watchmaking creativity and skill.

I was unaware that Grönefeld struggled that much at the beginning. Interesting, but just shows the growth in the industry.

[TimeTexas]

Copying from my other comments here.

 

I've been thinking more and more about the LVMH/Akrivia LVRR-01 collaboration and the planned 4 additional collaborations. If you haven't read the article from King Flum here, go do it now --> https://www.screwdowncrown.com/p/sdc-weekly-17

I keep trying to wrap my head around what this means for the independent watchmaking industry as a whole.

From a Robb Report article.

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Two years in the making, the Akrivia and Louis Vuitton co-creation is the first in a series of five collaborative timepieces Louis Vuitton has planned for the next five years, said Arnault. Together with the prize, whose inaugural recipient is due to be named in 2024, the partnerships are part of a broader effort to ensure that the interest in independent watchmaking, a category Arnault discovered about six years ago, doesn’t fade over the next few decades.

“LV is not a brand that’s going to disappear and hopefully we can use the huge brand name we have to shed a light on that part of the industry, which in my opinion, will move the needle more than the traditional part of the industry, which has very similar product and very little soul,” he said.

He pointed to the Akrivia model displayed behind him. “These products have soul,” he said. “It’s always a human story behind it. We’re not looking at a chart and saying, ‘Oh my God, I’m missing a product between $150,000 and $200,000 so let me do something,’ and many brands work that way, unfortunately.”

 

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https://robbreport.com/style/watch-collector/louis-vuitton-rexhep-rexhepi-akrivia-1235332874/

LVMH is the 4th largest fashion brand in the world, essentially tied with Adidas for 3rd and only behind Nike and Gucci. And the LVMH group has an enormous advertising and marketing budget which has expanded dramatically over the last several years.

*Chart/Data provided by https://www.statista.com/statistics/410677/lvmh-group-s-ad-spend-worldwide/

Despite a slowdown during the Covid year of 2020, the advertising and marketing spend from LVMH has gone up by 50% since 2019 and was nearing $10B in 2022. I imagine 2023 will see continued growth. To generate trends to support fashion products, advertising and marketing is vital and LVMH is a powerhouse. The quote above from Arnaut indicates LVMH is looking to continue to support independent watchmaking going into the future. While a lot has been made about how this impacts LVMH and Rexhep Rexhepi, I think the bigger story here is the impact on the independent industry as a whole.

This will have an enormous impact to independent watchmaking going forward. Independent brands saw a surge of interest during Covid and the meteoric rise of hype brands like Patek Phillipe, Audemars Piquet, Rolex, and even Vacheron. This hype filtered down to many of the higher-end, popular independent brands as people who previously collected the big names realized gains by selling pieces and also due to the near impossibility of getting allocations. The business practices, which in my opinion, were discreetly supportive of the grey market pricing also left a bad taste in many collector's mouths.

With time to spare surfing the internet, there was increased awareness of independent watch brands by the watch-buying public and a year ago I wrote a post about how Independent brands were in danger of becoming unobtainable. The slowdown of the madness and hype has seen a somewhat return to normalcy. Yet the increased awareness and interest in independent watchmakers has made the availability of these pieces to newcomers relatively difficult. I think indie brands are still struggling with how to manage the increased demand to keep existing customers happy while also catering to new collectors.

As to the impact of LVMH, as they become more integrated into high-end independents and haute horology, the marketing and awareness of independent watches will increase significantly. But for a few of the very well known independents, these watchmakers don't have marketing and advertising budgets of any significance. Much of the awareness is spread through word of mouth and if you know, you know.

The demand for Akrivia watches was already crazy and a limited edition piece of 10 watches will be unattainable. LVMH has a monetary incentive to allocate these 10 watches to people who will promote the watch and the brand and increase awareness of LVMH's desire to be more than simply a fashion brand, but a brand that has serious watchmaking bonafides. There isn't a better way to do it than with Rexhep Rexhepi and the following four watchmakers who are to be a part of this project.

With the release of the Tambour, Arnaut explained a completely different approach to watches within LVMH.

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We’re changing our whole philosophy about watches in general,” Jean Arnault says. He’s looking at an ambitious repositioning of the watch brand — quite the audacious move from a young gun who at 24 appears to be as knowledgeable as he is passionate about horology. His plans allow the specialists to concentrate on true watchmaking, with (uncharacteristically) not a logo in sight. He describes how watches had been grouped with all the brand’s other products but, he points out, they can’t respond to a six-month timetable like fashion. It takes much longer to create a timepiece. Now liberated from that timetable, the watch division can focus on “never cutting corners and what we’re trying to achieve in terms of finishing and expertise”. So out go the fashion-oriented timepieces — and the incoming will be solely high quality.

https://www.thetimes.co.uk/article/jean-arnault-louis-vuitton-watches-times-luxury-3rzv05fsx

This is not a short-term strategy or money grab to simply ride the previous Covid-generated hype. As the director of watches, this is a fundamental shift away from fashion and into high-end watchmaking.

The hype for Rolex and PP and AP was based on the perceived unavailability of these watches. I say perceived, because they were available, just limited to people who could afford the outrageous aftermarket prices. It was a flaunt of wealth and excess. But the number of Rolexes and PP/AP/VC is orders of magnitude greater than the availability of small haute horology independent brands. There is no perceived unavailability. They are unavailable simply because the numbers aren't there because they are made by hand and they take a signficant amount of time by extremely skilled and talented watchmakers.

With the focus of LVMH on haute horology, it only makes sense these Akrivia pieces will be allocated to highly visible celebrities and renowned collectors who get a fair share of the spotlight. The goal from LVMH's standpoint is in part to support independent watchmaking and to establish itself as a  true watchmaker starting with the Tambour. But what happens when the world at large is introduced to Rexhep Rexhepi and Akrivia through the wrist of Jay-Z or any of the other numbers of celebrities Jean Arnaut is personal friends with?

What happens when LVMH partners with other haute horology brands? We know there will be at least four others. I expect this may increase as well depending on the success.

The boon for these brands is obvious and significant. But the effect on independent watchmaking as a whole is the bigger story. As these select brands are introduced to the world, they will be nearly impossible to purchase and those that become available will be one of 10 or 20 or 50 watches, meaning the demand will far outweigh the supply. Prices for these on the grey market will skyrocket. The demand will be less about bling and flex, but exclusivity. Yes, the flaunt of wealth will still be there as prices rise, but having something so completely unattainable and exclusive will be the main driver. And supply for any single watchmaker that gets this exposure will dry up nearly immediately causing demand to filter down to the next brand and so on.

This is a sea change for independent watchmaking. A tipping point that will take independent watchmaking from the confines of knowing collectors and thrust it in front of the world to see.

Interested in your thoughts. Am I overstating the potential impact? 

More on this soon.