LVMH Takes Minority Stake in Movement Maker La Joux-Perret (LJP)

An interesting development this week, in the world of Swiss watch movements -- LVMH (parent of TAG Heuer) has purchased a minority stake in the movement maker La Joux-Perret. LJP is controlled by Citizen, and has been supplying the movements for the Solargraphs (Aquaracer and Formula 1). LJP also offers a range of mechanical movements such as the G100 (comparable to the ETA 2824) and the L100 (comparable to the Valjoux 7750).

With so many of the major watch groups seeking more control over the companies that supply movements, this transaction seems to make sense for LVMH.

Here's a posting in SJX that covers this news -- LVMH Takes Minority Stake in Movement Maker La Joux-Perret

Jeff

Does that mean they're working towards making the Solargraph an in-house movement?

I'm not sure how much of LJP LVMH will own and I'm also not sure about the exact definition of an in-house movement. We saw TAG Heuer using the Zenith El Primero movement for a variety of models; I would say that this counts as "in house" when the movement is made by another brand within the corporate group.

By buying a stake, I guess they're taking a share of the profits from their own purchase (effectively getting a discount on the cost of the movements). And if they can call it in-house, then they can probably charge more for the end-product too. But I imagine they would be cautious about claiming this given how the 1887 movement caused a lot of controversy for them after the base design was based on a purchased Seiko movement.

I think it's a good step towards ensuring a reliable supply of movements. After all, ETA stopped supplying non-Swatch companies, it could be rather ... inconvenient ... for them if someone bought Sellita and did the same thing.

Seems to make sense, they have Zenith producing for the higher end LVMH models and they need to secure large scale supply for its high volume pieces.

Doesn't mention the share stake or terms, but I would imagine they will push for a seat on the board which will give them the chance to steer priorities & protect against moves from other brands to take over supply.

Here is an in-depth analysis of the LVMH investment in LJP, published on the Screw Down Crown blog -- SDC Weekly 122; LVMH buys minority stake in La Joux-Perret

I believe that this posting is not behind the SDC paywall, but I may be wrong.

Jeff