Hublot’s North American division is among the businesses quickly adapting to the coronavirus landscape. The luxury watchmaker, a subsidiary of LVMH Moët Hennessy Louis Vuitton, will pivot resources to focus on its digital boutique — hoping remote sales can help bolster the brand at this difficult moment.
Hublot North American president Jean-Francois Sberro told WWD that “the scale of this crisis is overwhelming,” and that all of the company’s 15 stand-alone stores and headquarters are currently closed under lockdowns. The company shut its typical business operations in North America on March 12. Around that time Hublot also said that its Swiss manufacturing hub would remained closed until further notice.
Hublot began planning for lockdowns in North America after seeing how it took hold in Europe. “We are a Swiss company. After China we saw it go to Western Europe — we knew what was coming our way [in the U.S.] and that there was no way we were going to be spared,” Sberro said.
He realized that the luxury watch market would take an immediate hit, with consumers prioritizing their health and the well-being of their family over shopping. He also placed the welfare of employees first ahead of sales. The company aims to pay 100 percent of employee salaries — including those who work in retail — throughout the duration of this crisis.
“I thought it was distasteful to put the consumption of luxury goods above all other concerns,” said Sberro. “We are in the luxury business and sell watches, which is a fantastic industry, but there are some times like the weeks in March that we need to understand priorities, like taking care of family and basic needs. Other times we can pursue some less basic needs, like indulging and acquiring a timepiece.”
While business was quiet throughout March, the company began to receive more inquiries from consumers and third-party retailers in early April. Sberro assessed the ways in which the company could resume some activities while keeping employees safe.
The Hublot digital boutique was established in 2018 as a way for the company’s watches to be sold online. The average price of a Hublot watch is in excess of $20,000, and it was thought that the click-to-buy format common at other e-commerce platforms was too impersonal for an investment of that size.
“It’s not something that you are going to acquire very quickly and spontaneously through a web site,” said Sberro. “It’s an emotional purchase, it’s a transaction that needs to be including some form of human interaction.” The site was also a way for clients living outside the major U.S. retail hubs to shop Hublot’s collections.
The digital boutique model is currently only available to U.S. consumers, but Hublot had been strategizing how to roll it out to other markets before the COVID-19 crisis hit. The U.S. is among Hublot’s top three markets, sharing equal sales with Japan and Greater China.
The company’s digital boutique currently accounts for 3 percent of U.S. sales, but Sberro hopes it will take a 10 to 15 percent share of sales in 2020. The company is still fulfilling web orders out of its Miami distribution center — allowing one employee to go in one day a week to ship out product.
Sberro is realistic about the timeline that the pandemic will take, and expects the U.S. economy will not fully recover before 2021. The company is currently expecting a “V Shape” economic recovery in the U.S., and says sales models in China are showing more of a “U shape” recovery so far.
“The end of March and April should be very hard months,” said Sberro. “We tend to take the assumption that there will be a small rebound in June and maybe things will resume in July. We are planning on [at least] two and a half months — mid March to end of May — hoping for a soft reopening of our retail network around June 1.”
When stores do reopen, Sberro was uncertain what the shopping experience will look like. “I don’t know whether we will open in full capacity for eight, 10 or 12 hours a day or have to limit the number of people in store,” he said. “This is a very strong test for the health of the company, the resiliency of the company and our leadership as well. It’s a test of how we navigate with our teams in this unprecedented crisis — how do we go through it all together?”