Nothing can dent the optimism of François-Henry Bennahmias. And for good reason: the man who is as much coach as CEO is one of the few bosses in the industry to be managing growth rather than trying to curb falling sales. In a struggling sector, Audemars Piguet is taking on some one hundred staff and building an extension to its museum together with an adjacent hotel. “We’re one of the few watch brands to be doing well,” the invariably upbeat CEO declared in a recent interview to Bilanz, a Swiss-German magazine. “Revenue for 2016 broke through the CHF 900 million mark while production remained stable at 40,000 units. Over the next five years, there will be no question of boosting production any more than we intend to increase prices. Growth is largely down to the fact we are selling more of our watches through our own boutiques, hence we recoup the retail margin.”
In 2011, 540 stores carried our watches compared with 320 today. The objective is 250.
According to Bennahmias, who heads one of the sector’s few still family-owned firms, “we are also reaping the benefits of decisions taken in recent years, mainly to put the House in order, and we’ve worked hard to improve the quality of products and deliveries, too. For example, the watches we show in January at Salon International de la Haute Horlogerie (SIHH) are ready for immediate delivery whereas previously delivery generally wasn’t until October. In a similar vein, we’ve cut back the number of models and retailers. In 2011, 540 stores carried our watches compared with 320 today. The objective is 250. Plus the fact the market has responded well to the products we’ve imagined. And customers appreciate that Audemars Piguet hasn’t sold its soul to the devil in order to sell more.”
Price doesn't come into it
Although Bennahmias won’t be drawn any further on the ingredients that make up this recipe for success, he is clearly optimistic not just for the company under his stewardship, but for the sector as a whole. “As a general rule, the Swiss watch industry makes revenue of around CHF 20 billion. Add on the different intermediaries’ margins and you reach end-customer sales of roughly CHF 50 billion a year. Compared with Mercedes and its CHF 180 billion, we’re small fry. But now look at the market: on the one hand, 30 to 40 million people with the potential to buy a Swiss-made luxury watch. And on the other, Audemars Piguet with its 40,000 watches, or the 600,000 or so high-end watches made by Fine Watch firms. Looking at these figures, i.e. what we are able to produce versus the number of potential clients, can only lead to one conclusion: we have some great years ahead of us. We now need to understand how we can reach these 30 to 40 million people. And price has nothing to do with it. There was all kinds of silly talk at SIHH about how the price of Swiss watches had become a real problem. Rubbish! Luxury is about the emotions, not about price. If the product is good, the client accepts the price.”
Many of those 40 million potential customers aren't familiar with the Royal Oak.
Does Audemars Piguet have any thoughts on smartwatches? “We’re thinking in all directions,” says Bennahmias. “We always have several irons in the fire, but before settling on the Royal Oak for the next millennium we need to make today’s Royal Oak a truly ultimate product. And there is still a vast amount to be done. How many people still don’t know what a Royal Oak is? Many of those 40 million potential customers aren’t familiar with the Royal Oak. If we are to reach them, we need to adapt to new forms of communication. Digital and social media are hugely important now and need to be part of any product launch or advertising campaign.” Where once again, it all comes down to quality.