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Happy talk from brand bosses at SIHH
SIHH

Happy talk from brand bosses at SIHH

Thursday, 18 January 2018
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Christophe Roulet
Editor-in-chief, HH Journal

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4 min read

The first three CEOs to take the Auditorium stage at SIHH describe companies in excellent health. For Cartier, Hermès and Audemars Piguet, the current state of business shows that crisis is behind them and the best is yet to come.

Not all the novelties at Salon International de la Haute Horlogerie are watches. Also making its debut at this year’s fair is the Auditorium, where brand CEOs are invited to talk shop, engineers discuss technical points and experts debate. It’s a space with plenty to say that’s worth saying. And by chance, the very first afternoon lined up three executives who can all answer the question “how’s business?” with the same “doing great”. Cartier is doing well, Hermès is doing well, and Audemars Piguet is on a record-breaking roll. A year ago, such a positive attitude would have been tagged at best optimistic and at worst a case of being economical with the truth. Yet the situation in the markets has come a long way over the past twelve months, as figures for Swiss watch exports are shortly expected to confirm, with an anticipated 3% increase in shipments for 2017. Brands can claim some of the credit for this improvement in sales, with many recognising the error of their ways – errors that came on top of the crisis dogging the sector until the middle of last year.

Watchmakers should brace themselves for some bigger bumps in the road, brought on by economic cycles and currency fluctuation.
Cyrille Vigneron
A streamlined profile

“The watch sector has been under considerable strain,” commented Cartier Chief Executive Cyrille Vigneron. “The difficulties that came in the wake of the subprime crisis were followed by an upturn, particularly in China where sales took off almost to the point of outstripping supply. The contraction that came after this was both severe and brutal. Today, demand is in better shape and while the recovery isn’t necessarily evenly distributed, it is very real. How has this impacted Cartier? We have bought back huge quantities of inventory, scaled back our position at retailers and adjusted production capacity. This new balance has resulted in a return to growth.” According to Cyrille Vigneron, while there can be no doubting this growth in the medium and long term, watchmakers should brace themselves for some bigger bumps in the road, brought on by economic cycles and currency fluctuation. In other words, brands must learn to live with a significantly more volatile environment than the one to which they are accustomed – hence the need for a structure that will weather a storm, not one that will go under at the first gust of wind. An important part of this is to know precisely what a brand’s fundamentals are; those with which its customers can identify. This is something Cyrille Vigneron has also been working on for the past two years. A Cartier watch is, by essence, a woman’s watch, an elegant form watch, and this is the path the company must follow. Similarly, after pushing mechanical boundaries to the limit in its Haute Horlogerie, the brand has “reduced its development target” in this area. The emphasis now is on design.

François-Henry Bennahmias
The recipe for success

When François-Henry Bennahmias took over at the head of Audemars Piguet in 2012, he also set about refocusing the brand, “preferring to concentrate on the good and forget the bad,” as he says. It’s now reaping the rewards as it enjoys its sixth consecutive year of growth (up 12% in 2016 and almost 10% last year). “We have given priority to quality, for example by choosing to maintain production at no more than 40,000 watches a year, and we are seeing the results of this. Customers come to Audemars Piguet because they have complete confidence in the brand and are curious about what we have to offer. Knowing that the customer is the best ambassador a brand can have, this all bodes extremely well for us.” Hermès and its Executive Vice President Manufacturing Division & Equity Investments, Guillaume de Seynes, are similarly optimistic. The group’s first time at SIHH coincides with a 1% increase in sales at La Montre Hermès for the first nine months of 2017. “After some complicated years, particularly the end of growth in China, our watch business has returned to growth,” he explained. The “recipe” is the company’s particular brand of creativity, dubbed “Le temps de l’imaginaire” and which can be seen in both its men’s and women’s collections. By following this recipe throughout its 180 years of history, Hermès has achieved a consistency in terms of style that shines through in its watches. Clearly the ingredients for success.

Guillaume de Seynes
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