Where some hunt down unsold inventory on the grey market – Swatch Group is one of several taking this course of action, as it declared in no uncertain terms when publishing its 2019 half-year results -, others prefer to put a cap on production. Obviously this isn’t a solution adapted to brands that deal in high volumes – even if Rolex, whose annual production is thought to be around the one million mark, knows how to play hard to get when it wants to. Be that as it may, the decision to sell not more but better has its advantages, judging by Audemars Piguet’s extraordinary growth. Having reviewed its catalogue with a focus on quality over quantity, for the past five years almost the brand has kept annual production at under 40,000. Despite this, revenue shot up from around CHF 700 million in 2014 to CHF 1.1 billion in 2018. Another 10% rise in sales last year made the brand the seventh member of the elite circle of watchmakers earning CHF 1 billion in revenue.
For Roger Dubuis, nothing succeeds like excess
The keys to Audemars’ success have been enhanced product quality (helping clear customer service backlogs), fewer references, faster launch times, a reduction in the number of points of sale (currently 200 and soon to be 150, including 60 Audemars Piguet boutiques) and a steady upgrading of collections. This latter point is illustrated by the latest to date, Code 11.59, available only in gold with an entry price point of CHF 25,000. While not everyone is an Audemars Piguet, the idea is catching on.
Chief Executive at Roger Dubuis since December 2018, Nicola Andreatta recently announced the direction the brand will be taking, and this definitely doesn’t include an increase in production, currently estimated by Vontobel bank at 6,000 watches a year. In an interview this summer, Andreatta (who describes the brand as rooted in “excess”), said he would be reducing the number of watches Roger Dubuis makes. “It’s difficult to keep a certain level of craftsmanship and refinement if we go mass. Roger Dubuis is not for everyone and we don’t want to be for everyone.”
Exclusivity and creativity at Panerai
Staying with the Richemont group, Panerai is taking a similar approach and under new stewardship, too. Appointed just over a year ago, Jean-Marc Pontroué is evolving the brand after Angelo Bonati’s seventeen-year tenure. One of the most talked-about initiatives at SIHH in January were the “experiences” offered to buyers of limited-edition Submersibles, who can join explorer Mike Horn, free diver Guillaume Néry or Italian navy commandos on their adventures. The buzz this generated about the watches also pushed up prices.
But as Pontroué says, “price isn’t the issue. It’s about how much added value you bring to your product. Price is a cocktail of how much you bring to the table creatively, how much you bring in terms of limitation. We want to remain an exclusive brand. We will not increase production quantities in the next five years. Increased business will come through creativity, new materials, new movements and more complications.” With annual production estimated at 70,000 watches, in just twenty years Panerai has successfully imposed its unmistakable style in a market that’s clamouring for more. Time to reshuffle the cards, perhaps?