Earlier this month, in a verdant green space at the heart of Tokyo Midtown, Audemars Piguet officially opened ‘Beyond Watchmaking’ — on until 4 November and free to all members of the public. The space, designed by long-time collaborator Mathieu Lehanneur, chronicles Audemars Piguet’s 200+ year history in the Vallée de Joux. Over 150 exceptional pieces were flown in for the exhibition, complemented by original works (commissioned expressly for Lehanneur’s space) from artists Ryoji Ikeda, Alexandre Joly and Dan Holdsworth.
Along with other members of the international press, I was lucky enough to be on the ground for a sneak peek, and over the course of our hectic 2-day itinerary had the opportunity to speak with AP’s Global CEO — the inimitable Mr. François-Henry Bennahmias. (I use the word ‘inimitable’ because any interaction with Bennahmias, whether it be your first or fiftieth, is so utterly outré to what you’d expect from the traditional Swiss CEO.)
A golfer by profession — who ranked 25th on the French Golf Tour — Bennahmias is one of the best known exemplars of the new breed, CEOs preoccupied with bringing Swiss watchmaking firmly into the 21st century. On the day of our interview, hours before the opening night festivities, I’m received cordially yet casually — something that’s unusual for a Swiss executive of Bennahmias’s standing. There’s no coterie of PAs, no omnipresent waitstaff, and the man himself — dressed head-to-toe in sportswear probably more expensive than my whole wardrobe — is completely relaxed. None of this is by accident.
After leaving the professional golf scene, Bennahmias began working for fashion mainstays such as Armani, Les Copains, and Vilebrequin — brands that would go on to hone his ‘big picture’ view of distribution and branding. In 1994 he joined AP’s French office, and within three years was re-tasked with leading operations in Singapore. That appointment led to an opportunity to develop the U.S. market, which at the time was turning over a measly US$6 million — across 95 points of sale with a team of 8 people. Today, the U.S. is AP’s number one market, accounting for a substantial chunk of revenue that, under Bennahmias, has grown to US$1.1 billion (HK$8.6 billion). In this edition of ‘How to Succeed’, Audemars Piguet’s commander-in-chief talks market share, the importance of encouragement, and of course CODE 11.59. Check out the full interview below.
By meeting people. To be honest, it was completely unplanned. I met somebody in St. Barts while on holiday who I became friends with. At the time, he was looking after Audemars Piguet as a French distributor. He asked me if I’d come and run the company in France. I said “But, I don’t know anything about watches”, yet he was convinced. He said “No, I think you’ll do good”. So that’s how I started: I didn’t even know the brand when I got the offer to work for [Audemars Piguet]. It was a kind of crossroads: I was working in the fashion business before, and when this opportunity came I said “let’s do this”.
First of all, the fashion world and watch world are entirely not the same. Fashion has to reinvent itself every year, every six months. (Actually, nowadays it’s something like four times annually at least.) There’s summer collections, resortwear, pre-season — it’s not unusual to see more than four collections a year. So [the fashion industry] goes at a completely different speed. By the end of a season the product is dead: it’s on sale, it’s destroyed, but essentially it’s gone.
In the watch world, we have to think much more long term. So there always has to be much more consistency in terms of the way we act, and we look ahead three to five years minimum. In this respect, we could be described as conservative. That said, it’s a case where we’ve taken a lot of ideas from the outside world — precisely because our industry is so conservative. Personally, I don’t think of the competition as always being other watch companies. ‘Competition’ could mean so many things: it could be car companies; travel; luxury yachting; art; you name it. Because we’re at a certain price average — let’s say US$40,000 — you have to offer experiences which are pretty serious. That’s not something you have to think about if you’re selling a scarf or a handbag.
If I were to think out loud about the challenges facing [journalists in the watch world], it’s much the same as in every other industry — because people can get their information from various places online, rather than you guys. But I don’t think that’s the end of the conversation at all. I think a strong community of watch journalists is needed more than ever. I’ll go the other way round: providing that you’re good at what you do, you’re curious, and you’re sharp enough to challenge the usual bulls**t, there’s absolutely a role for that sort of voice in today’s industry.
Our sales are well-spread across the globe. Asia and Europe share pretty much the same ratio/percentage of sales. We never made the decision to put all of our emphasis on Asia — especially China. This is because we believe the brand has legitimacy everywhere (we’re present in 74 countries) and, though it’s fair to say that there’s a huge demand for our product in Asia — especially because of the population’s size — that’s not enough of a justification to increase production.
True luxury is and comes from Europe: whether it’s from Italy, the UK or France. As a major leisure destination, we know that international tourists will always go through the region — so that allows us to always keep [production] very small. At the same time, we also can’t deny the importance of North America: which has big collectors, big money, and a market which is still very much untapped when compared to other places.
Very simple: when I went to the U.S. for the first time (to open an Audemars Piguet subsidiary) in 1999, if you were to stop 1,000 people on Madison Avenue and ask them what price they’d be willing to pay for an ‘expensive’ watch the answer, best case scenario, would have been US$5,000. Ask the same question today, and the figure would be $25,000-$30,000. Easily. So the market has evolved and the customers are getting more educated, but we’re still so far from its true potential.
The way we look at the picture right now is to make a very conscious strategic choice not to focus only on the Far East, only on the U.S. or only on Europe. A balanced strategy requires us to evenly distribute our attention across the globe, to make sure that if anything goes wrong anywhere, the integrity of the brand is not affected.
We’re certainly looking at it. Today everybody is talking about pre-owned — certainly, some brands have even started — but our goal was never to be the first, it was to do things right. Because we’re independent (and in charge of our own destiny), we have the advantage of being able to take our time. [Pre-owned] will never be something that we look at as money making — it’s not about that. It’s about circling around the client.
There is a trust factor. When you interact with a brand, the trust factor is important. So who are you going to trust? In theory, I think most people would pick us. But, the day we start [to offer a pre-owned/exchange program] we must be ready far in advance, because we need more watchmakers, more benches, and more capacity in our service centres. The trade-ins we’re going to take are on top of the existing work of our watchmakers. And if we’re not able to balance everything, we won’t be able to deliver our repairs on time anymore. We don’t hire or train personnel in 24 hours, so the day we press ‘START’ on this initiative we’d better have the watchmakers ready to go.
I would have to say — if we’re talking about an area where there’s a lack of understanding as to what’s at stake — then servicing. Not marketing, not branding, not retailing. [Servicing is] very complicated. Don’t forget: in theory, you can bring in any model of watch by Audemars Piguet and we have to be able to service it. So for instance, if you find a pocket watch (manufactured in 1891) and send it in for repairs, we have to ensure it works the way it did back then — which requires us to have the right experts with the right skills. Our customers benefit from an extended warranty, and sometimes that causes issues. For example, movements in quartz that were used in the 70s or 80s might not exist anymore, so then we have to offer other choices.
We either find a replacement movement — provided that it works — or offer a brand new watch (though that’s a very tiny percentage of cases). But going back to the service itself, you have to think about it this way: a basic automatic has 200-and-something parts in it. Now imagine a puzzle that’s finished. ‘Repair’ means you take every single piece out one by one — effectively disassembling the puzzle — wash them, clean them, replace whatever has to be replaced and then reassemble. No matter what, even for a basic automatic movement, that takes 10 hours — if everything goes right. By the way, there’s not a single watch company on the planet that makes money through its service centres — it’s a money losing business. But that’s okay. It’s all a part of providing the right experience for our customers.
[Jokingly] We haven’t sold a single one. It’s a complete failure. Actually, this is my last day at Audemars Piguet — which is why I was drinking so much sake last night!
We are on the right track. First of all, [the collection] is selling and it’s important to note that the people who came after us [on social media] are not the ones buying. So the clients have answered. We always take the ‘feel’ of the market, and at the moment we’re seeing that more than 50 percent of the clients buying [CODE 11.59] are individuals who have never bought Audemars Piguet before. We see that the average age is between 25-35 years old, so the demographic is energetic, fresh and young.
With this particular collection, the goal was always to attract clients who hadn’t purchased from us yet, and the fact that we’ve doubled our production for next year — based on present performance — is good news. Does that mean that nobody is ever going to come after us again on social media? No. But we’ve never been more clear on what’s coming next for a collection: in terms of material, movements, everything. You mention the movements by the way: if there’s something we can unequivocally say, it’s that people criticised us much more on the look than the movements. Nobody bashed us on the movements, as I recall.
It was a very good experience. We learned a lot. But was the goal to say “oh if this works, we’re going to expand and tomorrow we’ll sell 10,000 watches online”? Absolutely not. Because right now we’re still assessing what the full potential of the digital market is and what our endgame there will be. Let me be clear: the endgame is not to sell watches online, it’s to add a new tool (called the internet) to potentially facilitate clients who don’t have a store nearby. The goal for us has never been “go to the Audemars Piguet website, put your watch in the basket and checkout”. Never.
Careful, I can slap people pretty hard.
I don’t mind if our clients use digital channels to check availability and pay in the manner that’s most convenient for them, so long as during that process we’re given the opportunity to speak with them a little bit, and offer something like personalised delivery to their house. That could be something. This is of course, unless the client says “I don’t want to know anybody from Audemars Piguet. You’ve got my money, send me my watch”. But, at that level, I doubt that this would be the norm.
“Learn how to say congratulations to people who work hard yet sometimes make mistakes.” It took me a long time to understand the way this wisdom works. Actually, it wasn’t until I moved to the U.S. that I finally understood. From a pure educational standpoint, we [gestures to the AP team members in the room] were raised — whether in France, Italy or Spain — in a very Latin system. If you had bad grades, you were nothing. And one of the reasons I always hated school and I wasn’t productive, was because I was constantly hearing that I wasn’t good at anything.
So the piece I’m wearing [shows CODE 11.59] I’ve dubbed my ‘Francois the rebel’ watch. At SIHH 2019 I was wearing the Supersonnerie — the most expensive watch of this collection — and some of the CEOs and managers from various markets were complaining that they couldn’t sell our more expensive pieces because they weren’t wearing the same thing (they wanted tourbillons, perpetual calendars, et cetera).
Of course, we don’t make that many of the high complications, so it was out of the question they’d all get to wear them. So I said “since you’re weak enough to b**tch like this, I’m going to wear the simplest piece and I bet I can still sell our clients a Supersonnerie”. So, it’s a sort of metaphorical lesson: if you’re great at what you do, you’ll be able to sell the product, regardless of what you’re wearing.
If you’re visiting Tokyo, you can catch ‘Beyond Watchmaking’ until 4 November 2019 in Roppongi, from 11am-7.30pm daily, at . To register, visit Audemars Piguet online.