Sometimes, it feels like industry-watchers might be asking too much of luxury retailers. After all, is it fair to expect the latter to post stellar sales results when the global economy is chugging along, and the world is plagued by various socio-economic problems?
Asked about the slump in the Swiss watch industry during an interview with the website The Business of Fashion earlier this year, LVMH watch head Jean-Claude Biver huffed: “The industry is not in trouble; the world is in trouble.”
Another outspoken personality from the horological world begs to differ. In town for the opening party of the renovated Audemars Piguet (AP) boutique at Liat Towers, Francois-Henry Bennahmias – the brand’s CEO since 2012 – maintains: “The biggest issue the watch industry is facing is that many still work on the old model. You cannot wait for people to come to your door; that is gone. I believe that there are always opportunities to drive emotions and attention to any product.”
You cannot wait for people to come to your door; that is gone.
– Francois-Henry Bennahmias, CEO AP
Keeping his brand in the spotlight via its involvement in a wide range of events, including “sports, art and entertainment”, is one reason for AP’s strong performance in a lacklustre market. He says: “Last year, business in our segment of the watch industry went down by 5 to 7 per cent, while AP (sales) went up by 15 per cent.”
And then, of course, there are the other broad changes he has put in place – controlling supply (“we’re keeping production on the same level as last year, which is 40,000 watches”), strengthening the brand’s retail network, concentrating on directly operated stores, and aligning the brand’s 1,500 employees with the company’s goals.
We break down Bennahmias’ strategies for successfully heading a business even in tough times, and keeping AP – to use a word favoured by its younger buyers – cool.
01: BE AHEAD OF THE CURVE
Last year, the brand launched its yellow-gold timepiece collection, a ballsy move considering that most watch companies have been focusing their attention on rose gold and white gold for years.
When Bennahmias decided that it was time for AP to launch a new yellow-gold series, he said: “People told me, ‘But nobody is asking for yellow gold.’ Yes, but nobody was asking for the iPad, and the iPad came. We’re not making crazy quantities – not more than 900 pieces across several models – and people want it because it’s exclusive. And if other brands start doing yellow gold, people will say, ‘They followed AP.’”
02: TAILOR YOUR MESSAGE TO DIFFERENT CUSTOMERS
Today’s luxury watch buyers comprise not just mechanically minded men of some financial means. Audemars Piguet, like a number of other luxury watch brands, is seeing more female consumers, and younger shoppers. “We have to talk to everybody every day,” says Bennahmias.
He adds: “The difference is the touchpoints. The younger generation might react to watches because they see it on an actor or athlete, or in a movie or video. They’ll go, ‘I love that brand, it does cool things.’ A 50-year-old buyer might be more into the technical aspects. He might already have a perpetual calendar or a minute repeater, and see that we launched our new Supersonnerie (minute repeater), and think, ‘They’re improving their mechanisms.’ And, sometimes, you get someone who likes both.”
03: KNOW WHAT WORKS – BUT DARE TO EXPERIMENT
It’s no secret that AP is banking big on the Royal Oak families (including the Royal Oak Offshore and Royal Oak Concept watches) – the watches, best distinguished by their octagonal bezels, account for some 75 per cent of AP sales. Last year, however, the brand unveiled a boldly geometric women’s jewellery timepiece called the Diamond Punk, which later bagged the best jewellery watch prize at the Grand Prix d’Horlogerie de Geneve.
Recalls Bennahmias: “Everybody told me ‘no’ when I first said I wanted to do it, even our jeweller. But when he came back to me nine months later, he told me, ‘You were right.’”
04 STAY POSITIVE AND THINK BIG
Says the CEO: “I see the glass as half-full. Brands (in our category) made about 700,000 watches last year. On the planet today, about 35 to 40 million people have the means to spend money on such watches. The difference between the number of deliveries and the number of people who can afford such watches is huge. So the No. 1 question is, how do we get to the people who might not be in the know about watchmaking?”