Audemars Piguet CEO Sees Bumpy Road for Watch Industry

On the first day of the Salon International de La Haute Horlogerie (SIHH) 2016, Audemars Piguet’s CEO François-Henry Bennahmias was relaxed. The Swiss watch industry has been feeling the effects of the rise of the Swiss franc against most currencies (making its products more expensive internationally) as well as a marked decline in demand from the Asian market over the past year and is now expected to post its first drop in exports in five years for 2015, but Bennahmias said his company has not been affected by the recent worsening economic market.

In fact, Bennahmias tells Blouin Lifestyle the watchmaker has “had a great year in 2015, it’s going to be a good vintage,” and adds the modus operandi for 2016 was to go ahead “full throttle.”

“We know exactly what we need to be doing and we are here to push further and to gain market share on the others,” he says.

But when it comes to the rest of the industry, the CEO was less optimistic: “Some brands will do great, and some brands will do even worse [than in 2015]. We are in a very shaky world right now, nobody can say what’s going to happen. Everybody will have to find their own way. It’s a big storm, some boats will go through it and some boats will go down.”

He then cautions: “Some brands could simply disappear, and if it’s not in 2016 it will be soon [after].”

Here are extracts from the interview:

On how Audemars Piaguet is managing to do well:

It’s a combination of different factors. Everything that we’ve put in place over the last four years is paying off. We have had a strategy that is very clear [reducing the number of new products launched each year; repositioning its gold watches to make them more affordable] and we’re not deviating from that. We’ve very focused and everybody knows where we’re going, at what speed and why, and I think that’s why we are successful. Also, because we are allowed to make our own choices, not like a big company which has to answer to outside shareholders, is a huge advantage for us. If we continue in our strategy, I believe we can come out of the storm better than before.

On the rising importance of women as customers:

They’re almost 30% of our sales. Three years ago, they were maybe only representing 20% of our sales. We may go to 40-60%, maybe, but as we’re not going to increase production for many years — now at 40,000 watches a year — if we increase our ladies watches we need to decrease our men’s watches and that’s not something we really want to do.

On the situation of Asian retailers:

Hong Kong used to be one of the cheapest places in the world to buy watches. Their edge used to be competitive pricing, but they don’t have that anymore. They haven’t worked long enough on the value of the experience [of buying a watch], so business is going down. Chinese customers are no longer buying in Hong Kong, because they are buying in other places around the world, so they have to reinvent themselves. Luckily, we’re still doing OK in Hong Kong. We’ve had a decent year. Not great, but decent.

On where demand is coming from:

The Middle East market is still very active. Oil prices maybe going down, but sales are going up, big time. Japan is also doing better.

And if he had to buy only one Audemars Piguet watch this year?

The Royal Oak skeleton in rose gold, because I love rose gold and I was the one behind this one. So it’s going onto my wrist as soon as SIHH is finished.

As first published on BlouinArtinfo.com