Audemars Piguet CEO Talks Business, Auctions, & Art

Since taking the reins of Audemars Piguet in 2012, François-Henry Bennahmias has made a number of significant business decisions from reducing the number of new products launched each year to repositioning the brand’s gold watches to make them more affordable. His arrival also coincided with the Swiss luxury watchmaker’s newfound support for contemporary art, including a three-year sponsorship deal with Art Basel as well as setting up an art commission program last year that will support the production of one major artwork each year by an emerging or midcareer artist. The first commission, a fireflies and LED light installation by Robin Meier, was unveiled at Art Basel in Basel earlier this month. (read story). Blouin Lifestyle editor in chief Sonia Kolesnikov-Jessop sat down with the CEO to discuss the state of the watch market, the rise of the brand’s presence at auctions, and its art sponsorship.

Has the company been affected by the slowdown in demand out of Asia, in particular China?

Well at the end of May our sales were up 15 percent year on year on the same period last year, so no; and I can tell you right now very few watchmaking companies can claim to have achieved that. There is a real commercial war out there. Business is tough. We have retailers with too many brands and brands with too many retailers, so we all have to make choices. So far with the strategy we implemented three years ago, including our pricing policy, retailers are pushing us more than others. We have a good watch collection and a collection which is easy to understand, because we reduced the number of references a lot. We’ve increased our quality and delivery timing, and we have a great marketing strategy and interaction with our retailers. So it’s a great mix, which is helping us weather the storm even though business is tough.

How dependent are you on the Chinese market?

Actually our sales are very well balanced across the globe. For us Asia only represents 38% of our sales. So yes, China went down, but not the Chinese buying, they are just buying somewhere else. For us, Hong Kong is also steady and the Middle East is up and so are Japan, Singapore, and Malaysia. And the United States just became, again, the biggest market for us. We have a lot of pockets of wealth. And don’t forget we’re not dealing with huge quantities. We’re only producing 38,000 watches a year with an average retail price of 35,000 Swiss francs. There are plenty of people to absorb such small quantities.

Are you keeping an eye on the secondary market for your watches?

Big time, because it’s a mirror of your brand. It gives you an idea of where you are. If you sell a watch for 100,000 and three years later it resells for 35,000, then something is wrong. And the other way around. We monitor every single sale and our prices are getting better and better. In the last few years our prices have almost doubled at auction. We are still far from the best players [the likes of Patek Philippe and Rolex], but we are on a right track. We bought back a minute repeater from 1951 at auction for our own museum for more than 600,000 Swiss francs. (click on the slideshow to see recent Audemars Piguet prices at auctions)

You’ve bought back other watches, too. Why is that?

We’re going to open a brand new museum in Le Brassus in 2018 designed by BIG studio, which is also designing the new Google headquarter. We now have about 1,400 watches in our collection and we’re going to be able to showcase them in the right way. We want people to understand better what’s behind the brand because for too many years we’ve been only communicating about the Royal Oak, which has been in production for 73 years, when we have 140 years’ worth of history. We’ve only really started communicating about this in the last five years and more needs to be done.

Are there specific Audemars Piguet watches in demand at auctions?

Anything before the 1960s from the brand, you can buy blind, because we are still far from where we could be, taking into consideration the very, very small quantities that were produced at the time. They are almost impossible to find nowadays.

Do you collect anything, personally?

I have several vintage watches from Audemars Piguet. I can’t really say I collect art, but I do own some; I bought some works at Art Basel in Hong Kong, including one by Marcus Linnenbrink, one by a Hong Kong artist and another by a Japanese artist. But I buy to enjoy, not to put in a warehouse.

Audemars Piguet has been supporting Art Basel for three years now. Why did you make this commitment to the arts?

We see a lot of synergies with what we do and a lot of our clients are collecting artworks. But we want to support the arts in a very low key manner. We’re not interested in having it on our dials. We are watch manufacturers, they are artists, and we don’t want to merge the two. We can support, we can help and promote together.

Are you concerned about the development of smart watches? After quartz, could it be another tsunami for the Swiss watchmaking industry?

No. If we make an analogy with the food business, smart watches are like fast food. They’re mass produced for everybody. A billionaire can go to McDonald’s and order a Big Mac, but he’ll still go to a 3-Michelin-star restaurant, and that’s what we are. It’s not the same proposal, it’s completely different and I’m pretty sure I can find 50,000 people on the planet, that are passionate about craft and timepieces that last for a long, long time. Fast food will never kill a 3-star-Michelin restaurant.

As first published on BlouinArtinfo.com