Audemars Piguet: "It takes time to build a legendary watch"

This article is from Management magazine

Your best-seller, the Royal Oak was marketed in 1972… Except that at first nobody wanted it.

François-Henry Bennahmias: At the time, the watches that were sold were flat watches, in precious metals and on leather straps. We arrived with a steel watch on an integrated steel bracelet, sold for the price of a gold watch… No one believed it. Social networks would have existed in 1972, we would have been massacred!

It took him twenty years to become a reference and thirty years to become a watchmaking icon…

It takes time to build a legend. We held on and today it is one of the cult models in watchmaking. If you believe in the product, you must not give in to criticism. For the 50th anniversary of the Royal Oak in 2022, we will be around the theme "Forever young". The reason: she always looks very young and always speaks to youth.

However, with a first price of 20,000 euros, it does not seem intended for young consumers... Who are you talking to?

We are 8 billion on this planet. About 1% of this population, or 80 million people, is likely to buy an Audemars Piguet. But since I'm a reasonable person, I'm going to divide this number by 4. So I'm talking to 20 million people who are at the very top of the social pyramid. So if I can't sell 40,000 watches to these people, I have to change jobs.

This is purely marketing reasoning, isn't it?

No, since it is based on an exceptional product, entirely handmade in Switzerland. This all has a cost. It's expensive, yes, but it's like a restaurant with three stars in the Michelin Guide: it is impossible for it to offer a meal for 30 euros. For him, the raw material alone represents 40% of the cost price of the dish. And that, without salaries, equipment, or even the rent for the dining room and electricity. Fine watchmaking is the same thing. Moreover, visitors to our factory in Le Brassus understand why a watch is worth this price.

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You produce around 40,000 watches a year. Is the Covid crisis affecting your production?

I am at the helm of a ship that is doing well, in an industry that is going badly. Because yes, the Covid-19 crisis has had an impact on the entire watch industry. Our independence is a strength: it allows us to react much faster than if we were part of a large group. And to agree to reduce profitability so as not to put people out. The company still belongs to the descendants of the founders, who above all want the brand, founded in 1875, to still exist in 200 years and to be consistent in its quality.

What do you say to those who accuse you of limiting the production of certain parts to ensure them a very high second-hand value, even higher than new?

This strategy is smart. The waiting times are long, but it is also to maintain the level of desirability of the product. It's true that some people buy a watch to resell it for 20% or 30% more expensive two days later… We can't prevent it, it's just that we sold it to the wrong person. But for brand lovers, it's proof that they made the right choice with one of the rare products that doesn't depreciate by 30% once it leaves the store.

Is it true that you became the boss of one of the most prestigious watchmaking brands… while you were collecting Swatches?

It's true. I'm self-taught: I don't have the baccalaureate and I'm quite proud of it. I have always loved learning and understanding but I have always hated school. I joined the company in 1994, after working in fashion and having previously been a professional golfer, with very limited success. The only watches I knew then were the Swatches. I had the largest collection in the world, with around 1,200 models… In 1996, I sold my collection to Nicolas Hayek (founder of the Swatch Group), because Swatch only had one collection of all of its models. and, for safety, they wanted to have a second copy of each.