Swiss watch maker to reap benefits of time
Audemars Piguet, the Swiss maker of the Royal Oak watch, plans to open stores to buy and sell second-hand timepieces, seeking greater control over its products throughout their life cycle as the industry looks for new sources of growth.
The pre-owned business could be 10 to 20 times the size of the market for new watches, CEO Francois-Henry Bennahmias said at a show in Geneva.
Until now it has mostly been left to auction houses, independent local shops and online platforms such as Amazon and eBay, with Swiss brands focusing on building an aura of exclusivity around new creations.
“We have to recapture that market, because we believe we can do that better,” he said in an interview at the Salon International de la Haute Horlogerie.
Switzerland’s four-centuryold watch-making industry is experimenting with new strategies after a multiyear slump that came amid a crackdown on corruption in China and the rise of the smartwatch. In 2017, export growth of about 3% was a far shot from the double-digit pace of the previous decade.
Audemars Piguet, which makes about 40,000 new timepieces a year and is one of an increasingly rare breed of large independent watch makers in an industry dominated by Richemont, Swatch and Rolex, will open stores selling used models of its own brand within three years, Bennahmias said.
The brand has tested the concept at a shop in Geneva’s Grand Hotel Kempinski, and it plans to test the idea in the US and Japan. Audemars Piguet is not the only watch brand looking into the second-hand business.
Jean-Claude Biver, head of LVMH watch brands TAG Heuer, Hublot and Zenith, has said he is considering entering the used watch market.
Audemars Piguet is also planning a new line to complement the Royal Oak and is offering a free extension of its guarantee to five years to buyers who register online.
Its revenue rose 12% in 2017, nearing Sf1bn (R12.27bn).
In 2019, the watch maker would unveil a new line with unisex appeal, Bennahmias said. It would be aimed at both sexes from the start — unlike the Royal Oak, which was originally conceived as a men’s model, with women’s versions added later. The new watches were not small but fit well on female wrists, the CEO said.
“We won’t sell it as a men’s or a women’s line. It started more masculine, but I think women will buy it as well.”
In the second-hand business, watch makers may need to act fast as e-commerce threatens to corner the market.
Amazon already has listings for certified pre-owned Audemars Piguet watches ranging from $2,995 to $196,995. New versions of the Royal Oak start at about $12,000 to $15,000.
Bennahmias compared the approach to car brands bringing sales of used models in-house, giving them greater control over what happens to the vehicles after the initial sale. The plan is to keep the stores selling vintage and new watches separate as the offers attract different clients, he said.
“We can’t leave this in the hands of people who are not the creators of the brand,” the CEO said.