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iW Interview: Francois-Henry Bennahmias, CEO Audemars Piguet

Working together as a team is a primary strategy at Audemars Piguet, and Francois-Henry Bennahmias is the head coach. He has been with Audemars Piguet since 1994 and served as its U.S. president from 1999 to 2012, when he was named interim CEO. Officially starting as CEO in 2013, Bennahmias has helped propel Audemars Piguet to very strong growth in each of the years since.

Francois Henry Bennahmias

We caught up with Bennahmias recently for a chat. Below are excerpts from our discussion, in which he explained how teamwork creates a smarter workforce – and helps drive sales.

Can you give us a snapshot of Audemars Piguet in 2018?

This year we have 100 novelties and more creativity than ever before. It’s a continuation of 2017, but next year we will be working on something big –very big.

The Audemars Piguet manufacture, Le Brassus

What we see is a continuation of what we have seen for the past six years. Last year was our best year ever. Again. That’s six years in a row we’ve had a better year than the previous year. We grew the business by 12% and have almost reached the billion-dollar mark in revenue. We are very pleased, and this year has been a continuation of that.

How do you explain that success?

We research everything, but the most important thing is we bring people together. We make sure everybody gets smarter every day. When I arrived as CEO of this company, even though everybody was wearing an Audemars Piguet jersey, there were many different teams. The watchmakers could judge the marketing, the housekeeper could judge the sales people – it was not one team.

Inside the Audemars Piguet workshops

My biggest reward is to have managed to bring everyone together by being very clear on the strategy and very clear on the way to get there. Everybody is now aware of what the company stands for and what you have to do. It has made everybody’s life better and we are smarter together as a team. We are not the best as individuals, but as a team we are.

How does Audemars Piguet combine design and mechanics?

There is not one without the other today. Every time we work on things, we have to look at improving and surprising. This year we have launched the RD#2 Perpetual Calendar Ultra-Thin, a brand-new mechanism and a brand-new way to think about it. It’s going to open many doors in high-end watchmaking for years to come.

Royal Oak RD#2 Perpetual Calendar Ultra-Thin up close

Whether it’s treatments or the materials or the design of the watch, we look at these things every day. We have to challenge our teams left and right on everything we do, whether it’s on the mechanical side or the design side.

Back view of the Royal Oak RD#2 Perpetual Calendar Ultra-Thin

How does Audemars Piguet deal with online sales?

Today you have a roughly 2.5 million websites promoting sales of watches. A ton of them just have the copies of the catalog, and if you call they will say "I will try to find it for you." But they don’t have them. There are three to four major players in this world.

Today when you find watches online, it is from two things. One, if you have any price difference – no brand in the world can guarantee what differences in currencies will be. People play with small differences, like the stock exchange. On this nobody can do anything.

The 2018 Audemars Piguet Royal Pak Offshore Tourbillon Chronograph

But what you have to do is monitor the grey market to see at what price the watches are sold. If your pieces are sold on the grey market close to the retail price or even more than retail, you’re the king. If your watches are sold on the grey market for 25% to 40% off, then you are in trouble.

If that is the case, it’s because the brand is not performing as well. Retailers are throwing the watches on the grey market, brands are throwing their watches on to the grey market. So it’s a mix of many things.

Royal Oak Offshore Grand Complication

What we have seen for Audemars Piguet in the past six years is that the brand is doing better on the grey market because you don’t find so many crazy discounts. A lot of grey market sites offer big discounts, but if you call they never to have the watch. They only try to attract you and maybe convince you to buy something else. When you start to see on that website, available in 24 hours, then it’s real. They have them in stock.

Can you control this?

We are going to control this better by reducing our network now and by shifting ourselves to be in our retail stores. We will never stop the grey market. It’s the price you are sold at that matters. This is how we have to look at any ‘bad’ watches, and then, when we can say it doesn’t sell, we take them out of the collection. We have to be ready to do that.

Has Audemars Piguet increased production?

I said that in 2015, when we reach 40,000 watches, we would stick to that for five years. And we have not moved.

Royal Oak Offshore Selfwinding Chronograph--new in 2018.

What we have been doing as a choice, to limit production, has paid off. It is paying off every day. People respect us because we are not chasing volume. How we can manage to increase revenue is because we shift our business from being a wholesale to being a retail business. We are shifting more and more business to our stores. Every day I bring watches from a multi-brand retailer to our own stores we are increasing revenue – without increasing quantity. I am also increasing the quality of the perception of the brand.

You will continue to reduce your use of retailers?

In three to five years we will have fewer retail partners than we have today. But, the best partners we have will be very happy. I am not saying we will have zero partners, I am saying we will have some partners, and those that stay will be very happy.

The consolidation we are all seeing in the retail world is not only for Audemars Piguet, but also in the food and beverage industry, the car industry… anything. The end consumer doesn’t want to have more people between them and the people who make the product. They want to shrink the number of people in between.

Royal Oak Concept GMT, now with a flying tourbillon

That’s not us saying this, that is the end consumer. They trust that the brand is always better. And that is something you see everywhere, every day, all over the world. Any multi-brand retailer that isn’t doing better than his competition right now will have some real issues to stay alive.

Vasken Chokarian is director of iW Middle East

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