Audemars Piguet CEO Expects to Exit Watchmaker With Record Sales

The pinnacle of Audemars Piguet stated gross sales on the Swiss luxurious watch model are headed for an additional report in 2023 as demand for its expensive timepieces stays sturdy.

“On the finish of July our stock was the bottom ever,” chief government officer Francois-Henry Bennahmias stated in an interview on the firm’s workplaces in Lausanne, Switzerland. Annual gross sales may climb by a double-digit share to 2.4 billion francs ($2.7 billion) this 12 months, outpacing the trade, he stated.

Audemars Piguet’s timepieces, led by its flagship Royal Oak mannequin, are nonetheless attracting consumers as economies cool and even some well-heeled shoppers really feel the pinch from inflation.

A member of the “holy trinity” of Swiss watchmaking, recognized for producing extremely sophisticated and fastidiously-finished timepieces that features Patek Philippe and Vacheron Constantin, Audemars Piguet produces some 50,000 watches a 12 months at a mean worth of about 50,000 francs apiece. It’s the No. 4 Swiss model by income, producing simply over 2 billion francs in gross sales in 2022, largely at its personal branded shops, in accordance with Morgan Stanley estimates.

One other report gross sales end result would cap Bennahmias’s greater than 30-year profession on the Swiss watchmaker, with over a decade as CEO. He plans to step down on the finish of this 12 months, to get replaced by former Procter & Gamble Co. government Ilaria Resta.

Report gross sales apart, the French-born former skilled golfer sees causes for warning. Audemars Piguet’s energy “doesn’t imply that the world couldn’t go right into a barely extra troubled time,” Bennahmias stated. “I don’t suppose we have now absolute optimism.”

He cited the slowing international economic system, Russia’s struggle on Ukraine and challenges in China, the place a post-Covid rebound has been weaker than anticipated. What’s extra, costs for used fashions have tumbled after a surge through the pandemic.

An index of Audemars Piguet watches compiled by WatchCharts is down nearly 20 % in a 12 months and eight.8 % in six months, at the same time as greater than three-quarters of the model’s second-hand fashions proceed to fetch costs above retail.

In response to rising watch theft, the model earlier this 12 months launched an unprecedented program to ensure consumers of its watches in 2022 and 2023 a alternative or refund if the timepieces are stolen.

Whereas the service has led to hundreds of thousands of francs in insurance coverage prices, the model hasn’t but been confronted with a declare for a stolen or broken watch, Bennahmias stated.

The watchmaker is growing manufacturing by double-digit percentages yearly, and elevating costs by 2% to three% a 12 months on common, the CEO stated. Output may attain 56,000 or 57,000 watches a 12 months by 2025.

Regardless of the upper manufacturing, customers on the lookout for probably the most in-demand fashions should still discover themselves on a ready record. Audemars Piguet makes at most 1,450 of every mannequin reference a 12 months and simply 1,000 of probably the most fascinating fashions, such because the Royal Oak Jumbo with a blue dial, Bennahmias stated.

The Code 11:59 — a line launched in 2019 that divided some within the accumulating group — now accounts for shut to fifteen % of income, he stated. The road is on observe to succeed in 20 % of gross sales by 2025, decreasing the model’s dependence on the Royal Oak and its Offshore mannequin spinoff.

Producing too many watches throughout good instances, solely to be left with extra stock as demand falls off, has usually been a crucial error made by luxurious watch manufacturers. Bennahmias stated the corporate’s unsold stock sits at report lows.

“That’s extraordinary,” he stated. “It signifies that we lastly obtained it proper when it comes to our capability.”

By Andy Hoffman