Audemars Piguet’s New CEO Could ‘Stop Growth’ to Focus on Desirability and Independence

Le Brassus, SWITZERLAND – Audemars Piguet’s new CEO hasn’t simply inherited massive sneakers to fill, however a white desk so massive she might host Christmas dinner round it.

Talking from her workplace within the sleepy Swiss village of Le Brassus, former Procter & Gamble govt Ilaria Resta means that the luxurious watchmaker might have to pump the brakes earlier than shifting forward: After revenues tripled in the course of the previous decade underneath predecessor François-Henry Bennahmias, reaching 2.3 billion Swiss francs ($2.6 billion) final yr, Resta might cease the clock on fast progress.

“It’s not my goal to maintain the expansion of the previous,” Resta stated. “I’m right here with one other mandate, which is to solidify the corporate for long-term independence. I’ll take the selection really to cease progress for a few years.”

Resta’s appointment was introduced final Might, stunning an business liable to advancing skills from inside. Beforehand a senior govt at massive shopper manufacturers like Duracell and Tide, the 50-year-old Swiss-Italian nationwide had no earlier watchmaking expertise however now finds herself on the helm of considered one of Switzerland’s “Massive 4” unbiased watch corporations. The transfer echoes French big Chanel Ltd.’s choice to convey on Leena Nair, a human assets veteran from shopper big Unilever, to revamp the corporate’s construction and tradition.

“You see only a few outsiders across the watch business,” Resta says. “It’s sometimes individuals who have been groomed on this business eternally. Throughout the interviews, I had the sensation I used to be the one one not coming from the business. It was a brave selection [by the board] to look outdoors the apparent roster.”

Now, a curious business desires to know who Ilaria Resta is and what it ought to count on from this one-time champion of worldwide shopper manufacturers. A multilingual govt born and educated in Naples, Italy, Resta describes herself as a “servant chief” and an open e book – “I’m not an actress,” she says.

Resta’s unassuming persona and cautious method to progress set her other than her predecessor, a charismatic determine who leveraged the facility of avenue tradition to turbo-charge Audemars Piguet’s enterprise. One analyst backed Resta’s appointment.

“François-Henry Bennahmias’ successor wanted to be his reverse,” says Oliver Müller, founding father of LuxeConsult and co-author of Morgan Stanley’s most up-to-date annual Swiss watch business report, printed final week. The report estimated that Audemars Piguet’s surging revenues depart it trailing solely Rolex, Cartier and Omega, and forward of Patek Philippe. “It wants a supervisor and never a showman, an organiser fairly than a salesman,” Müller provides.

Resta inherits a full pipeline. Within the coming months, Audemars Piguet is because of relocate its manufacturing actions to a brand new 17,000 square-metre facility in Le Brassus dubbed “The Arc”. She will even have to determine the way to keep relationships with the portfolio of A-list spokespeople and shoppers Bennahmias constructed up over a 25-year interval – Arnold Schwarzenegger, Jay-Z, LeBron James and Serena Williams amongst them – amid a luxurious market extensively acknowledged to be coming into uneven waters.

After which there’s navigating the stark tradition change. Resta has lived in Switzerland for 20 years, however admits her first impressions of Le Brassus, situated 60 kilometres north of Geneva, have been that it “didn’t belong to this century.” In the identical vein, she says she’s “volcanic when it comes to concepts” and is having to adapt to the watch business’s slower tempo.

Sale Rumours

Some have puzzled whether or not the logic of Resta’s appointment was to convey group expertise to a family-owned firm readying on the market. However she refutes this. “I do know this was the notion,” she says. “However independence is completely the way forward for the corporate and the need of the board and the shareholders.”

As a substitute, her job is to shore up the enterprise’ construction after its latest meteoric progress. “I have to create worth by making it strong sufficient, resilient sufficient and qualitative sufficient to withstand any turbulence out there and survive and thrive as an unbiased firm,” she says.

The Swiss watch business has reported a major decline in export volumes since 2015, with the variety of timepieces offered falling by 12 million or roughly 40 %. The worth of exports has grown to report ranges, nevertheless, as common worth factors soared. Prime-end gamers like Audemars Piguet or rival Patek Philippe more and more drive the market.

Audemars Piguet’s present annual manufacturing hovers round 50,000 watches, a determine that Bennahmias had stated beforehand might broaden to as a lot as 70,000 as soon as the brand new manufacturing facility is totally operational. Resta is reluctant to speak numbers, although. “I don’t need to push amount,” she says. “Numbers are deceptive, as a result of producing a watch with hours, minutes and seconds may be very totally different to a perpetual calendar.”

Like different prime watch manufacturers, Audemars Piguet sellers are nearly at all times offered out of fashionable types, resulting in surging costs on the secondary market. However the common markup for second-hand watches from the model has slipped to 14 % above retail, lower than half the common premium on Patek Philippe, the place second-hand watches promote for almost 35 % greater than at main sellers, in line with worth aggregator WatchChart. The narrowing hole with retail might recommend that model’s properly of pent-up demand isn’t as deep as beforehand believed — which might provide one clarification for why Resta is much less passionate about lifting manufacturing than her predecessor.

Altering Market

Resta enters the business at a time when the watch enterprise isn’t solely turning into extra upmarket, however extra various.

“We see curiosity in [more expensive] issues rising greater than within the easiest items,” Resta says. Curiosity in ladies’s watches is on the up, too. Resta says round 25 % of Audemars Piguet’s direct shoppers are ladies, with a goal of 30 % in two years. Whereas Resta is considered one of solely two feminine chief executives amongst Swiss watch pure-players (alongside Catherine Rénier at Jaeger-LeCoultre), she says she’s much less considering creating watches for ladies than in ensuring the model is providing the proper merchandise to attach with anybody.

“Genderising a watch is beginning to develop into irrelevant,” she says. “The large change I’m making an attempt to convey is to take a look at the clientele based mostly on the driving force of buy and their behaviours once they put on a watch. That approach, you may provide them a watch that matches their way of life.”

Studying Curve

As Audemars Piguet’s chief govt, Bennahmias was a larger-than-life character who was understood to have endured a fractious relationship with its board. “Resta is clearly good and can perceive that the model is the star, and that she should keep away from being too seen,” says Müller. “The chief govt is right here to serve the model and never vice-versa.”

Resta labored hand-in-hand with Bennahmias throughout a five-month handover interval that started in August final yr, earlier than previously taking the reins from January. She says the duo bonded “from the primary cup of espresso”. He described her as his “little sister” and the 2 appeared in a light-hearted social media movie in December saying her as his successor.

What recommendation did he give her? “I didn’t ask him for recommendation, and he by no means gave it to me,” she says. “We agreed that when there’s a change of management, there’s actually a change. And I wished to hearken to all of the inputs, as a substitute of being guided by my predecessor.”

Resta’s method appears to be much less about rocking the boat. “It’s a failure if the corporate adjusts to me,” she says. “As a result of I’m one out of two,700 folks right here.”

As an outsider to the business, she might want to be taught rapidly. That is perhaps her forte. In addition to her native Italian, she speaks French, Spanish and English, the latter discovered when she joined Procter & Gamble as a graduate in 1997. She says that as a toddler, she wished to be a Greek and Latin lecturer, and that she’s studied historical past, philosophy, classical literature and monetary arithmetic. On the College of Naples, she learn economics and advertising.

She’s already picked up watch lingo, riffing on favoured matters like issues, métiers d’artwork, hand-finishing and the prolonged cycle behind bringing a mechanical watch to market. She’s additionally discovered the acquainted senior watch govt chorus that whereas being functionally “ineffective” in a digital age, mechanical watches are “for eternity.”

She nonetheless winces when speaking about how lengthy it’d take for a product along with her fingerprints on it to reach: The product cycle for the subsequent few years was determined earlier than she arrived. Subsequent yr, she says, we’ll see a challenge that she’s fast-tracked, however for now she gained’t go into specifics.

“What’s related for us is to be sure that we interpret time for our shoppers in a significant approach,” she says, admitting that provides little away.

One factor she’s clear on, although: “We don’t need this firm to be a Royal Oak firm,” she says firmly. Diversification can be a precedence, as in her predecessor’s closing years. She says there’s “a whole lot of pull on Code 11.59,″ a set launched 5 years in the past that she says now accounts for 11 % of the enterprise, and that relating to launching new traces “there’s undoubtedly fertile floor for extra.”

Direct-Gross sales Push

Resta plans to pursue Audemars Piguet’s retail technique, the place a push to chop down on wholesale stands other than most rival watchmakers. Beneath Bennahmias, the corporate slashed its international community of distributors and opened a community of its personal shops, together with 20 AP Homes — discreet city areas which might be extra like trendy personal members golf equipment than shops. “We create a real friendship relationship with our prime shoppers,” she says, including that direct-to-consumer gross sales now account for greater than 90 % of the corporate’s turnover. “It’s a nice luxurious for us to know precisely who our shopper is.”

And what about these high-profile ambassadors, spanning hip-hop, actors, and golf?

“I’ll undoubtedly not select [collaborations] based mostly on my passions, or my private pursuits,” she stated, scotching the concept just because she’s a tennis fan that Audemars Piguet would sponsor pickleball, one of many world’s quickest rising racquet sports activities.

However she commits to investing in cultural relevance by way of music, artwork and sport, and praises the product and advertising technique she’s inherited. “The magic of what has been executed to date is that Audemars Piguet actually spoke to the folks of society of the second with out selecting an elite route,” she says.

Truthful Play

One query she should reply quickly is whether or not to take part in Switzerland’s annual watch truthful, Watches and Wonders Geneva, the place Rolex, Patek Philippe and Cartier are among the many exhibitors. Bennahmias took Audemars Piguet out of the occasion’s precursor (the Salon Worldwide de la Haute Horlogerie) in 2019, citing the corporate’s change to a retail mannequin and the truthful’s inaccessibility to the general public.

Will she take it again? Not this yr, although the door is open. “This business is sufficiently small that there isn’t any warfare,” she says. “It depends on the success of all of the gamers, not one participant and we’re sizeable sufficient to contribute to our companions in it. So I’m serious about what our position is perhaps within the truthful. However my plea [to the organisers] can be to make it extra open to the general public, as a result of this business must develop into extra democratic and approachable.”

This yr’s Watches and Wonders occasion in April will embody three public days.

Democratising the shop idea can be on the agenda, as AP Homes typically give the impression of being closed to newcomers. “We’ll just remember to can go into AP Home even with out an appointment,” she says, including that in her software course of she was welcomed on the Geneva location as a thriller shopper with out an appointment or an Audemars Piguet on her wrist. However she admits there’ll at all times be an imposing safety guard on the door. “It’s not the place the place you purchase a baguette,” she presents.

Bennahmias’s Muhammad Ali poster and full-scale Terminator mannequin might have left the constructing, however the govt’s shadow will loom massive within the coming years.

Resta appears unfazed by the legacy she should now decide up, insisting she has a transparent temporary for the corporate’s subsequent steps. “As I informed you,” she says. “Development isn’t our primary precedence. Our primary precedence is the repute of the model and the standard and innovation of the timepieces we make.”

“The fantastic thing about this business is that you just don’t need to do it quick,” she provides.