Audemars Piguet to Challenge Vintage Watch Market With Own Shops
(Bloomberg) -- Audemars Piguet, the Swiss maker of the rugged Royal Oak watch, plans to open standalone stores to buy and sell secondhand timepieces, seeking more control over its products throughout their life cycle as the industry looks for new sources of growth.
The preowned business could be 10 to 20 times the size of the market for new watches, Chief Executive Officer Francois-Henry Bennahmias said at a show in Geneva. Until now it’s mostly been left to auction houses, independent local shops and online platforms like Amazon.com Inc. and eBay Inc., with Swiss brands focusing on building an aura of exclusivity around their 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-century-old watchmaking 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. Last year’s export growth of about 3 percent was a far shot from the double-digit pace of the previous decade.
Audemars Piguet, which makes around 40,000 new timepieces annually and is one of an increasingly rare breed of large independent watchmakers in an industry dominated by Richemont, Swatch Group AG 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 store in Geneva’s Grand Hotel Kempinski, and it plans to start trials in the U.S. and Japan.
It’s not the only brand looking into the secondhand business. Jean-Claude Biver, head of LVMH watch brands TAG Heuer, Hublot and Zenith, has said he’s considering entering the market.
Audemars Piguet is also planning a new line to complement the Royal Oak, and it’s offering a free extension of its guarantee to five years to buyers who register online. Its revenue rose 12 percent in 2017, nearing 1 billion francs ($1 billion).
Next year the watchmaker will unveil a new line with unisex appeal, Bennahmias said. It will 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 aren’t small but fit well on female wrists, the CEO said.
“We won’t sell it as a men’s or a women’s line,” he said. “It started more masculine, but I think women will buy it as well.”
In the secondhand business, watchmakers may need to act fast as e-commerce threatens to corner the market. Amazon.com already has listings for certified preowned Audemars Piguet watches ranging from $2,995 to $196,995. New versions of the Royal Oak start at around $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, the CEO said.
“We can’t leave this in the hands of people who are not the creators of the brand,” he said.
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