Audemars Piguet Reveals Plans to Cut Out Retail Middlemen within 3 to 5 Years | SENATUS



Audemars Piguet Reveals Plans to Cut Out Retail Middlemen within 3 to 5 Years

11 September 2018

By Peter Vossner

Audemars Piguet has revealed plans to have complete control of distribution of its luxury watches, cutting out third-party multi-brand retailers, within three to five years. Its Chief Executive Francois-Henry Bennahmias has added that the integration will boost sales.

"Since the beginning of the year, we've seen double-digit sales growth. We were already close to one billion Swiss francs in sales last year, we'll easily exceed it," Bennahmias said to Reuters, adding this was also a consequence of the retail integration. In addition, the brand also announced its e-commerce store will come online in 2019.

Bennahmias added that consolidation of the industry would continue and Audemars Piguet could also consider acquiring retailers. "That could come up on our radar screen," he said.

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. The new line promises unisex appeal, aimed at both sexes from the start -- unlike its bestselling 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."

On the watch industry's wholesale distribution process, Morgan Stanley's research analysts commented, "By 2023, we estimate that around 27 percent of Swiss watches, in value terms, will be sold directly by watch brands versus around 9 percent today."

Meanwhile, Richemont Chief Financial Officer Burkhart Grund also told investors on a call last November that the group believed the traditional wholesale watch trade would over time disappear. Richemont had 1,123 directly operated boutiques in 2017/18 that, together with the brands’ online stores, contributed 63 percent to group sales, including both watches and jewellery.

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