Interview: Audemars Piguet’s François-Henry Bennahmias On Why We Need To Protect Suppliers
Audemars Piguet’s CEO, François-Henry Bennahmias, takes time out of his busy schedule to talk about suppliers, the next generation of watch lovers, and how Audemars Piguet is dealing with COVID-19.
During the recent Grand Prix d’Horlogerie de Genève (GPHG), Audemars Piguet’s CEO, François-Henry Bennahmias, accepted three awards on behalf of the brand and used the opportunity to stress the value of suppliers in the watch industry. Watchonista caught up with him to better understand why this subject is so important to him.
During your GPHG speech, you spoke about the importance of suppliers. Why did you use this opportunity to draw attention to their value in the watch industry?
Today, I can understand the necessity for brands with timepieces at a certain price point to purchase parts from abroad, but when we talk about high-end brands, where 10 or 20 francs is not going to change much – and I choose my words carefully here – for me, the fact that these brands try and save 10 or 20 francs is not acceptable. The limit may be 60% [of Swiss components needed to obtain the Swiss-Made label], but I don’t agree at all.
In addition to this, something that is even more important right now is that we have been living in times of crisis for the last couple of months, and it will not be ending any time soon, so this will create further challenges for suppliers. I hope that the Swiss watchmaking brands will support their suppliers, so we don’t lose the generational knowledge or the talent and potentially put them at risk of disappearing from the industry.
Let’s make a comparison to a country like Japan, who at the governmental level, has put special funds in place to guarantee the sustainability of their ancestral craftsmanship, this is incredible. We should really start to think about this, perhaps on the level of the Fondation de la Haute Horlogerie, so we don’t risk seeing certain skills and crafts disappear, which would, in turn, affect what is made here in Switzerland.
We have a duty to preserve this artisanal know-how. It is a little like endangered species. Today when we talk about watchmaking in the world, the first country that comes to mind is Switzerland. Like the baguette and cheese for the French, the hamburger for the US, each country has its iconic products, and in peoples’ minds, the wristwatch is Swiss. We have to keep it this way. I hope this crisis is going to be a wake-up call, and we can all make a concerted effort to support them.
In your speech, you also mentioned how you are noticing that a younger generation of consumers is being blown away by this craftsmanship. Can you tell us more about what you are seeing?
Six years ago, everybody was obsessed with smartwatches, saying they were going to be the death of the watch industry, and it was going to be a repeat of the 1970s [quartz crisis] with the smartwatch killing Swiss watchmaking.
Today, there are almost no more questions on the subject. Why? The thing is, smartwatches aren’t watchmaking, even less high-end watchmaking. It is like comparing a three-star restaurant with a fast food place. Today, it isn’t either/or because both can live happily side by side.
In addition to this, we say young people aren’t wearing watches anymore. There might be some young people who don’t wear watches. But, at the same time, you don’t need to be 50 years old to be emotionally touched by artisanal talent. You don’t need to be 50 to properly appreciate the food made by a three-star chef. There will always be the capacity, for any brain of any age, to experience this kind of emotion.
I regularly give talks at universities. I don’t only talk about Audemars Piguet, but also about how someone like me, without a diploma, can direct a company that has a turnover in excess of a billion Swiss Francs and has over 2,000 employees. The students, the future managers, want to know this. At my last speech, which was in Taiwan, an ultra-modern, high-tech country, I had 160 students between the ages of 19 and 23 in attendance. Guess how many of them were wearing smartwatches? Just one. And it wasn’t even a current student; it was an alumnus who was 35 years old! Not a single student was wearing a smartwatch. How many were wearing watches? Half of them, and there were three APs! All this is to illustrate: it isn’t because people are young that they can’t be emotionally touched by watchmaking.
In recent years, many brands had moved towards producing manufacture-made movements, do you think we will see a return to the supplier model?
I think that for about six or seven years, the watchmaking industry hasn’t been doing so well, except for a few brands. Some brands are over-producing, they have too much space, too many machines, too many people, and sales are not matching production, so I think this will bring brands back to suppliers. Instead of wanting to do everything themselves, maybe they will start to use more suppliers here and there, but it is not guaranteed.
How important are suppliers for Audemars Piguet?
They are essential. We had a meeting with all our staff on January 21st. It was a huge meeting to talk about the current situation, future plans, etc. We brought together the 1,200 people who work for Audemars Piguet in Switzerland, plus the 800 people who work in our branch offices via livestream.
The same afternoon, we made the same presentation to 400 suppliers because we wanted them to understand how important they are to us and we wanted to explain to them that our objective is not to consolidate the savoir-faire for ourselves. Our objective is to work with the best and to work in the best possible way with them.
If you had a magic wand to change something in the world of suppliers, what would you choose to change?
My answer is going to be a little different. Most suppliers – when they don’t belong to big groups or are not a large company – are often family businesses. These companies are managed thanks to human relationships and emotions; they are always helping clients out where they can. But when they do the accounts, they can find that they are missing five or seven points of profit margin.
So, if I had a magic wand, I would give them more modern management tools to allow them to look a little clearer at their business model. This could potentially allow them to see that instead of working with 80 different brands, maybe it is better to work with the 20 best ones. Maybe 60 of the brands that they help out, don’t make them any money, or maybe even cause them to lose money.
These tools could take away the problems of management, administration, and accounting to allow them to concentrate solely on their craft.
We have spoken about suppliers during this health crisis, how are things at Audemars Piguet?
There is one thing, for me, that is ultra important. The post-COVID world will in no way resemble the pre-COVID one. There are some great things still to be done in watchmaking, tons. And I always like to see the glass half-full instead of half-empty.
It is in complicated and difficult times that we need to search for creativity and innovation, to reinforce this notion of Swiss Made because it is an incredible label of quality, and the next generation of watch lovers won’t tolerate us making up stories. They want honesty, even if we make mistakes. It is better to make mistakes, own up to them, and correct them than to say, “No, no, no, we did it right.” They won’t stand for that. They will ask us to open the curtains and show them how things work. All the marketing messages are going to be extremely important.
I think the watch industry has great years to come; we still haven’t reached everyone. We are going to have two or three years that are going to be a bit complicated to reconstruct, but it is OK. We have been around for over 150 years and we are planning to be here for another 150 years more. So, we shouldn’t react in a hurry.
We are not just looking at 2020. Everybody keeps asking me what 2020 is looking like, -20% -17%? It doesn’t matter. This isn’t what is important right now. What is important is how we are going to prepare the message for 2021 and 2022. And as we are an independent brand, we don’t have a problem in this respect. Our board of directors doesn’t care about quarterly results. There are two things that are important to them: protecting the health of our employees and jobs.
We have 2,000 employees, and we are not letting anyone go. We will dip into the reserves of the company to ensure that.
When a company feels this socially responsible, at some point, the clients will feel it too. If, after everything that we have been living through, we are not able to realize that people are paramount in everything that we do, we should do something else.
(Images provided by Audemars Piguet & Photography by Watchonista)