“We are going to [see a] dematerialisation of retail,” Audemars Piguet CEO François-Henry Bennahmias pronounces in an interview with WatchBox. “I don’t need four walls to sell you a watch tomorrow.” (No word on how Audemars Piguet dealers feel about their dematerialisation.) According to watchpro.com, Bennahmias’ bet on online/home visit sales is based on . . .
Audemars Piguet’s success selling forty of their unimaginative retro retread $53k [Re]Master01‘s during the global lock down.
To be fair, in 2018, Bennahmias made his employer $2b in 2018 selling 40k watches (average watch price $50k). But that was then, and this is now. Make no mistake: the traditional watch industry is in turmoil. Discombobulated. Bennahmias:
Maybe in our industry the future is not looking to hire people that have been working in our industry for the past 10-20 years, but to look completely outside towards the world of hospitality. The next people we hire might come from the hotel or restaurant industry; we will see.
Pepsi Apple much? (How’d that work out for ya?)
The Young Prince is clearly contemplating
defunding “re-imagining” its sales and distribution channel: cutting its authorized dealers out of the loop (as predicted here and here). Meanwhile, competitors are struggling to survive.
Carl F. Bucherer just announced that it’s terminating 220 employees. They’re eliminating 170 jobs of those jobs at the company’s HQ.
Before the cuts, the Swiss watchmaker employed 2,400 people. Deduct the 100 U.S. jobs already axed from the corporate payroll at Bucherer’s Tourneau subsidiary, and the group has trimmed its labor force by just under 10 percent.
One suspects the cuts would have been deeper – industry-wide – if Swiss watchmakers weren’t unionized.
While Swatch has been talking up the post-COVID 19 recovery, the combination of the smart watch crisis – for which Switzerland still doesn’t have an answer – and the pandemic is decimating the traditional watchmaking. The lack of Asian tourists has exacted a particularly terrible toll.
[Bucherer] says the current recession and likely travel limitations until Covid is completely controlled, means it has to prepare for a lengthy downturn that could last into 2023.
That’s the same timeline mooted by Richemont Chairman Johann Rupert (Coronavirus Watch 28).
watchpro.com is closerthanthis with Chrono24.com. WP’s “analysis” of the chart above – showing the Rolex GMT-Master II’s “estimated worth” – highlights the willful delusion that characterizes many of the main players reeling from Coronageddon.
Secondary market players including Chrono24 and Chronext have reported that prices have dropped by up to 24% for watches like the Rolex’s Rolex GMT Master II Batman, which could be another sign that the market is expecting shortages to ease.
Buyers are backing off because they expect Rolex to produce more grail watches – and they’ll get access to them? That’s some serious spin, considering the supply – demand equation outline in the next section of the article:
During his investor call, Brian Duffy, CEO of WOSG [Watches of Switzerland Group], made a simple, but potentially important observation when he suggested that the Covid crisis has reduced demand this year faster than supply has dropped with watchmaking factories closed.
“Supply is always our biggest constraining factor,” Mr Duffy says. “But we are seeing a bigger impact on demand than on supply.”
He believes production will be down by around 25% across the luxury watch industry this year.
Online or off, a 25 percent sales drop is nearasdammit cataclysmic. It’s actually worse than that. The stat is an average. As our man AJ pointed out, when money’s tight, people flock to name brands.
For every Audemars Piguet selling $2,120,000 worth of retro chronos, there are a gaggle of small watchmakers who are selling, essentially, bupkis.
The Christmas selling season will soon be upon us. If it doesn’t go well for traditional watch sellers, more brands will go belly-up.
Yes, more. Word on the street is that several Swiss watchmakers are already operating under bankruptcy protection. When we know who they are, so will you.
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