The PuristS Interview Francois-Henry Bennahmias
President, Audemars Piguet NA

TP178: Mr. Bennahmias, as President of Audemars Piguet North America, when did you take over responsibility for the N.A. market? 

FHB:  In May 1999 when AP & Cie bought back the distribution from the distributor to incorporate APNA as a fully owned subsidiary. 

TP178: Please describe for us the conditions in the general high end watch market, and specifically in regards to AP, when you arrived. 

FHB: Whereas all the other high-end brands were taking off, AP was almost dead: only $4 million in turnover in the last year, 650 pieces for some 85 doors! A very unhealthy financial situation, discounting and gray market problems. 

TP178: This certainly sounds like an unfortunate state of affairs for the company. How has the market performance of AP in the NA market been since 1999? 

FHB:  2001 was the best year ever for AP worldwide. In the US, we have increased last year our turnover almost fourfold since 1999, sold 2,000 pieces through only 60 doors. Our financial situation is very healthy, and 2002 will be even better! 

TP178: An impressive turnaround!  Now, specifically regarding the area of customer service, many consumers often complain about the slow and often poor service provided by many high horology brands. 

FHB: All the high-end watch brands face today the same major problem, which is the shortage of qualified watchmakers. A whole generation is missing. 

TP178: Specifically to AP USA, the brand has (had) some bad reputation in the past, and even today, there are lingering negative feelings and comments "from the field." Would you please comment on this? 

FHB:  Apart indeed from the residual from previous service organizations, the lack of well-trained watchmakers is specifically exacerbated in the US, where there are virtually no good schools, in regard to the standards of the high-end brands at least, and the brands compete against each other for the few qualified watchmakers.  

But long delays are sometimes not only our fault: as an example, after 9/11 until December, we had 750 repairs at the factory for which the estimates had not been approved. Suddenly in January, everybody wanted to go ahead and repairs were backing up. We can't do miracles. And I will give you another example, although these are confidential figures: I have today a stock of 93 pieces in the After Sales Service for which the estimates have been sent out over 2 months ago! Whose fault are then the long delays? But don't get me wrong: there is no doubt that we have to make many improvements, we are not there yet at all! 

In terms of quality, though, we have made quite some progress over the last four years, if you consider that the return rate for new product is today among the lowest in the industry! 

TP178: Thank you for your candor. The old saying goes, "There are always two sides…" but it is refreshing to hear an executive from a major luxury brand even acknowledge that there are issues to begin with. The first critical step in beginning to address an issue is to acknowledge that a problem exists… 

What changes have been implemented to address these issues, and what are the net effects in terms of improved customer service and satisfaction? 

FHB: We acknowledge that the first concern of the clients is the delay, not the price of the service. And except for the delays due to the fact that there are only so many qualified watchmakers to work on a number of pieces, we believe that we have identified strategies to considerably reduce other causes of delays. One is the miscommunication between the customer, the retailer and the brand, where the first delay typically originates. We believe the best service is a delay that is acceptable to the customer. We need to increase the number of truly qualified watchmakers in our Service Center, and we are working on new logistics to streamline the whole process, including a dedicated website where customers can check at anytime on the status of their repair by entering the job number, similar to a Fedex or UPS tracking service. They will exactly know where in the repair process their timepiece is: if it's in quality control, in Switzerland, etc. Also, repairs for which the estimate has not been approved within a month will systematically be returned. 

TP178: This is fantastic! What an innovative and groundbreaking use of technology in the haute luxe segment of the watch industry. 

FHB:  But most important, we have moved our Service Center from New York City to new facilities in Florida, which will be operative on March 4th.

AP US Service Manager G. Vincent; custom polishing machine specifically designed for the Royal Oak case

TP178: Florida? What an unexpected location for a service center. Why Florida? And what are the goals of the new service center in Florida? Why this approach? 

FHB: Florida is a very appreciated destination and it will be easier to attract good watchmakers. We have created an exceptional facility for them, and we hope to quadruple over five years our number of watchmakers working at the new facility to 50 or 60. The goal will be to ultimately service the South American and Caribbean Markets (for AP repairs only). In the meantime, we will work on the above mentioned new logistics. 

We will not, however, service any vintage and historical pieces there, due to the very small number of specialists able to do this work, and who are all in Switzerland. 

So starting Monday, March 4th, all service requests should be directed to (and will be handled from) the new Florida facility: 

AP Techniques, USA, Inc.
1682 North Belcher Rd.
Clearwater, FL 33765
Tel: 727-467 0940 Fax: 727-467-4248

TP178: Back to a broader management issue, may I ask what your views are on development of regional markets and global marketing and pricing strategies? 

What do you think of the popular management adage – "Think globally, act locally?"

FHB: This has been AP's strategy since we started to buy back the distribution in the important markets. If AP now owns most of the distribution, and marketing strategies are corporate, the individual markets have still a lot of freedom to adapt theses strategies to their local market needs. 

TP178: Any other changes in store? 

FHB: We have been looking for quite a while for a location to open an Audemars Piguet flagship store in the US. We may now have found an exceptional space, which we are currently trying to finalize! 

TP178: Now, to a subject that is particularly timely, in light of recent major socio-political events - AP has a history of charity fundraising promotional programs, from the smashingly successful NY and Singapore Time to Give events, to the AP corporate sponsored Royal Oak Foundation Time for the Trees charity. 

There was also the recent N'Sync charity promotional program – tell me about this…

FHB: In the aftermath of 9/11, many watch brands have spontaneously contributed to relief funds in one way or the other. So did we. We have created a limited edition of 200 ladies and men's watches for NSYNC, engraved with their signatures and with a very original packaging. Half of the funds raised through this program (an estimated $500,000) will be dedicated to a special scholarship fund for children of victims of the WTC attacks. 

Consistent with our focus on children, we have partnered with NSYNC because they are today the most highly and widely respected role models for children and teenagers in this country. They dedicate much of their time and energy to raise funds for their charity "Challenge for the Children". 

TP178: I know that this special joint fund raising effort was very recent.  Are there still any pieces available from this special limited edition?  What models were released for this program?

FHB: Yes, at this time, there are still a few pieces available from this charity fund raising limited edition.  For men, there is the model based on the Royal Oak, and for ladies, a model based on the Promesse.  Those persons wishing to help this very worthy cause, and acquire a momento of this effort, should contact their local authorized Audemars Piguet dealer.

Audemars Piguet North America Inc. has given in 2 ˝ years of existence as a fully owned subsidiary of Audemars Piguet over $2.5 million to American charities, focusing primarily on children; a considerable amount for a small Swiss company whose turnover worldwide in 2001 was $100 million! We have a very close relationship with Arnold Schwarzenegger, and have given close to $2 million through various programs to his charity, the Inner City Games Foundation, which funds after school programs for underprivileged children in now fourteen major US cities. 

At the Time To Give charity auction in New York in October 2000 in celebration of the 125th Anniversary of AP we have raised $1.5 million in one night, which entirely were donated to charity, equally split between the Inner City Games and the Muhammad Ali Center in Louisville. We are also planning for 2003 another program with Muhammad Ali to benefit the new center.

TP178: Thank you, Mr. Bennahmias, for your comments and insights. In closing, can you share with us any sneak peeks at what is coming for 2002 and beyond? Something for the loyal fans and supporters of AP? 

FHB: 2002 is the year of the 30th Anniversary of the Royal Oak, the icon of our brand, so naturally, this is an important year for us. In celebration of the 30th Anniversary, we are corporately sponsoring the Swiss Challenge of the America's Cup and will come out with a special Royal Oak America's Cup Limited Edition, the "City of Sails". 

More important, we will show in Geneva a truly revolutionary new Royal Oak. As for a concept car, this watch is a projection into the future: what could an Audemars Piguet complication look like in ten or twenty years from now? It is really amazing. 

In the US in the fall of 2002, we will also announce the launch of a new ladies line, with an amazing promotion involving another world-renowned luxury brand (not another watch brand). 

TP178: Exciting news for AP collectors and fans! Again, thank you for your time, and all of our best wishes for continuing success in the NA markets!

TM