Audemars Piguet failed to get into the upscale watch industry’s highly exclusive billion Swiss franc sales club in 2017 by just a whisker. But it was so close that its executives are confident this year will be a shoo-in.
In any case, as one of the last sizeable independent labels in the Swiss watch business, it put up a fine performance in 2017 to get to where it did. The brand famous for its Royal Oak Offshore collection chalked up sales growth of 12 per cent when the industry’s average was no more than 3 per cent.
Only Richard Mille is thought to have done better with an estimated sales increase of 20 per cent. But then, Richard Mille’s production of under 4,000 watches a year is only about a tenth of Audemars Piguet’s output.
“Audemars Piguet is doing extremely well,” says Olivier Audemars, the great grandson of Edward Auguste Piguet, one of Audemars Piguet’s founders. And the secret of its success, according to him, is Le Brassus, the place where Audemars Piguet started – and remains.
Le Brassus lies in the Vallee de Joux, in the Jura Mountain. It’s an isolated place and the hostile environment has kept people out. But it offered early independent-minded settlers the freedom they craved.
The Vallee also provided just the right mix of factors to produce the condition for watchmaking to take root and grow: iron ore, running water, timber and – most significantly, Mr Audemars stressed – time.
The long winters and seclusion of the Vallee offer the time, patience and concentration to develop and work on the miniature mechanical wonder that is the watch. It’s no wonder that the place is today known as the cradle of complicated timepieces.
Mr Audemars, who is also vice-chairman of the board of directors at Audemars Piguet, says watchmaking know-how in Le Brassus has been passed down from generation to generation – and people there valued the heritage so much that they fought fiercely against industrialisation to preserve the traditional way of watchmaking, which relies heavily on human skills.
This is why Audemars Piguet, founded in 1875, is the oldest Swiss watchmaker still in the hands of its founding families and still in its place of origin.
“Le Brassus is intrinsic to our brand,” Mr Audemars says. “Our deep roots here keep us grounded, focusing on what we do best.”
But it hasn’t always been smooth sailing for the watchmaker. Mr Audemars recalls tales of his grandfather who couldn’t even afford the train fare to visit two of his daughters when they were confined to a sanitarium because of tuberculosis, after Audemars Piguet lost some big customers in the US in 1928, the eve of the Great Depression.
“It nearly killed Audemars Piguet,” he says. “In the following year, we were left with only three watch-makers making only one watch.”
Of course, there’s also the “quartz” crisis in the 1970s when the onslaught of cheap Japanese electronic timepieces in the market almost wiped out the Swiss mechanical watch industry. Instead of following the crowd and switching to quartz, Audemars Piguet continued to have faith in its own skills. It focused on its core competence – the ingenuity of its watchmakers – and worked at getting better. This didn’t preclude taking bold steps to innovate and make radical changes.
Two risky moves Audemars Piguet made during the “quartz” crisis proved to be prescient. The first was the investment in developing the game-changing Royal Oak – a radically designed model which effectively overturned watchmaking codes. Mr Audemars says the Royal Oak, which has spawned Audemars Piguet’s best-selling watch collection, introduced a luxury sports model that could be worn every day, anywhere – a model for a new, more active lifestyle emerging in the 1970s when extreme sports started to catch on with everyone.
Earlier timepieces made of soft gold material did not offer sufficient protection of the delicate movement when they were worn for long periods and in rough terrain, he says. The Royal Oak, on the other hand, is made of hard steel which provides better protection for the mechanism.
The second consequential move Audemars Piguet made was to create the world’s thinnest automatic perpetual calendar timepiece. This has since led to the rebirth of complications models at Audemars Piguet – and helped to sustain its innovatons.
Mr Audemars says such steps taken were possible because Audemars could take the long view. “One advantage of a family company (and being independent) is we don’t think in terms of quarterly reports. We think in terms of generations.”
This story first appeared in The Business Times.