Audemars Piguet

During these turbulent times, great companies see the opportunities rather than focusing on the crisis.

Mr. Merk, CEO of Audemars Piguet, shares with PuristSPro AP fans his special insights.

 

You came in to AP to assume the CEO position from outside the company, back in late 2008/early
 2009. What were your impressions of AP before entering it?

I had always considered AP a leading world recognized brand, firmly anchored in the minds and
hearts of its fans with iconic and authentic products such as the Royal Oak, but also with a long
standing tradition of watch making know-how encapsulated in collections such as Jules Audemars or
Edward Piguet.

To me, AP has always shown a strong commitment to Excellence, always pushing the limits further
while capitalizing on its roots of horological tradition since 1875.

How were the realities of the company different once you were inside?

My perception was confirmed in all aspects and even reinforced I should say! AP is definitely on
top of the pyramid in the very exclusive haute horlogerie circle.

Audemars Piguet has been an independent family business since 1875 with strong values of Tradition,
Excellence and Audacity. This ensures long-term stability and acts as a fertile ground for the
development of the company.

We have consummate R&D competencies in our two Production sites, one in Le Brassus (APLB) and one
in Le Locle (Audemars Piguet Renaud Papi), both financially rock solid, here again independent in
all aspects (mind and business relationships) and focusing on the development of new complications.

All together a very sound and long-term oriented business model!

Of course, it does not mean there is no competition. APs strength is to have always turned competition
into a positive challenge: to be at the edge of innovation, technology, and utmost quality in all
timepieces we create. For instance the AP escapement, Millenary Carbon One or Alacrit, just to mention
a few

Success is a long-term process.

Any change of regime, no matter how peaceful or well planned, is always fraught with unforeseen
difficulties.

That is, of course, true. The team around Georges-Henri Meylan, together with the Board of AP, has
done an excellent job in moving the company to the next level. With G-HM now being on the board, a new
management team is following the path opened by its predecessors, sharing the same values and ambitions.
In this perspective, any change of regime can only be seen as positive!

Changes are always fraught because of the climate of uncertainty they might generate. But time will
show that with a coherent strategy and clear vision of the direction we are heading to, doubt has no
reason to be.

A new team of committed professionals is today in place and all systems are running smoothly!

AP has passed the last 12 months - which were difficult for the entire industry - very well. Today,
our performance exceeds our expectations and we expect double digit growth for the first semester.

Over the course of the past year, what have you found to be your greatest challenge(s)?

Our first challenge was to adjust the company to the new demand situation of the market in the year
of crisis 2009. I think the adjustment was well done:  we have extremely healthy stock levels today
and the company stands on very solid grounds.

The second challenge was to handle smoothly the necessary adaptation  to ensure the long term stability
of the new management team and the way it could be perceived both internally and externally.

What achievements are you most proud of?

Well, I must say that I am proud of how we managed the economic crisis of last year. Audemars Piguet
has always highly valued the internal know-how and human resources, and we are proud to be one of the
few watchmaking companies that had no lay-offs in these difficult economic times, while continuously
investing in innovation.

Furthermore we did maintain our leading position in the top luxury segment. We are very satisfied with
current financial results with growth in most key-markets and the positive perspectives we foresee. I
can tell you, AP is a very healthy company!

Indeed, you came in during a very interesting time  a time of great macro-economic distress.

Please share with us more details about how AP weathered this storm, now that the sun seems to be shining
through the clouds again?

Our key concern at Audemars Piguet has always been to make the most stunning and technically fascinating
timepieces of the highest quality. An economic downturn does not change this constant preoccupation we
have had since 1875. This resulted in the presentation of strong and coherent products at the SIHH 2010.
The feedback from the market was really excellent, both from retailers and customers. I am already looking
forward to the rich pipeline of new projects for the years to come such as a new distinctive 3D movement,
new developments on the Offshore and the 40th anniversary of the Royal Oak! Without revealing too much, I
can tell you that Audemars Piguet will pursue its Tradition of Excellence with a clear vision, always
pushing the limits of watchmaking

What do you see as the essential qualities of AP  what are the core values that you will defend
with your professional life?

AP is unique as it was able to build an extremely strong niche in the top luxury segment with the iconic
Royal Oak and Royal Oak Offshore collections. This took place while maintaining strong and traditional
horological values and the craft that excites so many collectors and aficionados.

AP has found the subtle balance and bridge between innovative technology and horological tradition.

It is also the oldest manufacture still in the hands of the founding families and this is a strong sign
of consistency and independence. In essence, AP has been in constant evolution for 135 years with an
increasing acceleration. The driving forces behind all this are the competence and the commitment of
our employees as well as the clear vision of our future. I am also convinced that another essential
quality of AP has always been to be very close to our business partners and customers.

You know, it takes more than just pure marketing circus to be a key player in this industry! Furthermore
a key-player to last It is all about being authentic, which is definitely the case for our company.
Audemars Piguet has a long history and legitimacy and we are looking at the future with strong confidence !

Looking forward, what does the future hold?

Apart from future product developments I talked about earlier, we are establishing new partnerships
with world famous personalities, and we are currently working on a brand new worldwide advertising campaign.
You will be thrilled by what we will disclose in the months to come!

It has been asked whether or not AP has a stolen watches register.  I believe you do, but it is
very little publicized. Can you shed some light on this?

Yes, this is correct. And we think it is an essential service to offer to our customers.

Our Customer Service department registers the stolen watches in a special system. If it comes back to
the manufacture for a service, our system generates immediately a pop-up warning. Then the legal operatives
enter the loop to solve the issue

Our timepieces gain significant value over time, they are much sought after even by ill-intentioned persons.
There should be no doubt in our buyers minds that if their AP gets stolen, it has very good chances to be intercepted.

There are feelings among a growing number of long time aficionados and newbie alike that

a. There are too many limited editions

b. AP is losing touch with its classical high horology roots to chase after the easy money of ever
more Offshore and Royal Oak variants

c. Speculators and flippers are given free rein, and that somehow, overheated secondary markets and
speculative secondary market prices are dangerous for the long term health of the brand.

How do you feel about each of these concerns?

a.
In fact I dont think there are too many limited editions. The Limited Editions concern mainly the Offshore
line which is one of our best-selling collections, with many fans and collectors worldwide. At Audemars
Piguet we consider Limited Editions as opportunities of celebrating a special event, momentum or product
innovation. This is a great space of creativity and the vivid expression of a brand renewing itself continuously.

b.
There are four main axes of Product Development at Audemars Piguet: the Extreme Sports line with Offshore,
the Prestige Sport line with Royal Oak, the Classical Contemporary line with Jules Audemars, Edward Piguet
and the Millenary, and finally, the Millenary Ladies line for women. Each of these four axes embodies APs
values of Tradition, Excellence and Daring. They all correspond to a strong demand on the market.

In this perspective, we are not favouring any line but rather building our product offer with these four complimentary pillars.

Each one of these axes is a different facet to express our haute-horlogerie roots, with a twist of audacity.

As an example of our classical haute-horlogerie offering, we will be launching next semester the new Jules Audemars
extra-plat and extra-plat with perpetual calendar. We already have a clear agenda of development for the future.

c.
Being a brand with iconic products implies the existence of a secondary market. I see the vitality of
Audemars Piguet on the secondary market as the reflection of the brands desirability. All the timeless
values encapsulated in an AP make it a value keeping object and the secondary market knows it very well.
There would be no secondary market if there would not be a strong primary market. Only legitimate products
of ultimate quality can generate this.

I guess it's the reward of success!

What are you doing, specifically, to address the always present issues of

1. Quality control, both for new production and after-sales (SAV) repairs

2. SAV turn around

Audemars Piguet never compromises with quality. At each step of the production, the watchmakers do an
auto-control on their work which means that they are responsible for their quality. We are re-enforcing
the control time observation. On every watch from entry product such as the 15300 Royal Oak up to and
including the Grande Complication, all tests are applied in a strict and coherent manner with the same
level of accuracy and attention.

The similar procedure is applied on the SAV repairs (at the HQ level, at the regional level and also in
local after-sales services). We are consistent in all procedures. This was improved over time. The quality
control novelty is the introduction of new technologies to even better understand the behavior of our
movements over a longer period. Shock and stress test, wearing simulation are among some of the many tests
we make on our watches.

Any special insights into product development? Any sneak peaks?

Well you know, summer time is coming.

Sun, fun, outside activities AP will be presenting exciting new models under the heading black and white
that will be targeting the needs of the young and young in mind customers.

You want a sneak peak?

Well, June will set the stage for the launch of the first ever AP Diving Watch. The Diver will have a 300m.
water resistance and specific technical features and above all, an irresistible design! You'll know all about
it very soon!

(editor's note: The Diver was introduced to the trade at SIHH 2010, and was covered here and elsewhere on the net, and by this time, I believe in print as well.

The "official" public launch is scheduled for June, with a pretty bangup campaign that will be "mind blowing" - just as the Grand Prix launch was, and the Survivor before that.)

Last question - what is your favorite watch model, regardless of brand? Favorite AP?

The timeless and super elegant Royal Oak model 15202 with the caliber 2120 remains an unsurpassed reference
point in the art of watchmaking for me. It contains everything I am looking for in a watch.

I wear it sometimes when I travel. It happens very often that I am approached by AP aficionados who want to
see the origins Royal Oak. Sometimes they own themselves an AP, sometimes they are just watch lovers. Despite
the fact that we were strangers a few minutes ago, sharing our passion about Audemars Piguet brings us together.
It is a little bit like belonging to a very exclusive, yet very friendly club Just like ThePurists.com!

I dont think any other brand can generate so much enthusiasm. This is why I am so proud of heading this
Manufacture towards the future!

Thank you for your time, I know you have a very busy travel schedule!

(moderator's note:
AP NA will be holding a fund raising auction on Monday, May 17, 2010 in Manhattan.
Please contact the AP NY Boutique at (212) 688-6644 for more information)

 

This message has been edited by AnthonyTsai on 2010-05-12 15:56:34 This message has been edited by ThomasM on 2010-05-13 10:14:31 This message has been edited by AnthonyTsai on 2010-05-17 13:40:53

He hinted at the 40th anniversary of the RO -- can't wait to see what is in store.  I am also looking forward to seeing the "first ever" AP diving watch, although I thought the Scuba with a WR of 300m was a diving watch...Nevertheless, I am sure it will be an exciting new model. 

Thanks for posting this informative interview.

respo 

get it? hold your breath...for a dive watch?!?

More details soon, my friend, soon...

TM

...I can't wait too long.  All right, maybe a little longer. 

respo

Judging from all the interest in the new "Dive" watch, I think there has been a terrible misunderstanding.

My "hold your breath" was a play on words on the Dive theme.

Yes, that Dive model is the one introduced at SIHH in January.

Please remember that SIHH is TECHNICALLY a trade only show, even though practically, it is effectively a product launch event in these days of instant global internet communications.

So, TECHNICALLY, the June launch of the Diver, would be an "official" product launch and premier.

Don't you love it when a major paradigm shifts?

Sorry about the confusion, I should have caught that and clarified.

Cheers,

TM

 

In fact it comes as a relief that there is not ANOTHER watch for me to lust after...although, I had beeter go back and take another look at the Diver announced at SIHH...uh oh.

Thanks, Thomas.

respo

Just to reconfirm with a visual.  The Offshore Diver is basically the same as the Scuba but with different hands & date disc background is black instead of white.

Cheers,
Anthony

I actually like the details of the Diver very much! Subtle but key differences...

TM

never new of the database of stolen watches....

Very interesting and informative. I have loved AP's for many, many years. I distinctly remember seeing my first stainless Royal Oak
at a jeweler in Paramus, NJ and being mesmerized by the simplicity and beauty of the design.

I really enjoy reading about the future designs and am curious about the "divers watch" that Mr. Merk spoke about, is this an
additional model to the "Scuba"?

Thank you again for the very enjoyable read.

Jeff

What's your favorite model? Which sees the most wrist time?

TM

I have always held the Royal Oak line in the highest regards and own a Royal Oak chronograph in stainless.
To me,, these models are the Heart and Soul of AP, all others are spin offs of these iconic watches.

I also own a Edward Piguet chronograph in rose gold as a "dress" watch, I end up wearing with jeans.

The RO chrono gets the most wrist time, it's looks never fade, watching the light reflect of the links of the bracelet
fascinates me, always has always will!

I have another RO chrono on order, this one rose gold on a strap, can not wait!

Jeff

PS. the prospect of this dive watch is causing me to have second thoughts about the gold chrono!

shooter!

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POV, I'm not sure I buy his views on LEs and non-favoring of any one line... to me, there is a lot of emphasis on the ROO and LE ploys and I will add that from a sales POV, I guess one cannot blame them.

Hi,

I know many/most of the knee jerk reactions towards Limited Edition ROOS, and some of them I have tried (mostly futilely) to explain that the LE's are to celebrate specific anniversaries, special events, etc (as Mr. Merk said) and that AP has tended to be more "accomodating" than most other brands (remember the Dominos Pizza Rolex Datejust? The Comex Sub? The Tiffany's Patek?) but what's the problem with that? If the consumer doesn't like the LE (Pride of China, Pride of Russia; the Montauk Highway; the Rodeo Drive) just don't buy it.  I really am left scratching my head what the problem is...

But in reading your posts here over the past year or so, I've always found your comments and posts to be well thought out and reasonable, so I am especially interested to read what, exactly, you see as the issue with so many and varied "special limited editions?"

Yes, there is emphasis on the ROO as there would be for any company for which any one model line makes up 50% or more of its turnover.

Lot's of emphasis? Sure, why not? But OVER-emphasis? Again, I'd love to read your further thoughts on this.

I recall many times reading gasps of joy, "Boy, I am so glad to see more comments and posts on the Millenary" or "Jules Audemars" model lines.

And then I read nothing more...um, so where's the disconnect?

Cheers,

TM

some of my thoughts on your interview with the AP gentleman and not wanting to delve into it further as it is just my view which is probably only right for me .  I also take the stand that others have theirs and I respect that.  I personally don;t subscribe to the LE and ROO marketing ploys (and again, nothing wrong with that from a business POV as I would do the same if I had P&L responsibility for AP.  If it sells, hey, I'll make it) and I back that up with a lack of purchase of the LE ROOs which doesn;t look to change anytime soon (and I say soon as I have my gripes about PAMs as well and look what happened.. I just acquired a 326 on Monday).  But that again is just me and others don;t thnk the same way and I respect that.

I've read threads here on these subjects and it always ends as it should which is "to each his own" which is correct.  One of my closest watch buddies is a ROO addict and he knows my views on that but we both respect each others stand and not let it affect anything.  So.. same same (as they say in Thailand here... I have my not so positive views on APs ROO and LE tactics and its just my views which no one else may share.

Hi, Arthur,

" I'm not sure I buy his views on LEs and non-favoring of any one line... "

read to me like you were questioning the sincerity of Mr. Merk's words and their meaning, not that your opinion of the situation differed from his, as a matter of opinion.

My apologies for misunderstanding.

Of course, I'm still interested in reading some "clarification" of the underlying assumptions of your opinion, as isn't what this site is for? So we can all share in our knowledge, experiences, and help shape our own opinions through understanding the opinions of others?

Cheers,

TM

 

On the clarification, I rather not as some of my reasons for not being a ROO ro PAM fan have no horological grounding and are based on weird idiosyncracies which cannot be the norm.  The horological reasons.. well... I'm still struggling with horological terms and as of now, still can;t (and really can;t be bothered actually   )name the major parts of a movement and I fear if I were to state my horological reasons for not being a ROO or PAM fan, I will inevitably struggle to state accurately what I think and hence unnecessarily put across the wrong point.  And at the end of the day, it is just the view of this horological noob which has oodles to learn

I'm with Arthur on this. If ROO makes up more than 50% of the company's $ and if the LE's are raking in all that money, why bother to stop there? In as far as AP is concerned, I am an outsider but the impression I get is that AP is milking ROO for what its worth.

With so many variants of the ROO on the market, they must surely be the high end Swatch - same watch in different clothings...

I really like the AP Royal Oak and I am sure at some point in time, I will acquire one. but the ROO and the LEs are not my cuppa.

um...what's the difference between the Survivor and Grand Prix and JPM and RBII...

okay, these are seriously different models, even if with similar/same movements.

Certainly far more different than various PP models with the same movement, or LUC, or VC, or Lange One with luminous; without luminous; with black dial; with MOP dial; with white dial; blah blah blah blah blah.

Let's say Montauk Highway, Montenapoleone, Rodeo Drive...

What's the difference between these "LE" and the 5970 vs 3970? or yg/wg/rg versions of the Lange One? white dials / black dials? Are these not "same watch in different clothings?"

I can understand the hue and cry if AP charged premiums for "same watch, different clothing" LE (they don't) but I'm really left scratching my head wondering, "what's the problem?"

I'm really kinda tired of asking the same question and not getting a direct and on the point answer, and maybe readers are tired of me asking what is really a very simple question -

What is wrong with LE to celebrate specific events, if there is no premium charged over like non-LE editions, and targeted at specific markets and buyers who would like them? 

Cater to what the customer wants (more customization) get skewered for pandering.

Ignore requests and be slammed for being unresponsive to customer wishes.

(sigh)

What am I missing? Can SOMEONE help me understand this, please?

Cheers,

TM

I have followed AP over the years and own just one.  Mine is the iconic RO E-series with silvered waffle dial in ss with bracelet and "AP butterfly" deployant.  As a matter of fact, it is my daily wear watch, despite my original concerns of scratches and damage that these watches are susceptible to with the many angles and contrasts of polished and brushed finish!  I have found it to be of very high quality and verstility from jeans to suit attire. 

Kudos to you for asking some very valid questions based on current trends and topics during the interview.  To answer your question, I think some have challenges with the LE versions of the ROO for these reasons:

1.  Seem to be somewhat frequent with minimal, insignificant (read: not innovative) changes (ie:  colors on dial, hands, etc.)

2.  Why does a brand like AP need to do this anyway?  (ie:  Shaq version, JayZ, etc.....)  realizing some are for charitable and noteworthy causes, the endorsement/LE approach taken at times seems a bit out of place for a brand of AP's history and market niche - somewhat into the trenches of  a more mass audience, mid-level brand marketing  approach.

Points above said, we all need to realize that AP is not just a static entity  and  is in the business of making a profit to survive.  As such, they obviously need to be in their target market segment space with new offerings and interesting pieces to keep business moving forward.  The caveat here is that I do not profess to know or even follow all of the various permutations of ROO special or LE's out there.  It seems from my limited knowledge, that much of this accelerated after the Montoya edition, which was truly innovative in the use of materials and design in the way it also followed the ROO key themes.  These are just my thoughts and not meant to stir the pot, as I am one who does not particularly favor the look or size of the ROO on myself.  I am perfectly fine with my plain and versatile RO!

Regards,

Paul

It's simple, really.

People sell their grandmothers to get hold of a new LE Offshore in the hope of making a quick buck by flipping it.

Then new LEs come out, sometimes with only small variations on the watch to which they have pinned their investment hopes.

They get pissed off and blame the company. "How dare they issue so many LEs? They should have ceased that practice immediately after I bought mine."

I just know that you are reading this post with a sense of wonder, having finally had the mystery cleared up so neatly.

Cheers
Tony P

ThePuristS (and PuristSPro) has always been very much against that sort of mentality - "please keep the door open long enough for me to get in, then slam it shut to anyone else behind me."

:-(

Cheers,

TM

Thanks Mr Merk and Dr Mao for the insights and sneak peeks.  Although I knew such an interview was coming, I didn't realise the amount of information in it, if one teases out the material!

The original 'rotating bezel indicator' watch was a Limited Edition (ironic) for Wempe Jewellers celebrating an anniversary.  There was so much interest (darn my hesitant trigger finger) that AP brought out the 'Scuba', which is for splashing and posing at the club pool before driving off in your Lamborghini with the bikini-clad passenger (Yes; bikini-boy from American Idol 9 strikes again!).

I guess this new 1st real dive watch from AP is...well.....umm.....a real dive watch! 

 

For AP, I thik it is the converse of "If you build it; they will come!" for the limited edition Royal Oak Offshores.

I think it is more like, "Give the customers what they want."  There is a demand for thse Offshores, which is unfathomable (fathom...geddit? Dive watch?  Never mind!) to me.

I think ROO fans are comparable to Panerai-fans............. only with taste!    There, another famous MTF sideways-compliment.........tee hee.

 

Regards,

MTF

[spelling errors edited]

This message has been edited by MTF on 2010-05-13 07:35:54

you sideway compliments really hit hard! 

Thanks for the interview Thomas!

(I have a big grin on my face when looking at my wrist these days )

Cheers,
Anthony

 

 

This message has been edited by AnthonyTsai on 2010-05-12 20:52:28

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the reason for that big grin on your face is pretty...

BADA$$!

Diver - sorry, see my comments to Respo above.

TM