The luxury goods business is on the cusp of profound change. From competitive leapfrogging for the most expensive locations and most exclusive architects and designers, top brands will have to return to the core values of customer centricity.
That is the central lesson of the COVID crisis for François-Henry Bennahmias, chief executive of Audemars Piguet (AP), the Swiss watch brand founded in 1875 and still controlled by its founding families.
When the pandemic struck and AP had to halt production for two months, Bennahmias, a 51-year-old Frenchman who has been with AP for 27 years, started weekly video briefings for its 2,000 employees. In week three, he asked staff to quiz their children on what they thought would be the lasting impact of the pandemic.
The universal answer was the importance of love and value of genuine affection. “It provided a new perspective for how we run AP”, he recalls. The replies prompted Bennahmias to launch his ‘People to People’ strategy – a recognition that AP, and the luxury goods sector in general, had somewhat lost touch with customers in each firm’s frenzy to outshine the competition.
Over the past 20 years in luxury goods, “business grew constantly to unexpected levels”, he says. But companies started outbidding each other in a contest of “who could have the biggest, the top of the top, the most beautiful store.” Along the way, costs surged and companies lost sight of their customers.
The lesson for Bennahmias was: “we have to be much better with our clients. We don’t need the four walls.”
His strategy is based on the belief that emotion, along with exclusivity and craftsmanship, are the three driving factors behind luxury watch purchases. People to People, launched in April 2020, meant giving watchmaking more of an identity. “The perspective, the attitude, everything has got a face, and that has changed the mindset”, explains Bennahmias.
The project started internally, with the goal of reminding AP staff how to deal with each other, before extending to customer contacts and emphasising the core role of the client. That message had become somewhat overshadowed in a sector where surging sales and demand sometimes exceeding supply had resulted in customers not always being given pride of place.
Emphasising people is very much in line with Bennahmias’s own character. In an industry of big personalities, he counts as one of the mavericks. Since taking over as chief executive almost a decade ago, AP has shed its somewhat buttoned down image. Its products still sell predominantly to men, with women and younger buyers remaining minorities.
But revenues have risen steadily to CHF 1.2m ($1.3m) last year, despite output rising more modestly to around 42,000 timepieces a year as the range has moved progressively even more upmarket and the company opened more of its own stores, capturing a bigger slice of revenues.
Bennahmias was a professional golfer in France before he turned to watches, and he signs himself ’head coach’ on internal emails, sees himself very much as a people person. His leadership style is “very demanding, but very people driven. It’s about how to put a team together”, he says.
A bundle of energy, he says he prefers speed and decisiveness to shades of grey in decision making. “When anyone leaves a meeting with me, they know what I think.” Short lines of communication and eliminating unnecessary bureaucracy are part of that style. “We need to keep the culture the way it is and the way it was.”
But Bennahmias says he does listen, and certainly believes in learning from one’s mistakes –a lesson from his sporting career. “Leadership is also about listening. Come up with the right arguments, and I’m certainly willing to listen.”
That certainly applies to the small group of employees aged between 25 and 33 who he has selected as potential future leaders. “They follow me in almost everything I do . But they must also provide ideas.”
A key message he gives in return is to remain ever curious “about everything. It’s a matter of constant evolution, being always open to new things.” As one of these new things, AP last March held a charity watch auction in Hollywood, raising more than $8m in 15 minutes. Star turn was a one-off Black Panther version of AP’s best-selling Royal Oak Concept range, based on the famous Marvel Comics character. The watch fetched $5.2m.
And which Marvel character would be Bennhamias’s personal choice? “The Hulk. We help each other. But if you do something bad to me…then I could become green with anger.”
