Audemars Piguet does not escape this rule

Called in the 1970s at the bedside of a dying Swiss watch industry, Nicolas Hayek first engaged in an informative experience. He took three strictly identical cheap watches. On the first he put "made in Switzerland", the second "made in Japan" and the third "made in Hong Kong." Then these watches were placed in stores around the world with a different price: 107 dollars for Switzerland, 100 for the Japanese and 93 dollars for Chinese. Result, more than 60 of customers chose for the first choice. The Swiss label therefore still had value! A result which convinced the creator of the Swatch to the fantastic rescue operation of an entire industry that employed at the time nearly 15,000 persons (1).

Luxury starts like this, with an image. The manufacturing excellence. Is it that allows the Swiss watch industry of today being the first exporter in the world of watches while its production costs are more than three hundred times superior to those of the Chinese!

But that is what makes the luxury The opposite of the vulgar met Coco Chanel. More prosaic, McKinsey experts define the by three criteria: manufacturing excellence, originality in the creation and the care taken in its distribution. All course at the highest price possible. A sufficiently broad definition for a heterogeneous Galaxy which floor of small luxury price of certain Swatch to the prohibitive: the Breguet, Audemars Piguet and other Jaeger-Lecoultre including the most prestigious models happily exceed 200,000 euros. The price of a Ferrari, just to have the time! With in the most comfortable niche medium, to the luxury of mass which the King is undoubtedly Rolex watches sold a few thousand euros.

Because in this profession the martingale is to combine the benefits of industrialization with the premium price that gives a prestigious brand.

The goldsmith in the matter, so to speak, is obviously French LVMH, with Vuitton brand which also launched in turn in watchmaking. It is in the luxury of mass, well away from the craft of haute couture meet frequently with operating margins blithely exceeding 50. Few reach the nirvana, but all are looking for.

Audemars Piguet does not escape this rule. Even if with its 27,000 watches per year it is light of the very discrete Rolex, which are estimated to years (no figure is disclosed by the owner Foundation) that he sells between 700,000 and 1 million pieces annually.

Founded in 1875 in the heart of the Jura Joux Valley, to the French border, the small company took off really from the 1980s. His rise is built around four strong ideas that make up the strategy of most of the undertakings present on the very large luxury niche: the integration of production, the search for volume models, control of distribution and marketing investment.

"The dream is the luxury of thinking" wrote Jules Renard. In the dream that promises Audemars Piguet, like its counterparts Patek Philippe and Vacheron Constantin, there is the promise of perfection. One of outstanding craftsmen who shape the object as a jeweller. This is obviously the case that for very rare model prices out. For the rest, the organization is more prosaically industrial, but totally integrated. Components, movements, boxes, everything is produced in-house. Only the screws and ice are sometimes tolerated in external production.

Volume products research is, it, the need to industrialize sufficiently important series. The key to the generation of comfortable margins. For Audemars Piguet, there is a range of sports watches created in 1972 and entitled Royal Oak. Declined in multiple ways, it retains the same basis and can therefore be assembled industrially. Considered an "entry level" model (even close), it now represents half of the turnover in terms of margin and more. In the same way, Rolex is the bulk of its sales on the declination of the model features Oyster.

Third element, the control of the distribution network. All the brands of luxury try to develop their own stores. First to introduce and promote the most of their production, that cannot be an independent watchmaker, not for reasons of cost (he is owner of the stock). But also because we must care for his client. Also elitist products, the number of required stores is low. A shop is creation in France for annual sales of 250 pieces, less than one per day.

Finally, the last element is the marketing investment, about 15 of the turnover for Audemars Piguet. It unfolds in two directions: the organisations of events and the development of product of exception, showcase of know-how of the mark. Works of art sometimes produced within five copies whose prices exceed 200,000 to 300,000 euros and become objects of collections, such as jewellery. Scarcity, largely organised and commented, participates in the reputation of the mark. He had three years of waiting for the chance to drag his wrist an Audemars Piguet Millenary MC12 to 230,000 euros.

Side event was Breguet who rented the château of Versailles to celebrate the two hundredth anniversary of the invention of the Vortex (the most noble of the movements) by Abraham Louis Breguet. Or while still Rolex who sponsors the great expeditions of the end of the world and Audemars Piguet who enrolls in the America's Cup...

The made in Switzerland, luxury and Nicolas Hayek rescued the Swiss watch industry. Will they ensure its future The success came from their capacity to marry of mass production and brands of luxury. Same Audemars Piguet surfing this wave and plans to double its production for five years. But if they have been able to repel Japanese attacks, he will be with the rise of the tenors of the luxury, like Vuitton, Chanel, Gucci and Bulgari who browsed upon Swiss square meadow, even though they often subcontract their production. But the watch, only true male gem attracts also all specialists of "affordable luxury" that could push to top master Swiss Watchmakers.