In this second part of a three-part series on the watch industry’s greatest leaders, we look at three individuals who have transformed the landscape of Swiss watchmaking and discuss the reason for their success but also outline the greatest challenges they face.
*All information provided by Vontobel Luxury Groups Shop based on FY2017 information.
*Watch sales share refers to the percentage of business coming from watch categories.
Richard Mille, Founder Richard Mille
When God made Richard Mille, he broke the mould. Because what Mille has achieved since founding his eponymous brand along with partner Dominique Guenat in 2001, was not so much to create the single most successful new watch brand in over a century (he did this, of course), but something much bigger…
Richard Mille, Founder Richard Mille
• Change (2017, compared with 2016): +16%
• Watch sales share: 100%
• Worldwide market share: 0.7%
He created an all-new strata, a hyper-luxury watch business that never existed before and in which he is the sole member. Of course, there are Patek complications and Audemars Piguet concept watches that enter into the Mille price category, but no brand on earth can come close to touching Mille’s over-200,000 Swiss franc aggregate price. What Mille did was to create a price category where rationality no longer plays a role, and where there are seemingly no limits. He says of his two-million-dollar sapphire RM056 watches, which trade in vast sums in excess of this on the aftermarket, “It is true – I am the only one in this price bracket, and even I am not sure where the limit is. Perhaps there is ultimately no limit.”
One day Harvard Business School and every great university on the planet will teach the rise of Richard Mille as a mandatory course. The only problem is, his achievements are impossible to replicate. Why? Because of three major factors.
Firstly, Mille is a design genius. You can say what you want about the pricing related to Mille’s watches – more on this later – but there is no hot-blooded man on the planet that you can put a Richard Mille in front of who won’t feel a sudden, all-consuming stirring in his loins. That is how viscerally thrilling, technically erotic and damnably pulse-quickening his watches are. Why? Well that’s just it. They are impossible to analyze and impossible to duplicate. Part of it is because Mille was the first to create a design language based on the mechanical architecture of the complicated watch; part of it is his desire to invoke modern race car and aviation aesthetics; part of it is that – at least in the first decade – every single element of his watches had a functional underpinning, which was to decrease weight, increase shock resistance and optimize comfort. But the thing is, Mille’s watches are far greater than the sum of their parts and are a manifestation of a world seen only by Mille and hidden to others. They are the summation of his technical genetic resequencing of the luxury complicated watch and a reflection of a genius that he and only he is solely in possession of.
Secondly, Richard Mille is a marketing genius. It was Mille who first decided to put the world’s most complicated watches – timepieces normally associated with fragility and that you were scared to even breathe on – and strapped them to the wrists of the world’s most elite athletes to wear during the most intense and heated competition. Mille says, “I wanted to redefine what was possible with a complicated watch and demonstrate that if the movement and case were optimized for lightness and shock resistance, there was no situation where the watch could not be worn.” Mille’s greatest coup occurred when King Juan Carlos of Spain, already a huge Mille fan, introduced him to Rafael Nadal and a marriage made in heaven ensued. Nadal wore his Mille RM027 – the lightest mechanical watch in existence – to innumerable Grand Slam victories, to exclamations of awe from commentators like John McEnroe who couldn’t believe he was playing with a “half-million-dollar watch” on his wrist. Good luck to anyone trying to find a Richard Mille RM027 at the original sticker price, as the watch now trades for double this amount. Underlying this marketing approach was a true pioneering status in innovation, all in the pursuit of performance. The world’s first carbon-fiber baseplates, titanium movements, cases made of satellite materials like Alusic, Mille’s groundbreaking feats came with a cost. Mille says with a chuckle, “If I were my own financial controller, I would have fired myself.” But these achievements also justified the stratospheric prices of his watches.
Thirdly, Mille successfully transformed his watches into the membership badges of the world’s ultra elite. Mille watches are not flashy. Most of them are in carbon fiber, quartz TPT or titanium, and to naive eyes, nothing special – which is what makes them the perfect community symbol and rallying point for the world’s wealthiest individuals: men and women so rich, they transcended beyond the traditional clichés of wealth. And in a world where your Lamborghini, super yacht or beach house can be rented, wearing a Mille watch on your wrist smacks of genuine equity.
Fourthly, and perhaps the most important thing that should be taught to the next generation of watch leaders, Richard Mille is irrefutably the greatest originator in modern watchmaking history, but he is also one of the planet’s kindest, warmest and most genuine human beings. It is incredible that in an industry rife with gossip, I have never once heard another person say a single negative thing about Mille. Quite the opposite: he is universally and deservedly showered with praise and affection.
What is the next great challenge for Richard Mille? It is likely succession, because the question is, of course, what will happen to Richard Mille if one day the man steps down as its hyper-charismatic Svengali.
Raynald Aeschlimann, CEO Omega
For a leader as dynamic, driven, innovative and brilliant as Raynald Aeschlimann, it is sometimes hard to fathom how he can also be so genuinely nice as a human being. While other CEOs try to erect walls between themselves and others, Aeschlimann is the single greatest galvaniser for Omega passion.
Raynald Aeschlimann, Omega
• Change (2017, compared with 2016): +7%
• Watch sales share: NA
• Worldwide market share: NA
Ask anyone, and I mean anyone, and you will not find a single person on the planet that doesn’t think Aeschlimann is: a) a brilliant leader; and b) simply one of the nicest and coolest persons on the planet. Perhaps it is his previous career as a military officer, but Aeschlimann knows both how to lead, and how to rally people to his cause. And the thing is, he is absolutely receptive to everyone. He is open to listening to everyone, including collaborating with journalists such as Robert-Jan Broer, the founder of Fratello Watches, on some of the brand’s most sought-after limited editions while actively interacting with rockstar Omega dealers, the Davidoff brothers, to enhance the public’s knowledge on vintage Omega history and culture.
And while the majority of Swiss watch brands consider their latest timepieces “products”—as in “these are our latest products – which has left me baffled as to why you would possibly place a miniature miracle of mechanical engineering and artisan craft in the same category as bananas or cabbage, Omega with Aeschlimann at the helm does not. They consider their watches manifestations of courage and very possibly the greatest human achievement, as expressed by the Omega Speedmaster; or intrinsically linked with the greatest heroic archetype in modern mythology, James Bond, as with the Seamaster 300. And the great thing is, you get the feeling that Aeschlimann and his team at Omega, while running one of the world’s most iconic watch brands, are also genuinely having fun and loving every precious second of what they are doing.
There is a very simple reason why under Aeschlimann’s stewardship Omega has grown from strength to strength, and that is because he and his team – comprising Greg Kissling, Jean-Pascal Perret, Jean-Claude Monachon, Petros Protopapas and many more – are all just as geeked out to the max as we are. Meaning that they are steeped in Omega lore as any of the most hardcore devotees are, and therefore capable of reaching into the subconscious collective mind of us all and extract from it the precise watches that we want to wear. Case in point: Speedy Tuesday number one, a tribute to the legendary radial-subdial Alaska III watches made for NASA; or Speedy Tuesday number two, a tribute to the 145.012-67 Ultraman; or the mesmerizing, sublime 50th-anniversary Apollo 11. Omega also reverse engineered the legendary caliber 321 from existing movements and various archival schematics to fulfill the dreams of Speedmaster collectors everywhere. This is, unfortunately, a rarity in the watch industry today where you often find INSEAD graduates in management roles, but with very little genuine passion for the intersection of science and magic known as Swiss horology.
One of my favourite things about the brand is that each time Omega does something, it achieves it with purpose. The now-trading-at-300-percent-retail-price Speedmaster Snoopy tribute to Apollo 13 features a ceramic bezel with a luminous tachymeter scale, making it unique in the watch industry. The Alaska III tribute features metallised luminous subdials. The 50th-anniversary Apollo 11 watch features a proprietary gold called “Moonshine,” which has an added touch of palladium to maintain is color consistency over time, as well as the first 861 caliber to feature George Daniel’s co-axial escapement; and if that wasn’t enough, it also features a silicon hairspring. What is amazing about Omega is its brilliant activation of its own and the Swatch Group’s competences – the silicon hairspring is a master achievement from the Group’s own Nivarox and it is used to create watches that are simultaneously extraordinary tributes to Omega’s past while demonstrating Omega and the Swatch Group’s fantastic milestones in technical innovation over the last few decades, and in particular under the leadership of Nick Hayek Jr.
Then there is the cultural significance of wearing an Omega today. With the majority of sports watches by Omega’s biggest competitor now constantly out of stock, they have become less watches but more trophies that can only be purchased at significant premiums on the secondary market. As such, those watches by Omega’s competition have now become somewhat aggressive symbols of affluence, communicating a kind of “I have it, you don’t” sensibility. This has created a big opportunity for Omega to become the calmer, more rational, more discreet and more elegantly understated choice. The point is, no one gets angry at you for wearing an Omega. No one is going to pull you over and search your luggage and possibly your bodily orifices for wearing an Omega.
Case in point: each time I go through customs and the X-ray machine reveals several watches in my carry-on luggage, the customs official will ask, “Any Rolex?” My response is invariably, “No, just a few Omegas like this,” and I will show him the vintage Speedy on my wrist. He will, nine times out of 10, hand me back my backpack and tell me to have a good day. This is not lost on Aeschlimann who understands with his typical brilliance that wearing another watch might put a smile on your face but anger those around you. Conversely, wear an Omega and everyone smiles back at you. For this reason as well as its accessible price, the Speedmaster Professional is rapidly becoming the watch of a new generation that eschews the clichéd trappings of status, and looks instead for ethics and content in what they wear.
What is Aeshlimann’s greatest challenge? With the global alignment of taste and with such a huge focus on four brands in particular—Rolex, Patek Philippe, Richard Mille and Audemars Piguet – the question is how Aeschlimann is going to consistently stake his and Omega’s claim as some of the most desirable watches in the world. But, as we’ve already seen, there is no brand that has so brilliantly dominated social media and its related communities than Omega, so I would say that Aeschlimann has things well in hand.
François-Henry Bennahmias, CEO Audemars Piguet
Who is François-Henry Bennahmias? To me, he is a figure that is controversial, polarising, but whose genius cannot be denied. Full disclosure: I have tremendous affection and deep respect for the man and consider him a friend, so it was interesting but also disturbing to see how many people (the majority of which were comfortably nestled in the cloak of anonymity provided by social media) were so keen to pile on the seething pool of viciousness when it came to criticising Audemars Piguet’s now infamous CODE 11.59 and vilify Bennahmias as the man behind this watch.
François-Henry Bennahmias, CEO Audemars Piguet
• Watch sales (2017, in CHF million): 950
• Change (2017, compared with 2016): +12%
• Watch sales share: 100%
• Worldwide market share: 2.6%
OK, to be fair, I’m not a fan of the watch. But did its design limitations merit the at-times crazed dogpile of hate that ignited like a Californian brushfire during a drought across the interconnected dunes and ravines of Instagram? No, it did not.
But the thing you need to understand is this: do you think this will have any effect on Audemars Piguet, which Bennahmias has single-handedly steered to becoming a one-billion-Swiss-franc company? No, it won’t. Do you think it will make the seemingly insurmountable lines to get on the Royal Oak wait list – let’s not even discuss the line for limited editions like the ceramic tourbillon – any shorter? No it won’t. Do you think it will prevent François from enacting his strategy to eliminate all multi-brand retailers (though he is receptive to offers for joint ventures) so that he can best control who his watches are sold to, how they are sold and actualise the full margin on them? Nope, it won’t. Do you think it is going to stop celebrities like John Mayer from declaring his love for his Royal Oak Concept tourbillon and bigging it up as the watch he wears most often? You can forget about that, too. So, in the end, whether the 11.59 stays or goes after its initial 2,000 watch production run, it doesn’t really matter. Bennahmias will still be at AP, and he’s got a long memory and a kind of Old Testament-like approach to retribution, so I might tread carefully.
Ok, sure, I disagree that the 11.59 is similar to the Royal Oak when it was launched in 1972. The Royal Oak was polarising because, first of all, it was a steel watch that cost as much as a Jaguar. And secondly, because it was so avant-gardist that the world had never seen anything like it. The 11.59, on the other hand, can be primarily criticised for not being the most exciting design in the world. But if that is Bennahmias’s only misstep, then he is still batting at an All-Star percentage. Let me refresh your memory.
You need to understand that if there is any one individual responsible for Audemars Piguet becoming the titanic success that it is today, it’s him. Back in the late ’90s when no one would serve them, François engaged with the rap community; and soon, everyone from Usher to Pharrell to most conspicuously Jay-Z, who would have his own edition of the Royal Oak Offshore, would be sporting an AP as a symbol of inclusion.
What was extraordinary was that this happened in tandem with rap becoming the single most dominant popular music genre, and its luminaries were soon worshipped as minor deities and their style became the subject of much aspiration and emulation. At the same time, the once-professional golfer Bennahmias engaged with the sports world, and soon LeBron James would become a massive proponent of the brand while Serena Williams still plays tennis with her Audemars Piguet on her wrist. Then there was the television phenomenon known as Entourage, where AP began making conspicuous appearances on the wrists of the host of characters, and soon Hollywood began following suit. And Bennahmias achieved all this while managing Audemars Piguet just in the United States.
In 2012, he ascended to the highest office at Audemars Piguet where he enacted a second revolution. In one of his first acts, he chose to reduce the price of his precious-metal watches with the explanation, “For many years the entire watch industry was raising its prices with no sense of rationality. At some point you have to justify the value of a watch. I saw that our gold watches were outside what I believed to the realm of justifiable value, and so I had to bring them back into alignment.” He was also the first CEO to reject the fashion-industry-like practice of bringing out new models and discontinuing older ones on a yearly basis. He explains, “We are not the fashion industry; we create beautiful objects that endure a lifetime or more. So why should we put the pressure on ourselves to come up with something new every year?”
Instead Bennahmias focused on streamlining his offering into clear, evergreen perennial, modern-classic favorites like the Royal Oak Ultra-Thin. People also forget that Bennahmias foresaw the return to more classic proportions, and in 2012 Audemars Piguet became the very first brand to make ultra-thin relevant and cool again. And it must have dawned on him that what many people perceive to be one of AP’s limitations could actually be its strength.
The thing about the Royal Oak is this. It is so iconic that when a man walks into a watch shop and has Royal Oak money in his pocket, he’s not going to leave with anything else. And in terms of quality, finish and most importantly instant recognition from his peers, he is going to be extremely satisfied – although, you could make the argument that Bennahmias is also largely responsible for the universal recognisability of the Royal Oak.
Much has been said about Audemars Piguet being a mono-product brand. But in truth, if Patek were to switch things up and make the ref. 5711 account for half of its production, it would only grow stronger. Because in the end what is the drawback of having primarily one model, if that model is timeless, an icon, one of the most evocative watches in the history of horology, genuinely damnably cool and is so embedded in the collective consciousness that no watch collector today doesn’t own one or doesn’t want to own one? Accordingly, François began to riff on the Royal Oak, to make special-edition watches such as the ceramic perpetual calendar and the fumé-dial platinum and titanium watches that drove collectors apoplectic with desire. And at the same time, he pushed on the technology front with amazing innovations like the Supersonnerie, the double balance wheel and a whole new range of in-house movements, including an integrated automatic chronograph that’s just been launched this year.
Since he’s been CEO, Bennahmias took the brand from 637,000 Swiss francs in revenue in 2012 to one billion Swiss francs in 2018, while still ensuring that the demand for the majority of his watches far outstrip supply, causing secondary values to be in excess of retail. That is nothing less than an act of sheer intelligent badass-itude. However, when it comes to producing just the right amount of watches to consistently feed and not frustrate the market, François has also demonstrated his mastery in this. Indeed he was one of the earliest engineers of the “access is the new discount” strategy.
What is the biggest challenge Bennahmias faces? Actually, I can’t think of any once the whole 11.59 thing passes. To me, I would say, “Fuck the haters,” and keep doing what he’s doing so well and embrace the fact that the Royal Oak and AP are synonymous. Because, let me tell you, the vast majority of watch brands out there would kill to have this problem.