SIHH Interview with FHB

[Burlington]

Great interview with François-Henry Bennahmias..

https://www.youtube.com/watch?v=wdOYN69FOX8

Confirms 40k watches per year until 2020...which ties in with the anecdotal increase in higher end pieces, driving increased value for AP.

Interesting thoughts on taking a slice of the pre-owned market in future...maybe thats the E-commerce angle they will go in with.

Brand new line coming in next 12 months - should be an interesting year !

[mwasheikh]

Couldn’t agree more thanks Burlington!

[SMD]

Originally Posted by Burlington

Great interview with François-Henry Bennahmias..

https://www.youtube.com/watch?v=wdOYN69FOX8

Confirms 40k watches per year until 2020...which ties in with the anecdotal increase in higher end pieces, driving increased value for AP.

Interesting thoughts on taking a slice of the pre-owned market in future...maybe thats the E-commerce angle they will go in with.

Brand new line coming in next 12 months - should be an interesting year !

I think this is very smart.

[Burlington]

Yep - as he says, it's a model that works well for car manufacturers..

Especially if it came with an AP backed guarantee

[texasmade]

I think he's a much better CEO than Stern is at PP. Stern got his spot because of his name while FHB earned his spot and knows the industry as well as the business.

[SC11]

I really love watching him in interviews, not just because of my liking for the brand I just enjoy his straight talking and sense of humour!

[singe89]

Great interview. Really like hearing his thoughts and direction for the company. The focus on the customer experience, integrating women/designs, marketing and above all the secondary market.

Once they close down more ADs so greys have a hard time getting new stock they could significantly cripple the greys on the secondary market. Watches are not really like cars with wear and tear. Buying a used AP that has been properly and fully serviced by AP with warranty sounds like a great model. With success they could raise prices in the secondary market by limiting supply at times and better control new and used prices.

And I loved the response when asked about "only making one watch design"..."would you ask the same question to Rolex". I've said that many times

[tyler1980]

Originally Posted by singe89

Great interview. Really like hearing his thoughts and direction for the company. The focus on the customer experience, integrating women/designs, marketing and above all the secondary market.

Once they close down more ADs so greys have a hard time getting new stock they could significantly cripple the greys on the secondary market. Watches are not really like cars with wear and tear. Buying a used AP that has been properly and fully serviced by AP with warranty sounds like a great model. With success they could raise prices in the secondary market by limiting supply at times and better control new and used prices.

And I loved the response when asked about "only making one watch design"..."would you ask the same question to Rolex"

the problem with dealing with preowned models sold by AP is it takes the risk for the buyer out of the secondary market which is why most people stay away from it to begin with. It has a real risk for AP that it will cannibalize sales of new watches since they are sold by them and will cost less than new ones.

As you said its not like cars, at least with cars the fact that they have a finite life span keeps new models selling

[texasmade]

Doesn't FPJ already do this though with their watches?

[tyler1980]

Originally Posted by texasmade

Doesn't FPJ already do this though with their watches?

yes, don't know the details though but i read something about it on Hodinkee i think

[singe89]

Originally Posted by tyler1980

the problem with dealing with preowned models sold by AP is it takes the risk for the buyer out of the secondary market which is why most people stay away from it to begin with. It has a real risk for AP that it will cannibalize sales of new watches since they are sold by them and will cost less than new ones.

As you said its not like cars, at least with cars the fact that they have a finite life span keeps new models selling

Totally agree but they can figure out a proper pricing and production strategy to not completely cannibalize new watch sales. With the way AP is making limited productions now and updating its current lines it can create more reasons to buy the new versions (new dial colors, 42mm ceramic bezel, etc).

Also, if they are in the secondary market and they keep records on all watches sold maybe they can help track down watches that customers might want to sell/buy. If I'm looking for a great condition RB2 they know who has them. One of the main reasons I've purchased from greys is that they can get the watches I want faster than my local ADs. If AP can do this with new and used watches that a big value to collectors.

[HK Islandboy]

Very interesting interview. Thank you for posting

I would be all over AP-managed second hand sales - not so much to save €€, but more to get access to some of the legacy models that I prefer over current pieces, but with increased confidence on provenance and quality

[tng11]

Originally Posted by texasmade

Doesn't FPJ already do this though with their watches?

They only do it for out of production models. It will be interesting to see how AP executes this.

[2Redbulls]

Now I understand the weird/feminine colors of the divers.

[AK797]

Controlling the used market is an interesting development, pushing on from Rolex who have introduced many measures on ADs and whom they could sell to. A brand new line next year would be very interesting. And was he asked where are the new inhouses, I didn't listen to all of it?

[AK797]

Originally Posted by tyler1980

the problem with dealing with preowned models sold by AP is it takes the risk for the buyer out of the secondary market which is why most people stay away from it to begin with. It has a real risk for AP that it will cannibalize sales of new watches since they are sold by them and will cost less than new ones.

As you said its not like cars, at least with cars the fact that they have a finite life span keeps new models selling

The advantage AP have over say Rolex is that their watches are largely high luxury, as opposed to mid-luxury, and so most buyers will want a brand new piece rather than save a few grand and buy a used one, esp if AP can control the used market and keep resale prices relatively high and stable.

[AK797]

Originally Posted by 2Redbulls

Now I understand the weird/feminine colors of the divers.

He sure does love the ladies...

[sssteel]

Originally Posted by singe89

Once they close down more ADs so greys have a hard time getting new stock they could significantly cripple the greys on the secondary market. Watches are not really like cars with wear and tear. Buying a used AP that has been properly and fully serviced by AP with warranty sounds like a great model. With success they could raise prices in the secondary market by limiting supply at times and better control new and used prices.

How do you expect DavidSW and Takuya (not just them - any others too!) to fare after this occurs??
A little curious!

[2Redbulls]

Originally Posted by sssteel

How do you expect DavidSW and Takuya (not just them - any others too!) to fare after this occurs??
A little curious!

It would certainly impact margins for them. Unless it's a $2K or more discount, I'd just buy it from AP direct. The trick for AP will be balancing new sales next to preowned. My guess would be to keep distribution separated. So there's never a side by side comparison in retail brick and mortar.

[tonupbklyn]

this is very interesting and now makes sense: back when i was contemplating between the 15400 vs 15202, i had visited the NY boutique a few times to compare/contrast the two models.

at the time i also owned the ROO black themes on SS bracelet.
didn't realize they had such a thing, but the sales consultant asked if I'd be interested in trading in the ROO.
i remember commenting that i wasn't aware that AP did such a thing, and he replied that it was a 'new program' that they were trying out.

perhaps the was the pilot of said program.

[2Redbulls]

Originally Posted by tonupbklyn

this is very interesting and now makes sense: back when i was contemplating between the 15400 vs 15202, i had visited the NY boutique a few times to compare/contrast the two models.

at the time i also owned the ROO black themes on SS bracelet.
didn't realize they had such a thing, but the sales consultant asked if I'd be interested in trading in the ROO.
i remember commenting that i wasn't aware that AP did such a thing, and he replied that it was a 'new program' that they were trying out.

perhaps the was the pilot of said program.

How long ago was that?

[tonupbklyn]

Originally Posted by 2Redbulls

How long ago was that?

back around April 2017

[tyler1980]

Originally Posted by tng11

They only do it for out of production models. It will be interesting to see how AP executes this.

i knew there was a catch, thanks as i didn't know any details

[tyler1980]

Originally Posted by AK797

The advantage AP have over say Rolex is that their watches are largely high luxury, as opposed to mid-luxury, and so most buyers will want a brand new piece rather than save a few grand and buy a used one, esp if AP can control the used market and keep resale prices relatively high and stable.

thats true, good point

I wonder how they will deal with preowned pieces that sell for a premium on the secondary market (15407), especially stickered ones that people never intended on wearing.

Are they going to price it above retail? That is where it gets really sticky.

[jumpmandk]

Originally Posted by tyler1980

thats true, good point

I wonder how they will deal with preowned pieces that sell for a premium on the secondary market (15407), especially stickered ones that people never intended on wearing.

Are they going to price it above retail? That is where it gets really sticky.

Like luxury vehicles, I wonder if AP would pilot a lease program for watches??

[tyler1980]

Originally Posted by jumpmandk

Like luxury vehicles, I wonder if AP would pilot a lease program for watches??

we can all dream right

With the amount of watches we all go through on the forum, id gladly pay a rental fee for the non permanent members of my collection. Better than the hit you would take on resale.

[AK797]

Originally Posted by tyler1980

thats true, good point

I wonder how they will deal with preowned pieces that sell for a premium on the secondary market (15407), especially stickered ones that people never intended on wearing.

Are they going to price it above retail? That is where it gets really sticky.

Yes, and that will speak a lot to what kind of company philosophy they really have. My guess is they will want to protect the brand name first and foremost, particularly as they are largely a SM/forum company now as FHB admitted, and so will not want to be accused of mercenary gouging, so I can't see them charging higher prices than retail, as they don't need to make every last cent like resellers do, and gradually the used market will adjust to their bid and ask prices. Or I think they would rather increase supply or prices of those models so they are in market equilibrium.

[AK797]

Originally Posted by sssteel

How do you expect DavidSW and Takuya (not just them - any others too!) to fare after this occurs??
A little curious!

Could be very tough for resellers now, as is the aim, as AP don't need to make much if any "second" profit on their watches, they may even take a loss at first, so they can undercut the greys on pricing and drive them out of the market.

[Rachdanon]

I liked the part about how AP views marketing, not in the usual sense of advertisements but pleasing each customer so he becomes the ambassador for the brand. Also why 40,000 as he views luxury as exclusivity.

[tng11]

It's hard to speculate how this program will perform or what impact it will have on the grey market and prices without more details.

AP has to be careful to a) not cannibalize its market for new watches, and b) maintain the value of the secondary market buy/sell prices, so as to not give any prospective buyers of new or used AP watches any doubt about whether they retain their value on the secondary market.

My guess would be is that it's going to be only for discontinued references, much like the FPJ program. It would add significant value to the market - as AP has a lot of desirable references that are discontinued, but I myself, would be skeptical of buying from sources where the history of the watch is unknown. For instance, I'd love an RB2, but I can't seem to trust the examples out in the market right now. I'd definitely pay a premium for an AP certified one.