Luxury Watch Brand Audemars Pigeut Bought Shares Of Its Licensed Dealers To Strengthen Its Control Over Net Sales.

Swiss luxury watch maker

(Audemars Pigeut watch) and Richard Mille are buying shares of their franchisees to enhance their control over the sales network.

The innovation speed of luxury watch distribution is relatively slow, and the high price is online purchase.

The barrier of watches is that consumers prefer the traditional way of buying.

However, many operations are numerous.

Sales of watch retailers are sluggish and inventory is unsalable, prompting some luxury watch brands to gradually reduce their reliance on third party multi brand distributors, which will also help improve brand profitability.

However, analysts said that third party distributors still account for about 75% of luxury watches sales.

According to the world clothing and shoe net, Audemars Pigeut's family business, which originated in 1875, has previously said it plans to open single brand stores within three to five years, hoping to completely control the distribution channels of its luxury watches, and gradually terminate cooperation with the third party multi brand watch retailers, so as to boost sales growth.

Of the 200 sales outlets of Audemars Pigeut watches, 60 are single brand stores, but only 25 of them are owned by Audemars Pigeut tables, and the remaining more than 30 are franchised stores. Audemars Pigeut is currently investing in these franchises.

Francois-Henry Bennahmias, chief executive of the company, said at this week's Geneva international advanced horological watch exhibition (SIHH): "distributors all over the world have different ways of doing business. For example, in our stores in Rome and New York, customers will get different information about our brands, some of which may conflict with each other, and we want to avoid this."

Audemars Pigeut said that the purpose of the company's adjustment strategy is to boost sales.

After changing the way of operation, sales increased by 10% to 1 billion 100 million Swiss francs last year, half of which came from single brand stores.

Francois-Henry Bennahmias said: "this growth is remarkable, this is an irreversible trend."

The Swiss Richard Mille, which has an average price of 180 thousand euros, is also more and more inclined to purchase (third party run) single brand stores. Brand marketing director Tim Malachard said that the sales revenue of Richard Mille 75% came from these 40 single brand boutiques.

Richard Mille launched this business strategy in 2001 with the aim of phasing out multi brand retailers.

The brand currently has 44 single brand stores, and will increase to 50 to 55 in the future.

Tim Malachard said: "this way of operation will enable us to better understand our customers and avoid large-scale discount promotions."

The strategy of Audemars Pigeut watch and Richard Mille is not a case in the watch industry.

Cartier, a brand like Cartire and Richemont, has adopted a similar approach to store more stores within the brand itself. (IWC)

At present, the income of 63% of the group is derived from its own stores, which was 42% 42% years ago.

Luxury watch brands such as Cartire have been repurchasing distributors' inventory in recent years to prevent distributors from selling at a discount price in the "gray market".

Ricardo Guadalupe, CEO of Hublot, a Swiss luxury watch brand in LVMH, said: "in the past, the number of multi brand retailers with 50 operating brands is gradually disappearing, leaving only a few big brands."

Yu Bao table is also reducing the number of wholesalers, but in the long run, the wholesale sales of the watches will still account for half of the total sales.

But this shift to self-regulation is not universal. Luxury watch giants such as privately owned Rolex (Rolex) and Patek Philippe (Patek Philippe) are still sticking to the line of multi brand stores.

For some smaller independent brands and watchmakers, they simply can not afford the higher fixed costs and business risks of single brand stores.

"Smaller independent brands are inseparable from wholesale distributors," said Marco Tedeschi, chief executive of Swiss luxury watch brand RJ.

But Marco Tedeschi also said that RJ is turning to distributors with fewer stock brands, which may help sales.

Charris Yadigaroglou, director of communications at the Swiss independent watchmaker MB&F, said that MB&F produces 250 futuristic clocks a year. Sales of joint ventures from several shopping arcades in Geneva and Dubai account for 1/4 of MB&F's total sales, which provides them with another way to reach customers.

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