WEBVTT - Audemars Piguet CEO Ilaria Resta Talks Global Watch Market

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<v Speaker 1>My next guest is the highest ranked woman in Swiss watches,

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<v Speaker 1>I would say watches in general. Ilaria Aresta became the

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<v Speaker 1>new chief executive Domas Pig earlier this year, following two

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<v Speaker 1>decades of consumer goods Giant, Procter and Gamble. Now a

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<v Speaker 1>less say. Her mission is to stabilize a brand and

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<v Speaker 1>catalyze on its transformation from a watchmaker to a luxury house.

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<v Speaker 1>I'm delighted that Laria Aresta joins me now, thanks so much.

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<v Speaker 1>Welcome to Bloomberg and welcome to Lounder, London. Ilaria Aresta,

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<v Speaker 1>when you look at some of the challenges ahead, how's

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<v Speaker 1>it going, and you've been in charge for a year,

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<v Speaker 1>there are things that you wanted to do. Are they

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<v Speaker 1>at speed?

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<v Speaker 2>Yes?

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<v Speaker 3>They are at speed of course, as when I say

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<v Speaker 3>joined the market new reality heat which is which is

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<v Speaker 3>in a way of blessing in disguise, because it gave

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<v Speaker 3>me the chance only honestly to focus on the strategies

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<v Speaker 3>and rethink about the growth opportunities moving forward and stabilize

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<v Speaker 3>this business before continuing their growth.

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<v Speaker 1>Laria, when you look at your main markets, I know

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<v Speaker 1>China was a big one with a lot of question marks,

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<v Speaker 1>today we have stimulus the US. The biggest of course

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<v Speaker 1>market for watch is how are those going.

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<v Speaker 3>We are very well balanced in terms of presence by market,

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<v Speaker 3>so we are not affected by the downward trend. In China,

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<v Speaker 3>we're actually very well spread by country, by regions, so

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<v Speaker 3>we continue solid growth. We're very happy about what we

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<v Speaker 3>put in place for the future, so so far we

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<v Speaker 3>are not affected by the macroeconomic instability.

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<v Speaker 1>The waiting list, of course for a watch is huge.

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<v Speaker 1>Does it mean that as a customer now I have

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<v Speaker 1>a shorter list to get to watch I want.

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<v Speaker 3>We continue having a high demand and we continue luckily

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<v Speaker 3>so continue proceeding with our production strategy, which is highly manual,

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<v Speaker 3>highly elevated in terms of orological signature, so we try

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<v Speaker 3>to push more complications because of that. Of course, it's

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<v Speaker 3>a long process of production and it takes months, if

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<v Speaker 3>not years, to develop a new watch.

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<v Speaker 1>You almost came as an outsider to the watch industry.

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<v Speaker 1>What have you learned over the last twelve months.

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<v Speaker 2>Well, definitely an outsider.

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<v Speaker 3>I've never worked in this industry and it has been

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<v Speaker 3>a wonderful discovery. Definitely is a different dynamic from the

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<v Speaker 3>FMCG world, where I come from from a public literary

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<v Speaker 3>a company and now work in a family company with

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<v Speaker 3>a different governance.

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<v Speaker 2>But definitely the common points are the.

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<v Speaker 3>Leadership needs, the value creation.

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<v Speaker 2>Work that I have to do.

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<v Speaker 3>Of course, it's a completely different time horizon producing a watch.

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<v Speaker 3>It's a very very long investment in time. Sometimes it

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<v Speaker 3>takes even ten years to develop a watch. Quite the

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<v Speaker 3>opposite of FMACG dynamics.

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<v Speaker 1>How many watches you make? Around fifty fifty one.

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<v Speaker 2>That's pretty much where we are, well pretty.

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<v Speaker 1>Much, I mean, are you trying to increase that or actually,

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<v Speaker 1>is demand so important or is the scarcity of it

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<v Speaker 1>so important that you'll stay around these figures.

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<v Speaker 2>It's not about the scarcity.

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<v Speaker 3>It's about our strategy of production and manufacturing, which is

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<v Speaker 3>a focused on on elevating the complications and the innovation

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<v Speaker 3>and watchmaking. That's why we focus much more on research,

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<v Speaker 3>and these activities require time. We want to continue doing

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<v Speaker 3>what we used to do in the past one hundred

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<v Speaker 3>and fifty years ago, which is developing and advancing roological

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<v Speaker 3>invention and high end The high complications are important in

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<v Speaker 3>the mix of products, so we are complicating more our portfolio.

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<v Speaker 1>And so what's the magic in that once you have

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<v Speaker 1>the product, is it how you sounds influencers? Is it

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<v Speaker 1>you know you have? The brand is very well known

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<v Speaker 1>also inside rap music, which has given it an extra

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<v Speaker 1>appards when.

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<v Speaker 2>It starts from the watchmaker.

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<v Speaker 3>When you go to the bench of a watchmaker, you

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<v Speaker 3>feel the passion and the emotion of the watchmaker passing

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<v Speaker 3>this passion and emotion in an object, in a time piece,

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<v Speaker 3>and it's incredible how these emotions can travel all the

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<v Speaker 3>way to the final client. And that's why we're very

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<v Speaker 3>happy to have a diary distribution, because this allows us

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<v Speaker 3>really to tell stories and to explain what it takes

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<v Speaker 3>for that specific watch.

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<v Speaker 2>To end on the risk of our client.

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<v Speaker 1>How much do you want to diversify I know, for example,

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<v Speaker 1>you know there are still plans to do sales of

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<v Speaker 1>the Code eleven fifty nine, but you have the Royal

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<v Speaker 1>equally dominating the sales.

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<v Speaker 3>We want to diversify firs of all from a client's

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<v Speaker 3>stand point. We are underdeveloped in among women, which is

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<v Speaker 3>an industry phenomenon, and now we see women actually being

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<v Speaker 3>more and more interested in mechanical watchmaking and high hand

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<v Speaker 3>mechanical watchmaking. We are breaking the bias that women are

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<v Speaker 3>much more interested in.

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<v Speaker 2>Jewelry watches or quarts watches.

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<v Speaker 3>In reality, they are extremely interested in mechanical watches. They

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<v Speaker 3>are becoming collectors and by twenty thirty we estimate forty

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<v Speaker 3>five percent of buyers will be women and they will

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<v Speaker 3>buy themselves and build themselves their collection. So no longer

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<v Speaker 3>the stereotype of the men buying watches for women. So

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<v Speaker 3>we are trying to cater to women, cater to new

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<v Speaker 3>generations of clients, and hence our portfolio will be adjusted

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<v Speaker 3>to these these clients.

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<v Speaker 1>It does a female buyer shop differently, for example in

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<v Speaker 1>Switzerland or France compared to the US for China.

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<v Speaker 3>That's what we're indeed analyzing and studying. There is a

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<v Speaker 3>different retail environment and ceremony that women are looking for.

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<v Speaker 2>They love actually education, so.

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<v Speaker 3>That's why we're organizing master class for women to go

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<v Speaker 3>behind the scene of the developing a watch. We put

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<v Speaker 3>actually watches in their hands, we dismantle with them just

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<v Speaker 3>to show what the mechanical movement is and it's incredible

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<v Speaker 3>much they are very interested into the mechanical elements of watchmaking.

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<v Speaker 3>So we're moving much more into storytelling than selling real

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<v Speaker 3>workshop hands on activities with women, but also with new generations.

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<v Speaker 1>Laria, I mean, there was this report from de Lloyde

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<v Speaker 1>showing actually the watch industry was failing to make and

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<v Speaker 1>market watches that women wanted to buy. Do you have

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<v Speaker 1>a procestage of sales target that you have towards women?

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<v Speaker 1>How much do you sell to women now and how

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<v Speaker 1>much you want to sell in five years?

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<v Speaker 3>We are in the range of twenty percent, pretty much

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<v Speaker 3>like the market. We aim at a mirror in the

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<v Speaker 3>market reality. We don't want to be behind the market.

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<v Speaker 3>We want to offer women the watches they want. The

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<v Speaker 3>certain point has been not listening to women from the

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<v Speaker 3>entire industry. I think there were so many stereotypes that

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<v Speaker 3>we are trying to break. And also it's important that

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<v Speaker 3>we stop separating the market between women watches and men watches,

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<v Speaker 3>because this is not the way women think about the

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<v Speaker 3>category nor men.

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<v Speaker 1>By the way, Rolex and as making begin roads certified

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<v Speaker 1>pre owned programs will all the mars go the same way.

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<v Speaker 3>We are working on it as a service for clients.

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<v Speaker 3>It's been a while we've been working now on this

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<v Speaker 3>program and now we will be ready in twenty twenty five.

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<v Speaker 1>I mean there's also a lot of you know, speculation

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<v Speaker 1>at least talk about volsh of our movement and the

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<v Speaker 1>fact that there could be a consortium. These are this

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<v Speaker 1>is a Swiss company that makes some of your movement parts.

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<v Speaker 1>Would you like to be involved that they make more

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<v Speaker 1>sense for you know, watchmaker to have in charge of

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<v Speaker 1>all the supply chain.

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<v Speaker 3>What matters to us is that to ensure that the

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<v Speaker 3>industry is well served by our suppliers and we create

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<v Speaker 3>an ecosystem where we can be codependent. We have always

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<v Speaker 3>worked in Switzerland with this system.

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<v Speaker 2>Of a tabli sage. That's how we or the Martigue

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<v Speaker 2>was born.

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<v Speaker 3>We were at the center as a project manager of

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<v Speaker 3>watches and working with different companies, families sometimes expert in

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<v Speaker 3>specific movements. We want to continue to have a healthy

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<v Speaker 3>balance of partnership with external at the same time we

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<v Speaker 3>need to start the owning and mastering. Also the production

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<v Speaker 3>of some elements like ceramics, for example, is an important

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<v Speaker 3>material for us that we start producing ourselves. But we

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<v Speaker 3>believe in the balance of external internal capabilities.

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<v Speaker 1>Like when you look at I mean every day we

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<v Speaker 1>talk about geopolitics and you know, the Trump teriffs impacts

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<v Speaker 1>a company like odo Mars.

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<v Speaker 3>We don't see this impact after the direction in the US.

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<v Speaker 3>At this stage, US continues being the biggest market and

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<v Speaker 3>the one actually that even in twenty twenty three is

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<v Speaker 3>posted the strongest strongest growth. We have high demand. Also

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<v Speaker 3>given our relatives most sizes, we are not so affected

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<v Speaker 3>by geopolitic fluctuate fluctuations.

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<v Speaker 1>So what's your biggest problem solving? I mean over the

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<v Speaker 1>next twelve months, if you'll get your three priorities.

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<v Speaker 3>My priority is first of one, ensuring that we set

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<v Speaker 3>the foundation.

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<v Speaker 2>I set the foundation for.

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<v Speaker 3>This company to thrive and live for the next one

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<v Speaker 3>hundred and fifty years as an independent company. Because we

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<v Speaker 3>want to remain independent and to do so, innovation and

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<v Speaker 3>research is critical. We need to continue being ahead of

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<v Speaker 3>the game. There is another pillar of the strategy which

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<v Speaker 3>is clients centricity.

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<v Speaker 2>You have seen it women on one side, the new generations.

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<v Speaker 3>They all come with a completely different approach to retail,

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<v Speaker 3>to purchasing, but also to type of watch they want.

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<v Speaker 3>I mentioned complications, so we need to be listening. And

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<v Speaker 3>then sustainability is becoming more and more a topic also

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<v Speaker 3>in watchmaking, and we need to be ahead there.

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<v Speaker 1>When you look at the independence of the brand. Again,

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<v Speaker 1>the rumors about all your major other big companies taking

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<v Speaker 1>interest in other march you think the family would ever sell.

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<v Speaker 3>No, we are really committed to remain an independent company.

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<v Speaker 2>As part of the DNA of the company.

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<v Speaker 3>Is thanks to these independence that we are able to

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<v Speaker 3>do the wonderful time pieces we do and being a

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<v Speaker 3>focus in Leval deju which is our cradle where we started.

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<v Speaker 3>We want to guarantee also a certain continuity or way

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<v Speaker 3>of doing business and time pieces.

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<v Speaker 2>So we're committed to that.

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<v Speaker 1>You've been in charge for a years and that means,

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<v Speaker 1>of course changes as you brought in new people. Are

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<v Speaker 1>you halfway there? In ninety percent there? Of the team

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<v Speaker 1>that you want to have.

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<v Speaker 3>Built, ninety percent there? The team is almost complete and

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<v Speaker 3>ready to start. But I'm also very very glad to

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<v Speaker 3>have and a wonderful a chip of watchmakers in manufacturers

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<v Speaker 3>and in other departments that are very solid.

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<v Speaker 2>They have and a wonderful team that supports me.

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<v Speaker 1>Do you have a favorite watch? I don't feel like

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<v Speaker 1>I don't know if it's like asking if you have

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<v Speaker 1>a favorite child.

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<v Speaker 4>I have a favorite and you shouldn't ask this true,

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<v Speaker 4>It's like it's like children. Today, I'm wearing a code

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<v Speaker 4>which is actually I watch that a model that I

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<v Speaker 4>really really love. But my favorite complication by far is

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<v Speaker 4>the perpetual calendar.

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<v Speaker 1>Okay, perfect, thank you so much for doing Ushilarry arresta.

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<v Speaker 1>There are, with all the incredible movements that Odmars Pigue

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<v Speaker 1>has to do to make some of these watches achieve executives.

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<v Speaker 1>There of ap watches