What Audemars Piguet’s new CEO, Ilaria Resta, heralds for the luxury watch business

Audemars Piguet’s appointment of its new CEO Ilaria Resta has been the hottest topic in the luxury watch industry this week. Ms Resta comes from the perfumery and beauty industry, bringing over 26 years of experience leading and developing iconic global brands across a range of different segments.

By now the watch community has been abuzz for days, following the announcement of Audemars Piguet’s new CEO, Ilaria Resta. If you’ve never heard the name before, you’re not alone. Resta, while extraordinarily accomplished, is altogether new to the Swiss watch industry.

According to her biography on the website of her previous employer, Firmenich SA, Ms. Resta was named President, Global Perfumery in March 2020. Her mission was to lead “organizational change and pioneering digital innovation to lead Perfumery into new markets, augment creative excellence, and drive sales for winning performance with our customers”. In addition, Resta has more than 22 years of experience with Procter & Gamble, and built several brands for the Group. She also holds a Bachelor’s degree in Marketing and Economics from the University of Naples and a Master’s in Financial Mathematics.

The point is, even though she’s new to the industry, she has proven herself to be both highly intelligent and capable.

To me, the appointment of Ilaria Resta is a very clear statement of intent from Audemars Piguet. And that intent is that they have every ambition to take over the number one position in luxury watches from Cartier. Yes, I said Cartier because Rolex, with its 9.3 billion Swiss francs in revenue and 29.2-percent market share, I don’t even consider to be a luxury watch brand anymore. It has ascended to become something more — a universal luxury brand that has transcended its own category. But more on this later.

So this means that according to Morgan Stanley’s annual report on the Swiss watch industry, in 2022, the number one luxury watch brand in the world was Cartier, which boasted 2.75 billion Swiss francs in revenue based on 620,000 watches. This works out to an average price of 4,435.48 Swiss francs per watch. Cartier is estimated to occupy 7 percent of the luxury watch market. So, what is Audemars Piguet’s plan to overtake Cartier and how is Ilaria Resta the perfect leader to achieve this?

OK ask yourself this: out of Cartier’s revenue of 2.75 billion Swiss francs in 2022, how much of it do you think came from women’s watches versus men’s watches? 50 percent? I believe it’s probably a little more, but let’s just say 50 percent or 1.375 billion. Currently, Audemars Piguet occupies two positions down from Cartier; in between them is Omega, which generated 2.47 billion Swiss francs in revenue based on 560,000 watches with an average price of 4,410.71 Swiss francs. Audemars Piguet, in turn, generated 2.01 billion Swiss francs in revenue based on 50,000 watches, with an impressive average price of 40,200 Swiss francs.

Incidentally, this average is the second highest in the Swiss industry, surpassed only by Richard Mille, which at 1.3 billion Swiss francs based on 5,300 watches, boasts an insane average price of 245,283 Swiss francs per watch.

So, if you’re on the board of directors of Audemars Piguet and you want to grow your revenue from 2.01 billion Swiss francs to more than three billion relatively quickly, thus surpassing Cartier as the entrenched heavyweight champion in the luxury watch world, how do you do it? Well, one thing you wouldn’t do is to massively increase the production of your most iconic model, the Royal Oak, because the intense desirability of this watch is integral to your high brand equity. So, what should you do?

The answer was already provided in an interview with the out-going legendary CEO of Audemars Piguet, François-Henry Bennahmias, the man who took the brand from a 600 million Swiss francs revenue to cross over the two billion Swiss francs threshold in 10 years, while also massively increasing desirability for his timepieces that every watch produced is guaranteed to sell out.

He explained in conversation with Revolution’s Eleonor Picciotto, “Our focus for the immediate future is on women. We want to make our women’s watches the equivalent of the Hermès Birkin.” Taking a page from Hermès and the Birkin, Bennahmias ensured that delta between supply and demand for his most desired models remained high enough that secondary prices exceeded primary. Thus ensuring the guaranteed success of his primary watches. Especially anything with an octagonal bezel.

So how does Ilaria Resta tie in with all this? Ask yourself the following: out of Audemars Piguet’s 2.01 billion Swiss francs’ worth of watches sold, what percentage of these do you think were women’s watches? I don’t mean the mid-sized gemset chronographs and tourbillons, but dedicated women’s watches. I would guess somewhere between 10 to 20 percent maximum. So, the strategy would go like this: AP, thanks to Bennahmias, has increased the desirability of every men’s (including mid-sized) watch produced to the extent that there is a waiting list for every single model. So their men’s watch category is incredibly stable. It would be dangerous to mess with this. To massively increase the quantity of these watches could adversely affect desirability.

But what if they were able to increase their revenue for women’s watches so that they could grow to become a brand that is desired equally by women and men, like Cartier? What if they were able to grow their relatively untapped women’s watch category to reach parity in terms of percentage with their men’s watches? This would be an immediate pathway to reach over 3 billion Swiss francs in revenue, without having to grow the men’s category significantly and thus protecting their desirability and AP’s corresponding incredible brand equity.

But in order to do that, they would have to massively increase women’s awareness of and desire for their watches. And let’s face it: while their women’s timepieces, in particular the Carolina Bucci Frosted Gold Royal Oaks, are some of the most sublime on the market, both awareness and desire for AP by women pale in comparison to that for Cartier, Rolex and even Patek Philippe. So, how do you cultivate and enhance the desire amongst female customers in a supercharged way? It would seem logical that you would need to get yourself some truly brilliant female leaders.

AP already has two with Olivia Crouan, its Chief Brand Officer, and its Head of Media and Influence, Aurelia Jouhanneau. With the addition of Ilaria Resta, they’ve basically put together a mighty all-female think tank with massive experience in different industries, and a specialization in digital innovation to achieve this goal. They should also consider appointing female brand ambassadors for AP, which currently do not exist.

“So, how do you cultivate and enhance the desire amongst female customers in a supercharged way? It would seem logical that you would need to get yourself some truly brilliant female leaders.”

But Resta’s appointment is only step one in solving the puzzle. Step two relates to Bennahmias’s statement that AP wants their women’s watches to be the equivalent of the Hermès Birkin. Ask yourself, what is a Birkin? In pragmatic terms, it’s a handbag created by Jean-Louis Dumas for Jane Birkin to replace the messy wicker basket she used to tote around. It is actually based on a men’s saddle bag called the Haut à Courroies. But do the majority of luxury consumers in the world know or care about this? The answer is a resounding no.

What they recognize of the Birkin, is that it is the ultimate, the single most desired handbag on the planet. It is an icon that is so renowned, so lusted after, and so hotly contested as desire so massively outstrips supply, that it transcends the handbag category altogether and has become an international symbol of success.

Audemars Piguet is very familiar with transcending the wristwatch category as it has focused unremittingly on achieving this with its Royal Oak — a watch so sought after, so immediately recognizable and so hard to acquire that it has become far more than a timepiece, but an international success symbol. Is it alone? Not entirely. I would say that Richard Mille has also achieved this across all its tonneau-shaped models, as has Patek Philippe with the Nautilus, and Rolex with its entire sports category and in particular the Daytona.

But to be fair, to me, the Royal Oak has already achieved the same mythological status of the Birkin. The accomplishment of this was integral to Bennahmias’s successful transformation of AP from a 600-million-Swiss-francs-a-year business to an over 2-billion-Swiss-francs business. But now AP and Resta will have to do the same with their women’s watches. And this will be the primary focus of Resta. Is it possible? Yes. Will it be easy? No. If she is able to achieve this, if she is able to contest with or even surpass Cartier’s 2.75 billion Swiss francs revenue by uplifting AP’s women’s category, she will immediately position herself as one of the most important CEOs in the Swiss watch industry and its very first 3 billion Swiss francs woman.