Luxury watchmaker Audemars embraces pre-owned market

A diamond-studded Audemars Piguet Royal Oak, similar to above, “with moderate scratches” sells for $9,450 on The RealReal online site, about a third of the “estimated retail price.” (Reuters)
Updated 19 January 2018
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Luxury watchmaker Audemars embraces pre-owned market

GENEVA: Swiss luxury watchmaker Audemars Piguet said it would launch a second-hand business this year, becoming the first big brand to announce plans to tap into a fast-growing market for pre-owned premium watches.
The company said it had carried out a test run in one store in Geneva and would launch the business more widely at its outlets in Switzerland this year. If this proved successful, it said it would roll out the operation in the US and Japan.
“Second-hand is the next big thing in the watch industry,” Chief Executive Francois-Henry Bennahmias said in an interview at the SIHH watch fair in Geneva this week.
Luxury watchmakers have hitherto eschewed the second-hand trade, fearing diluting the exclusivity of their brands and cannibalizing their sales. They have instead ceded the ground to third-party dealers.
But some are now looking to change tack, driven by an industry-wide sales slowdown combined with a second-hand market that is expanding rapidly, fueled by online platforms like Chrono24 and The RealReal.
“At the moment, in watches, we leave it to what I call the ‘dark side’ to deal with demand for pre-owned pieces,” added Bennahmias, whose company is known for its octagonal Royal Oak timepieces that sell for 40,000 Swiss francs (SR156,283) on average.
“Anybody but the brands (is selling second hand) — it’s an aberration commercially speaking,” he said, without giving any details about how they would price pre-owned watches.
Several smaller brands, including H.Moser & Cie and MB&F, have signaled interest in the second-hand trade.
“It is important to control the sale of second-hand watches to protect the owners and the value of watches already in the market by keeping the grey market in check,” H.Moser & Cie boss Edouard Meylan said.
MB&F, which plans to launch second-hand sales via its website this year, said it expected to typically give a 20-30 percent discount on second-hand watches. A spokesman said customers buying from established watch brands could feel confident they were getting genuine products in good working order and with a valid warranty.
Bigger brands Rolex, Patek Philippe, Swatch Group, Richemont and Breitling all declined to comment, when asked whether they planned to enter the second-hand market, while LVMH’s watch division was not immediately available.
Audemars Piguet said it would launch its second-hand business in several, but not all, of its 26 Swiss outlets, but declined to specify how many stores or give a more precise date.
It will initially allow customers to trade in old Audemars Piguet watches as part-exchange for new ones, and then sell on the second-hand watches. It has not yet decided whether to buy second-hand watches for cash, added the firm, saying its sales had come close to the 1-billion Swiss franc mark last year.
Experts say the second-hand luxury watches business, mostly done via online platforms or specialized retailers, is growing rapidly as a new generation of customers that values variety more than permanent ownership enters the luxury world.
In an example of the discounts offered online, a diamond-studded Audemars Piguet Royal Oak “with moderate scratches” sells for $9,450 on The RealReal, about a third of the “estimated retail price.”
Kepler Cheuvreux analyst Jon Cox said he estimated the size of the second-hand market at around $5 billion a year in revenue, including watches sold at auction, and that it had outperformed the market for new pieces in the last couple of years.
That is still dwarfed by a new luxury watch sector worth €37 billion, according to consultancy Bain & Cie. However Swiss watch exports fell 3.3 percent in 2015 and 9.9 percent in 2016 before posting a modest 2.8 percent rise in the first 11 months of 2017.
The US, where sales of new watches have been falling for years, is the number one market for pre-owned watches, followed by Britain and Japan, said US retailer Danny Govberg, who sells new watches for Rolex and other brands, but also an increasing number of second-hand timepieces. His company said its second-hand sales had grown by 37-40 percent year-on-year over the past five years. In an example of prices, it said it listed a second-hand Audemars Piguet Royal Oak for $24,950 compared with a $32,000 retail price.
Together with a partner in Hong Kong and a Singapore-based investor, Govberg recently launched global e-commerce platform WatchBox for buying and selling pre-owned luxury watches.
“People sell us watches by the bucket,” he said.
He said many people sold watches to buy a new one so the pre-owned market was actually driving new sales, like in the car market. “The brands are still trying to figure it out, they don’t have the solution yet,” he said.
Audemars Piguet’s Bennahmias said watchmakers had to amend business models to deal with changing consumer habits.
“We’re witnessing a social and cultural change that forces us to think about what the business will look like in five or 10 years,” he added. “Time flies, we need to watch out.”


From genetics to fashion design, glamor is in Fidda Al-Marzouqi’s genes

A gown designed by Cabochon’s Fidda Al-Marzouqi.(Supplied)
Updated 18 October 2018
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From genetics to fashion design, glamor is in Fidda Al-Marzouqi’s genes

  • Fidda Al-Marzouqi talks about her label Cabochon
  • The label is known for its elegant evening gowns and fitted looks

DUBAI: She may have studied genetics and public health, but Fidda Al-Marzouqi has found success in a decidedly more creative field in her home town of Abu Dhabi.

The designer and founder of fashion atelier Cabochon spoke to Arab News about her personal style and the challenges she faced while making the transition to the studio.

“I’ve always loved anything to do with design and I’ve also always loved fashion, dressing myself up,” she said, explaining why she chose to test the waters of sartorial design while maintaining her day job as a senior health officer.

“A lot of people would always ask for my advice on how to style a certain look and my friends encouraged that, because I have natural flair — it’s not something I studied — I should pursue it.”

So, Al-Marzouqi hired a team of master cutters, tailors and hand embroiders and set up the brand Cabochon in 2016.

Named after a gemstone that has been shaped and polished as opposed to faceted, the label is known for its elegant evening gowns and fitted looks.

“It’s all about femininity. I love history, I love all aspects of design, traveling inspires me,” Al-Marzouqi said of her creative process.

However, inspiration and a knack for design will only take you so far in a notoriously competitive industry.

“If you have natural flair at designing or creating a look, there’s the other technical stuff that you’re not aware of like running a team of staff, the facts and figures — that was the challenging part,” the designer said, referring to the obstacles she has faced on her journey so far.

But she learnt the ropes and now oversees all aspects of research, design and production and is particularly keen to ensure the women she dresses have the “full Cabochon experience,” including “the attention, the care (and) the fit.

“I create and I design, but obviously every woman has a certain style so you respect the personality that comes in — her style, the shape of her body, her attitude, what she likes and, accordingly, you get inspired as a designer.”