We caught up with Jonathan King who was recently appointed to Audemars Piguet Singapore as Chief Executive Officer for Southeast Asia, including India and Australia, effective August 1st 2017. Jonathan is no stranger to Singapore, having cut his teeth at IWC in 2002 where the he and our Chief Editor became good friends, sharing the love of watches, the industry and also for bicycles. It was an interesting discussion to plot his plans for AP for the next few years, and get a glimpse of his deep insights into the industry.
Brief Bio: Jonathan King
Jonathan was born in London, but his career has seen him live in various parts of the world, including Boston, New York, the Caribbean, Kenya, Hong Kong and, more recently, Tokyo. As mentioned, he has spent two stints in Singapore, first in the hospitality industry then in 2002 at IWC with Richemont. He also spent some time in retail at Valiram before returning to Richemont to run Van Cleef & Arpels. He was then approached by Audemars Piguet as Chief Executive of Japan and Korea, a challenge which he took in his stride, and grew the business in an aggressive and challenging environment. He returns to Singapore to head Audemars Piguet’s South East Asian operations recently.
“I’m thrilled to be back in Singapore, one of Audemars Piguet’s leading markets, heading an
excellent team of committed professionals. The Southeast Asia scene is fast-paced and
sophisticated, and it brings me much excitement being in this dynamic part of Asia once again.”
We began our discussion with questions we have been gathering from readers. Jonathan was open and candid throughout the discussion and here we bring you the essence.
Key Focus areas for the region
Audemars Piguet now have the capability to produce some 40,000 watches a year, and the entire capacity is fully taken up. This is based on current structure and will remain so for the foreseeable future. Jonathan’s current strategy, in line with HQ management is to continue to evaluate the business model to develop a better and stronger replenishment capability.
The idea is to only make as many as the market will bear, and to distribute these to where the demand is. While the idea is commendable, it is not easy to execute. Failures will show up as pent up demand in some geographies, with over supply in others. A situation which often leads to the grey market flourishing. We do find it heartening that Audemars Piguet is aware of this, and taking bold steps to optimize it. One of the strategies which Jonathan outlined, which we agree will be effective, is to regulate production and focus on fewer point of sales.
Audemars Piguet has managed to continue to be successful in the haute horology scene by continuing to monitor the demands, and as a family owned business is able to take tough decisions to pull back production, mop up excess inventory from the market to keep demand high. In the most recent few years, where global demand for luxury watches have weaned and caused many brands to suffer flat or even negative growth, Jonathan was pleased to report that Audemars Piguet consolidate and grow. The Japan market, where he was in charge of immediately prior to Singapore is a prime example.
Royal Oak and Royal Oak Offshore: One trick pony?
The markets are strong across the globe, roughly 1/3 contribution from Asia, EMEA and North America, such that Audemars Piguet is not overly exposed in any one market. But what about over-exposure to one model family?
We then addressed the elephant in the room. For long, many industry critics have accused AP of being a one trick pony – being overly strong in the Royal Oak family at the expense of the other more classical horology families viz Edward Piguet, Jules Audemars and Millenary. Jonathan nodded, perhaps in agreement, and let a smile slip through his eyes, and remarked, “We may have an old pony, but wouldn’t many other brands love to have one as well?”. We laughed out loud, and heartily agreed.
He further offered that while they are aware that it may be that AP is taking advantage of the fame and the reputation of the Royal Oak family, they continue to monitor some of the other collections. The Edward Piguet family is being phased out, while the Jules Audemars is being evolved into something new and different. Watch this space for developments in the near future.
And Jonathan also stated that the Millenary ladies is a standout collection on its own right. The collection is showing strong sales across the world, with good support in the region. Perhaps the uniqueness of the elongated case affords artistic interpretations which offers some additional aesthetic options to the feminine collector markets.
And with a twinkle of his eye, Jonathan stretches out his arm, rolls back his sleeve and shows me the Millenary 4104 he was wearing. A magnificent example of the AP’s ability to think out of the box. The movement of the caliber 4104 is reversed, to allow the back of the movement to be displayed on the dial side, and admired.
Jonathan further stresses that their ladies line is successful because AP does not make ladies watches by merely reducing the size and perhaps adding jewels on an existing men’s model. The Ladies Collection are designed with the aim of a pleasing feminine line in mind, and often bear interesting movements with complications. AP have also not shied away from the high jewelery pieces, some of which have been very successful.
The after sales question
For collectors, the question of maintenance should have come up more often as part of the total cost of ownership model, but it doesn’t. This is an often overlooked part of the collecting life, and it is strange since the watches we are talking about are mechanical devices like the automobile. And when purchasing a new car, one almost always figures in the total cost of ownership, including maintenance cost and over other consumable costs and depreciation. Curiously, most watch collectors do not use this reasoning when buying watches. And often times, when the watch requires service (when does it need service? See our Ask Deployant Anything Episode 1 article for some suggestions), they balk at the cost and complain about the length of time needed.
Audemars Piguet directly addresses this by highlighting it as a priority in their strategy. Each major office is equipped with an After Sales department. In the region, Singapore, Tokyo and Hong Kong have large Service Centres. While in Taiwan and Kuala Lumpur, the operation is smaller. Partners deliver the After-Sales for other markets in the region like in Philippines, India, Indonesia, Thailand and South Korea. Each office is ranked according to capacity and technical ability. Major offices are able to undertake more work and also more complicated watches.
In Singapore, where we visited, there were 6 watchmakers who were responsible for repair and maintenance work for all watches up to perpetual calendars. In the Audemars Piguet hierarchy, chronographs are considered as less complicated than perpetual calendars, so those are serviced in-country as well.
When a watch comes in for service, it is evaluated, analysed and an estimate on the cost and time required is given to the customer. If the customer agrees with these estimates, the watch is then accepted for service. The process replicates the construction of the watch: complete disassembly, repair and complete rebuilding and testing of each piece. Watches which are more complicated than what is designated to the Service Centre are packed and sent back to Le Brassus to be worked on by the experts there. Understandably, this process will take longer and be more expensive than if the work was done locally. Nonetheless, the Audemars Piguet Service Centre in Singapore is looking to develop its capabilities to be able to accommodate and repair complications such as tourbillons and minute repeaters locally.
Key Performance Indicators for the team are measured in multiple metrics. While the metrics are commercial and confidential, Jonathan did let it slip that service speed is a critical measurement. The entire process is very data driven, and Jonathan personally reviews the numbers on a regular basis. And steps taken to address numbers which are out of line.
In addition to the Service Centre, Audemars Piguet ‘s commitment to training and continuing education extends to a Training Centre in the Singapore premises. The Training Centre operates under a Regional Customer Service Training Manger – Michael Dubs, a master watchmaker who is qualified to work on all AP watches. The centre is responsible for training full time student watchmakers as well as conduct refresher courses or new caliber technical training for watchmakers who are already qualified and practicing in the region. Every watchmaker who works for Audemars Piguet goes through training at least once every 3 years, which includes recertification, refresher, and further training for higher level.
It seems to be a well rounded discussion with Jonathan King. He was forthright and candid in his description of the strengths and weaknesses within his organization, and what he is doing to improve them. We have a good feel that AP is headed for good times, especially in this region, with Jonathan at the helm.
I stopped buying watches because of the prohibited maintence costs…