Audemars Piguet CEO says luxury watch demand shows no sign of fading

The luxury watch market is well-positioned to avoid a crash as tight supply and a new generation of young collectors drive demand, according to the CEO of Audemars Piguet.

Luxury watch prices on the secondary market fell 8% last year, with some top models falling more than 20% from their peak, according to WatchCharts. Experts have been warning that the watch bubble could burst, along with crypto, NFTs and other trendy post-pandemic booms. Yet in the past two months, prices have begun to stabilize on the back of what some see as lasting, strong demand.

“I don’t see prices going much lower,” said Francois-Henry Bennahmias, CEO of Audemars Piguet — one of the so-called Big Three of the luxury watch world along with Rolex and Patek Philippe. “People still want to reward themselves, and when they want to reward themselves, they will look at the most respected companies, in watches, jewelry, fashion, you name it.”

Bennahmias said the luxury watch market is benefitting from a vast and structural shift to younger buyers. During the pandemic, a flood of millennials and Gen Z consumers poured into the collectible watch world, educating themselves online and coveting rare watches worn by sports stars and celebrities on social media.

With the top watchmakers built on the promise of limited production, supply can’t keep pace with demand.

“The quantities from the watch companies didn’t evolve,” Bennahmias said. “And the demand became crazy, because we saw the arrival of young people that just were more and more interested in watches. And some people with money who were not even looking at watches before found out that building a watch collection could be something interesting.”

Bennahmias said unlike the fickle meme-stock investors of 2021, today’s young watch collectors are here to stay. The average age of an Audemars customer is now 10 or 12 years younger, he said, than in the company’s recent history. Despite living most of their life online and immersed in digital products, Gen Z and millennials have developed a particular attraction to highly crafted, mechanical watches.

“When the Apple Watch came out in 2014, everyone was telling us that we will actually die,” Bennahmias said. “They said no young person would ever wear a watch again, if they did it would be a smartwatch. The funny thing is, we thought that young people couldn’t appreciate exclusivity, craftsmanship, watchmaking. They did.”

Bennahmias said younger generations are becoming some of the brand’s top ambassadors.

“They are the ones preaching the choir with social media and everything. They are our best advertising campaign, and they are bringing their parents actually to the brand,” he said.

The big challenge for watchmakers is the secondary market, where pre-owned watches can sell on any of the dozens of online watch sites.

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