The interview first starts with Mr. Meylan.

MF:  You are a Meylan a great name in the history of the Valle de Joux and in the history of horology. Can you tell us a little bit about your ancestors and family tradition in watchmaking?

GHM:  Meylan is a great name in the watchmaking history in the Valle de Joux, especially knowing that it is a Meylan that introduced this industry in the area. Several companies with the family’s name have existed but disappeared. My grandfather and my father were not in the industry but certainly some ancestors were involved.

MF:  You run one of the few family-owned watchmaking firms in Switzerland, and the only one still owned by descendants of the original founders. Does this impose a special responsibility upon both you and Audemars Piguet?

GHM:  Saying that Audemars Piguet is the last family company still in the hands of the descendants of the founders obliges us to follow some tradition, to manufacture in the Valley, to link our designs to the history of the AP product. To be able to say that is a strength.

MF:  I’ve heard people in the watch industry speak of the concept of “patrimony” an important word, but not one commonly used in the United States. Does Audemars Piguet serve as a guardian of the patrimony inherent in the heritage of Swiss watchmaking?

GHM:  Patrimony is very important. We should, by AP, always develop a new watch, a new model with the idea to add something to the watch history. We should also think to manufacture a watch that should have more value in the future, recognized by the collectors and aficionados.

MF:  Yet at the same time Audemars Piguet does not hesitate to experiment. Is innovation integral to this tradition?

GHM:  For the 125th anniversary, we said “125 years d’audace” (audacity). We must be innovative, always, in techniques, movements and mechanism, but also in design with some links to the past.

MF:  How has a smaller, family owned firm competed successfully in a market predominated by large conglomerates?

GHM:  Big is not always beautiful. Small can be also original, innovative, recognized by the connoisseurs and successful. But we have to fight and work hard.

MF:  Can you tell us something about the divestiture of the 40% interest in Jaeger-LeCoultre that was owned by Audemars Piguet? What was the thinking behind the sale? Does it make your company even more independent?

GHM:  We have taken the opportunity of the sale of LMH Group to sell our 40% in Jaeger-LeCoultre and reinforce the capability of investment of our holding company. This has given more possibility for our independence.

MF:  It seems Audemars Piguet is developing at rapid pace, with new movements, new complications, new model lines. Where do think that the industry is heading? Where do you perceive that Audemars Piguet will be positioned over the next several years?

GHM:  In the future, AP should be recognized as the watchmaker of the more innovative, especially in complicated movements, offering opportunities for the aficionados.

MF:  Thank you Mr. Meylan; I now would like to turn to Mr. Benhamias. Mr. Benhamias, could you tell us a little bit about how you became interested in watches?

FHB:  I have always been interested by the luxury industry in general, and my particular interest in watches started with Swatch watches that I collected for ten years from their start until 1992 – and which I finally sold back to Swatch. It was pure coincidence that I started to work for Audemars Piguet after several years in the fashion industry.

MF:  And before your current position, can you tell us about your background in the watch industry?

FHB:  I have always worked for Audemars Piguet; first I was responsible for France and Singapore, later I participated in reviving the marketplace in Germany, Spain and Italy, and finally to launch the AP brand in Australia.

MF:  You’re now President of Audemars Piguet of the Americas. What do your responsibilities entail?

FHB:  First of all, we had to boost a brand that was almost dead by reviving it, cleaning the distribution network and focusing on our relationship with the best potential partners. But my personal secret challenge is to make Audemars Piguet the number 1 in the U.S. where we are facing two main competitors, who are at the same level of high-end watchmaking but currently much stronger in terms of units and turnover.

MF:  Previously, Audemars Piguet used a distributor in the United States. What was it like to set up your own office?

FHB:  It was great to make a clean sweep of the past, to move to a new location, but it’s very difficult to get quality work in Manhattan, and it’s expensive. However, the result is more than satisfactory, and we get a lot of compliments from our visitors, who we encourage to come to the new office.

MF:  How do you perceive the United States as a market? Does LeBrassus share your views?

FHB:  My perception is very simple: everything is possible. The manufacture certainly shares my views, even if they sometimes are not as enthusiastic as I can be about the opportunities for business development in this country.

MF:  Audemars Piguet seems unique a family owned company in an age of large corporate conglomerates. Do you perceive this as a market opportunity?

FHB:  Definitely. The distribution system will change in the next five to ten years because the large groups will put more and more pressure on the retailers. As an independent brand, we can go our own way, and be a major player in creating a niche in the industry.

MF:  But how is it to compete against larger companies, with seemingly unlimited capital and extensive distribution systems?

FHB:  The bottom line of the business is: If at the end of the year you do not realize your expected turnover and do not sell X amount of pieces, you will not move forward, it is just the scale that changes. Even if we do not have the same power in terms of communication, spending always depends on the turnover you realize, and a bad strategy will quickly find its limits. Audemars Piguet is today at least as known as any renowned high-end watch brand.

MF:  Over the past few years, Audemars Piguet has launched an interesting advertising campaign, “Who is behind an Audemars Piguet watch?” and never showing the model’s face. Can you tell us a little bit about the campaign: how it evolved and its goals?

FHB:  Again, it’s simple: our clientele is as wealthy as any celebrity we could feature and they won’t buy a watch just because Mr. X wears it. It is much more interesting to make them meet each other, that’s why we never show the face: it could be anybody. This year, for legal reasons we are not allowed to use the tag line “Who is behind…” but we are working on a new campaign that will probably be available in September 2001.

MF:  Audemars Piguet seems to be a company on the move. It has produced some innovative new watches a very special perpetual Equation of Time, for one and the soon-to-debut world time perpetual, the Metropolis. Clearly, these represent real contributions to horology. Is this part of the strategy?

FHB:  Today, we want to reinforce our position as the absolute leader in the field of complicated watches; there is not one brand today in high-end horology that can show a collection of complicated watches that is as substantial as Audemars Piguet’s. This will be our main marketing tool this year since we have an exhibit of our complicated masterpieces traveling around the world. The aim of the AP team should be to write every year a new page of the company’s history.

MF:  Your company also has purchased, I’ve been told, some tooling from Jaeger-LeCoultre to allow Audemars Piguet to make some movements itself. Is this true? And also part of the strategy?

FHB:  No, we did not purchase them. Jaeger-LeCoultre made two calibers exclusively for Audemars Piguet. When Jaeger became part of the Vendome group, it was imperative for us to continue to purchase these calibers. Our subsidiary Audemars Piguet (Renaud & Papi) took this over to continue the exclusive production for us.

MF:  Audemars, with relatively little fanfare, has also introduced its own completely in-house “basic” movement, the Caliber 3090. Can you tell us a little about the decision behind that?

FHB:  Given the fact that all the brands today more or less resemble each other, it becomes more and more difficult to obtain supplies and components. To secure our independence we have to be able to produce our own movements. We already produce a hand-winding mechanical movement and will launch an automatic movement. We had exclusive calibers manufactured specifically for us before by sub-contractors.

MF:  I also hear that movement will have its own elaborations a power reserve version is being introduced this year. Will the Caliber 3090 serve as a foundation for a whole new line of movements?

FHB:  You are particularly well informed – do I make out a Swiss accent behind the American accent? But indeed, the development of this caliber will serve to develop the automatic movement and a complete family of calibers is in the works.

MF: Some models, like the Royal Oak, are true classics. But it seems that Audemars Piguet constantly is experimenting with the design. There’s new complications, new dial designs, strap variations even canvas now – as well as the classic bracelet. Even a new sized model. What is the marketing concept behind the Royal Oak in so many variations? Do you have a target market?

FHB:  The Royal Oak has been perceived by the establishment of the watchmaking industry as one, the sports watch par excellence. The Royal Oak Collection still represents 50% of our sales today, and we developed different products around the original design to satisfy the demand of a clientele that is truly passionate about this design. Besides, collectors who own several Royal Oaks are not unusual. In 2002 we will be celebrating the 30th Anniversary of the Royal Oak with a special surprise collectors will love.

MF:  At the same time, over the past few years, Audemars Piguet has introduced two other lines the classic round, usually complicated, Jules Audemars models and the rectangular Edward Piguet models. Can we expect more variations of these in complications, design alternatives, just like the Royal Oak?

FHB:  Absolutely. We will actually present some novelties for the SIHH show in Geneva. These model lines were already on the market but unknown, hidden by the Royal Oak. We already have some complications and now we put under the new model lines on the same level as the Royal Oak, under the AP umbrella.

MF:  Your company doesn’t hesitate to experiment. There’s the oval Millenary line, too, and the Canape models. Plus the women’s Promesse, Carnegie, and Charleston models. Other companies seem to have a few basic lines and try to achieve a “look” and brand identity. What does Audemars Piguet a renowned but small company– think about having many lines and models?

FHB:  Compared to the past when we had almost 20,000 references, our collection today is very clear and we have reduced it so that consumer can easily recognize the different lines. After a very beautiful sports line it made sense to win back market shares we lost in the field of classic models.

MF:  Audemars Piguet especially seems to emphasize complications. Its repeaters and sonnerie models are several, and some models like the new Dynamographe are especially innovative. There’s of course tourbillon models, perpetual calendars, an annual calendar and of course chronographs. Do you find the market particularly strong for special complications?

FHB:  In the past five years we witnessed an exceptional growth for the market of complicated watches especially in the U.S., where our clientele are true lovers, connoisseurs and aficionados of this kind of product. I am always amazed how many true connoisseurs, for instance, come from the computer business and thus appreciate a product that is at the opposite of what is their world. The big problem will be with After Sales Service as there are less and less qualified watchmakers and those very complicated watches require particularly thorough maintenance. These are pieces that sometimes take one year to be manufactured; they can not be repaired in two seconds, and the watchmakers able to execute these repairs are highly trained specialists.

MF:  Is the market changing? Where do you see it going?

FHB:  The grouping together of most watch brands into large conglomerates will definitely change the market in the coming years; it is not impossible that stores will then represent groups and not brands anymore. But a multi-brand retailer with ten to twelve brands instead of thirty or forty and with a real partnership relation to the manufacturers will always be viable. However, the U.S. market in terms of high-end watches has not reached its real development potential. There are ten million millionaires in the U.S. today, but the whole industry together sells not more than 100,000 high-end pieces per year in this country. We have to develop brand recognition, but most important we have to educate consumers and to open up the world of high-end horology.

MF:  One last question, if I may. I apologize if it’s personal, but it’s one that watch aficionados always ask one another. What watch are you wearing today?

FHB:  On the left wrist the Royal Oak Skeleton Perpetual Calendar No. 1, on the right wrist the Royal Oak chronograph in white gold No. 2 (I could not get the No. 1, worn by Giorgio Armani and auctioned off at Audemars Piguet’s Time To Give Event at Christie’s benefiting Arnold Schwarzenegger’s Inner City Games Foundation and the Muhammad Ali Center in Louisville.)