Watchmakers shift from street-level stores to exclusive spaces

Luxury watch brands that, traditionally, relied on prime-property boutiques on high-end streets to attract clients are ramping up the creation of private spaces away from street level.

Independent watchmaker Audemars Piguet has led this shift; it introduced its first lounge-style AP House in Hong Kong in 2018, and has since set up another 19 around the world. Earlier in the summer, two Richemont-owned stablemates, Vacheron Constantin and A Lange & Söhne, joined this movement by opening their own private clubs in London.

Club 1755, a 200 sq metre lounge and bar five floors above the Vacheron boutique on Old Bond Street, could be mistaken as one of the city’s newest private members’ clubs. However, the presence of a watchmaker in the corner indicates it is something a little different.

While Club 1755 is part of Vacheron Constantin’s retail footprint in the UK, those invited in will most likely be existing customers whom the brand seeks to convert to collectors. It is the fourth such space to open, with others in Dubai, Los Angeles and Shanghai.

The sell may be cashmere-soft, but according to UK brand director Charlotte Tanneur Teissier, it is paying dividends. “Club 1755 is a sanctuary especially crafted for Vacheron Constantin’s collectors and a community of like-minded individuals,” she says. “Since its opening, we have seen an immediate success, with increased sales of exclusive pieces north of six digits, including Métiers d’Art and Cabinotiers [unique] pieces.”

Meanwhile, in June, A Lange & Söhne opened its own off-street presence, a salon in the charming surroundings of Bourdon House, in Mayfair, also the location of the Richemont-owned Dunhill menswear flagship store.

Lange opened its first such space in Geneva in 2021. “We had a good solid database, but we couldn’t find the street location and we thought we’d give it a try and see how it worked,” says chief executive Wilhelm Schmid. “Since the Bond Street boutique that was operated by [retailer] Wempe shut, in London, we have a very small location at Harrods, but we have a lot of customers in London that don’t want to go to Harrods, who want to have privacy,” he says.

Privacy and safety were also very much front of mind when Lange opened a space in San Francisco in April this year. “We wanted good presentation, but we didn’t want street level, because to operate a boutique on the street in San Francisco nowadays is not without challenges and our customers simply said to us, ‘We prefer to have it more discreet’.”

Schmid listened and opened a 414 sq metre space above fellow Richemont brand Van Cleef & Arpels. “From a capital expenditure point of view, these showrooms are really as expensive as a street project, but, of course, the lease is a lot less expensive upstairs than on the ground floor.” As a concept it suits the more developed client who in Schmid’s experience “understands more about the brand and wants more privacy than is available in almost all boutiques.”

Besides privacy, this type of environment also helps brands understand their top-spending customers better. “We don’t need 35 or 40 stores around the world, we could probably sell at least half the production from one store in Geneva,” says Peter Harrison, chief executive of Richard Mille Emea. “But if you do that, you’re not engaging. You’re not cultivating clients. You’re not getting to understand who your customers are, unless you get to spend some time with them and see what their likes and dislikes are.”

To that end, last October, the independent watchmaker opened Richard Mille St Martin, a 700 sq m site in Singapore. That the location was formerly a restaurant indicates that hospitality is as central to the concept as horology, and features a spacious library, sports bar, and patio. The brand has since identified a location in Dallas where it wants to open a similar operation.

But Harrison is at pains to stress that this hospitality-enriched retail model is not a replacement for traditional boutiques which benefit from huge footfall during certain times of the year. He believes landmark stores are crucial to the success of what is still a relatively new brand in a very long-established industry. “We still need to be in the right places to meet the right clients.”

“We’ve got an average price of just over SFr300,000. So, when someone comes in to buy a couple of watches, it’s a significant outlay, and you can’t be serving them from a kiosk.”

The highest profile player in off-street club retail remains Audemars Piguet. For chief executive Ilaria Resta, AP Houses are more expensive than boutiques in terms of cost, as they are typically much larger. “We do not to enter into the logic of productivity per square metre, which normally informs any retail choice.” Instead, she talks of different criteria, such as whether there is room for a piano — music is central to AP’s marketing — or enough space for a kitchen where popular local chefs can cook client dinners.

“l never look at the logic of retail when I look at the houses,” she says. “If we wanted to optimise the capital expenditure investment, then of course we would use one key architect doing all the houses in similar ways. Instead, each house is done by a different architect with different taste. Each project has its own identity and that is what I love about the houses.”

We do not enter into the logic of productivity per square metre, which normally informs any retail choice

The majority of transactions still take place in boutiques, but Resta believes that “the depth of knowledge and understanding of watchmaking at AP Houses — and the privacy of the setting — allows for sale of the more complicated pieces”. She says that typically AP House sales start at around SFr100,000 and can include sonneries and grand complications watches. “There are definitely more high-end pieces purchased in a House.”

All of which is good news for Brian Duffy, chief executive of Watches of Switzerland. In 2018, AP started pulling out of all multibrand retailers in order to focus on its own stores, but WoS is partnering with the brand in the latest AP House in Manchester. “It is a joint venture — we each own a considerable percentage,” says Duffy of the project that is expected to be completed in March next year. AP has the larger share of this project, and while Duffy declines to reveal the exact percentages, he says that WoS has “what you could call a marginal minority”.

He is very optimistic about this, not least because “AP has no distribution outside London”. More important, he believes, it offers “a very reliable return on investment, because of the nature of the demand for the product. AP remains super hot. Everything is on allocation or registry of interest, so it is a very easy business to predict.”