ZURICH (Reuters) - Watch brands Audemars Piguet and Richard Mille will withdraw from the Richemont-dominated (S:CFR) Geneva watch fair from 2020 to focus on selling directly to consumers rather than via third-party retailers they would meet at the show.
Latecomers to the digital space, Swiss luxury watch brands have now realized that e-commerce and social networks are formidable tools to get a tighter grip on distribution and customer relationships, while cutting out wholesalers also helps to keep a lid on the grey market.
Audemars Piguet, an independent brand with about $1 billion in sales, is changing its business model to place its customers at the heart of its commercial strategy and "establish direct and personal relationships with watch lovers around the world", it said in a statement published late on Wednesday.
Its chief executive told Reuters this month that the brand wanted to take all its sales in-house within three to five years.
Richard Mille, known for its ultra-expensive, sporty timepieces relying on Audemars Piguet technology, said it preferred dedicated mono-brand boutiques to multibrand retailers.
"Consequently, the brand's presence at exhibitions no longer corresponds to its strategy for exclusive and selective distribution," the company said in a statement.
Both brands will be present for the last time at the next Geneva fair in January, they said.
The announcements deal another blow to third-party retailers and the two big industry shows designed for them - the SIHH (Salon International de Haute Horlogerie) in Geneva, which takes place in January, and Baselworld, held in Basel in March.
The number of exhibitors at the Basel fair halved this year and it recently lost one of its most important pillars when Swatch Group (S:UHR) dropped out.
The SIHH had been seen as benefiting from Baselworld's troubles, with brands such as Hermes (PA:HRMS) moving from Basel to Geneva, but the latest news shows it is not immune to the increasing focus on digital channels.
Watch retailers are trying to adjust to the changing environment, with bigger players such as Bucherer or The Watches of Switzerland expanding internationally and pushing online and pre-owned activities, while smaller rivals try to find a niche to survive.