Did a Chaotic Drop Damage Swatch’s Audemars Piguet Collaboration?

The scenes of mobs rushing Swatch stores on Saturday for the release of the $400 Royal Pop timepieces were surely avoidable, critics said on Monday, as prices for the Audemars Piguet collaboration soared on secondhand platforms.

“Swatch stampedes” — as the UK’s Daily Mail newspaper reported — and viral clips of riot police dispersing unruly crowds from shuttered stores were likely not what Audemars Piguet had in mind when it agreed to lend the profile of its exclusive Royal Oak 1970s stainless steel sports watch design to Swatch.

Critics were quick to highlight the damage.

“The drop was a terrible mistake due to a lack of proper logistics in terms of security,” said Oliver Müller of LuxeConsult. “It was a good idea with a bad execution.”

Audemars Piguet stressed the importance of safety in a statement on Monday.

“Although retail operations are being handled by Swatch and their local teams, we are following the situation closely together and safety remains the priority for everyone involved in these activations,” the high-end Swiss watchmaker said. Extremely high demand for the new products prompted “adjustments or delays” from Swatch to manage crowds as “safely and responsibly as possible,” it also said. Swatch did not respond to a request for comment.

Saturday’s events brought to mind the launch of Swatch’s tie-up with Omega for the MoonSwatch four years ago, raising the question of why Swatch — which is managing all RoyalPop sales — seemed unprepared.

Consumers were left irate. Some had begun lining up in front of Swatch stores as early as last Tuesday, when details of the collaboration were first publicised — but were sent home empty-handed. Social media was flooded with footage of angry fans accusing Swatch of misleading shoppers, racking up views as unconfirmed rumours circulated that the company had sent as few as 50 pieces to each of its stores. People suggested the company issue ticket numbers for stocks, on a first-come, first-served basis.

On Saturday evening, Swatch posted a short statement on social media urging its “dear fans … not to rush to our stores in large numbers to acquire this product.”

So far, however, it appears the chaos had done little to dampen interest in Royal Pop. Analysts are sticking to forecasts of commercial success.

“I expect this collaboration to be materially profitable for Swatch Group,” said Bernstein analyst Luca Solca. The analyst estimates Swatch will sell between 500,000 and 1 million pieces for a bottom-line contribution of around 150 million – 200 million Swiss francs ($191 million – 255 million).

Resale values of the poppy pendant watch are already exploding. By 10 a.m. Eastern time on Monday, StockX had recorded 1,300 Royal Pop sales totalling $1.8 million, with watches selling at an average of $1,031, well above the $420 retail price. They had also sold 11 sets of the full eight-piece collection, averaging $11,570, compared to the original retail price of $3,240.

The high prices might not last. “The secondary market goes nuts for a few months until the real demand — the people wanting to wear the watch — is satisfied by the supply,” said Müller.

According to StockX, the weekly price of the MoonSwatch never fell below the retail price.

For Audemars Piguet, which plans to donate any proceeds from the collaboration, the question is how the events of the weekend might affect brand image.

Müller sees risk for both brands.

“AP is in it for the long term of its brand equity, Swatch is looking for additional business and increased brand awareness,” said Müller. “Here, the two brands have lost the bet so far by getting a social media backlash, which might hurt the two brands, and especially AP.”