Patek Philippe is not that expensive: Thierry Stern
Creativity and innovation are both more important than adding more zeros to its profit margins, says the head of globally loved watchmaking brand
JUST how well is Patek Philippe doing? Well enough for its president Thierry Stern to pay attention to the company’s product line than keep watch on its bottom line.
“The financial side is boring,” he declared in an interview during a visit to Manila last month. “The ability to create and design watches – this is what I really prefer.”
To say Stern is hands-on when it comes to making watches might be a bit of an understatement – after all, every minute repeater that Patek produces is personally quality-checked and signed off by him before it goes to the customer.
He commented that his management style is a mix between that of his father Philippe and grandfather Henri who ran the company before him – the latter paid more attention to the artistic side and was behind the birth of the Golden Ellipse collection; while the former grew the company financially to where it is today.
Stern’s personal belief is if Patek can continue to keep creating beautiful watches, the company has nothing to worry about.
To that end, there is no denying the brand has been doing a great job and the proof is in the pudding: Patek cannot produce enough watches – and we’re not just talking about its highly sought-after Nautilus – to meet the current demand.
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While the shelves of its boutiques may be full, most are for exhibition only and acquiring one would entail putting your name on a waitlist that, depending on model, is likely to be years before you get the call to come make the purchase.
Stern is aware of the issue but remains adamant that Patek will not just increase production overnight to satisfy everybody.
Neither will he increase prices just because he knows there is demand.
Citing the example of the new Nautilus Ref 5811 in white gold, which was unveiled about a week ago and retails for S$92,000 in Singapore, he said, “I could have easily sold it at CHF120,000 (S$170,000) and people would still buy it, but I’m not willing to play that game ... Maybe I’m wrong, I don’t know, but at least I can look at myself in the mirror every morning and say I’m proud of what I’m doing.”
On the brand’s pricing strategy, he added: “I think people respect us because they know we price our watches correctly. If our clients study our prices and compare it to other brands’ with the same types of movements, there is a big difference, and Patek Philippe is (actually) not that expensive.”
And while the Swiss luxury watch industry is enjoying a record year, Stern is mindful that the good times don’t necessarily last forever.
He cited the rising cost of energy as a threat to the business: “We do have a lot of machines, a lot of lights, a lot of big factories.”
Stern also warned: “When the business is doing well, fine, you can sell what you have ... but when it goes down, it goes very quickly – you can lose 50 per cent in less than a month – so that’s why you need to innovate and stay creative.”
He hinted that a new collection is the works (“It’s quite a cool one!”) and could be unveiled in “one or two years’ time”.
And Stern’s parting shot? “There isn’t one day where I don’t have an idea!”
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