Patek price increase and store closures

[dannyp]

Originally Posted by dauster

I think also morretti in San Antonio and one AD in socal lost Patek


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Pretty sure the owner retired and closed the store, so not sure that counts. Thread on Rolex section about that not long ago.

Originally Posted by np2016

Hopefully Patek doesn't go the boutique only route like AP did. I'm in Ohio and we don't have any AP boutiques in the state so getting an in demand AP timepiece is near 0%. Chicago is the closest AP boutique to me and I am not driving that far for a meet and greet with nothing to buy and compete against all the locals in that area.

If it's any consolation, the Chicago boutique is one of a handful of non-company-owned boutiques and is located within a great independent multi-brand watch store. No actual experience, but very impressive list for an independent, so worth the drive if you also like looking at the rest of the collections they have (Laurent Ferrier, Parmigiani Fleurier, Zenith, Breguet and a handful of others).

As an aside, AP may be moving in the boutique direction, but they aren't giving up the AD network as some of those boutiques are operated by independent/chain dealers.

[crispyness87]

Originally Posted by rolexandlange

I see so many hot AP's flipped for immediate profit. It is as if their control of the distribution process has actually made the right watches reaching the right people even less likely. 15202s and 16202s go to the best customers, and the best customers are flippers, which is sad for the brand that they actually don't know who their real customers are.

While there are flippers that slip through, your statement is probably extremely far from the truth. Where I’m from, I’ve seen AP viciously blacklist customers that sell their watches, even those who did so 1) unknowingly (of the repercussions) 2) without any profit and 3) are extremely rich.

I’ll extend an olive branch though. I’d say the boutique model (much like democracy) is the worst form of distribution – except for all the others that have been tried

[dysert]

Originally Posted by newonos

My .02, based on intuition and anecdote:
PP is trying to streamline its distribution chain. That's clear with the closures and pickups in US. Its less expensive to deal with one buyer across an entire region, than ten. The brand is too large for PP captive salon/boutique only model. That's WAY more work and expense... PP wants to focus on making good watches and branding.
So who's vulnerable? Small guys who share a market with bigger guys. I notice Ben Bridge is ubiquitous... but only has one PP location (HI)... And Tiffany in HI is no longer PP... My bet is BB will pick up locations, perhaps PDX (no PP there now) and SEA (small guy).

Always thought PP dropping Betteridge in Vail a curious occurrence... cant explain that one other than perhaps the Vail folks were difficult.

Betterdige is now owned by Watches of Switzerland. The Patek franchise was moved to Aspen from Vail is my understanding.

[srvrf]

Originally Posted by dannyp

Pretty sure the owner retired and closed the store, so not sure that counts. Thread on Rolex section about that not long ago.



If it's any consolation, the Chicago boutique is one of a handful of non-company-owned boutiques and is located within a great independent multi-brand watch store. No actual experience, but very impressive list for an independent, so worth the drive if you also like looking at the rest of the collections they have (Laurent Ferrier, Parmigiani Fleurier, Zenith, Breguet and a handful of others).

As an aside, AP may be moving in the boutique direction, but they aren't giving up the AD network as some of those boutiques are operated by independent/chain dealers.

I've been there many times and they're great. Their non-AP selection is impressive and their AP "boutique" is in the back of the store.

[Mini2]

Originally Posted by Mini2

Apparently 100 stores will be gone in the next 12 months

WatchPro has been hearing from retailers and their customers when Patek Philippe has pulled out of stores, but the extent of the consolidation had not been confirmed until the brand responded to an inquiry today.

“We confirm that Patek Philippe SA is currently working on a global restructuring of its retail distribution network which will eventually result in a reduction of about 30%,” WatchPro has been told.


Looks like I was right

[jamestucker]

Wempe London is closed

[Ubiquitous1984]

Originally Posted by jamestucker

Wempe London is closed

Interesting statement issued by them giving context for the decision, from a cache version of their website:

“After having been represented in London for more than 25 years, we will close our showroom on New Bond Street on 10 March 2023. We would like to sincerely thank you for your confidence and the many wonderful encounters we had during the past years.

Although it has been the philosophy of the company Wempe to always select the top locations in each city for its showrooms, the constantly increasing presence of brand boutiques, especially those for watches, on New Bond Street has led us to decide that there is no promising future for the continued operation of a multi-brand store for fine watch brands and exquisite jewellery at the present address.

The time in Mayfair is an important chapter in our company history, and we will remain attached to London as well in the future. The A. Lange & Söhne Boutique that Wempe operates on Old Bond Street is not affected by the closure.

Furthermore, our service offers and warranty services will of course continue to be at your disposal for all watches you have purchased at Wempe and for all your Wempe jewellery items. You can reach Lynn Schroeder by e-mail at the address london@wempe.com until the end of June.”

[codecow]

This is an outrage!

[ragsk]

Originally Posted by Ubiquitous1984

Interesting statement issued by them giving context for the decision, from a cache version of their website:

“After having been represented in London for more than 25 years, we will close our showroom on New Bond Street on 10 March 2023. We would like to sincerely thank you for your confidence and the many wonderful encounters we had during the past years.

Although it has been the philosophy of the company Wempe to always select the top locations in each city for its showrooms, the constantly increasing presence of brand boutiques, especially those for watches, on New Bond Street has led us to decide that there is no promising future for the continued operation of a multi-brand store for fine watch brands and exquisite jewellery at the present address.

The time in Mayfair is an important chapter in our company history, and we will remain attached to London as well in the future. The A. Lange & Söhne Boutique that Wempe operates on Old Bond Street is not affected by the closure.

Furthermore, our service offers and warranty services will of course continue to be at your disposal for all watches you have purchased at Wempe and for all your Wempe jewellery items. You can reach Lynn Schroeder by e-mail at the address london@wempe.com until the end of June.”

They lost Rolex in mid 2022 and then Patek shortly thereafter. There is a big WOS Rolex boutique opening close by and the Patek Salon is less than a minutes walk away on the same street. Their closing statement is spot on. Sad to see them go.

[llngoc]

Originally Posted by Mini2

WatchPro has been hearing from retailers and their customers when Patek Philippe has pulled out of stores, but the extent of the consolidation had not been confirmed until the brand responded to an inquiry today.

“We confirm that Patek Philippe SA is currently working on a global restructuring of its retail distribution network which will eventually result in a reduction of about 30%,” WatchPro has been told.


Looks like I was right

I read the WatchPro article and the article feels like it was written in 2022 and just being re-posted now. As all the numbers quoted is from 2022 data. Or is it really referring to upcoming 2023 closures?

[dauster]

I really like what horology ancienne said about it:



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[Ichiran]

Say I'm an AD who is not affected by dealership termination, potentially there will be more customers coming my way from other locations where dealerships have been cut. However, I will still prioritize my existing customers who have bought from me for years/decades. Relationships for such business will take a long time to build again, and it's difficult for Patek to dictate how AD take care of their own customers.

[Daytonaman799]

Originally Posted by dauster

I really like what horology ancienne said about it:



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That is dead on the money.

[HMHM]

I think it’s a sad situation for customers who lost their AD. It’s really an unpredictable situation that could happen to any of us here. At the same time I think horology_ancienne is perhaps a little too naive in thinking that another AD will look after the abandoned customers of anther AD who lost their status. Ultimately, money talks and the truth is the customers who lost their AD are likely to be VIP as well, and they will be going for the same few watches like 5990/1R, 5740/1G. With most ADs only receiving 1-2 pieces of these each year, how are they going to allocate them to new customers without disappointing their present crop of VIP?

The only way this can be solved is if Patek decide to go with a fully corporate owned boutique model. But it’s like it will be one country, one salon and the competition will be massively intense as well. The Patek Salon in London is just brutal when it comes to allocation, especially when there are so many affluent people in London who can afford to buy everything just to get allocated a piece.

[dauster]

Originally Posted by HMHM

I think it’s a sad situation for customers who lost their AD. It’s really an unpredictable situation that could happen to any of us here. At the same time I think horology_ancienne is perhaps a little too naive in thinking that another AD will look after the abandoned customers of anther AD who lost their status. Ultimately, money talks and the truth is the customers who lost their AD are likely to be VIP as well, and they will be going for the same few watches like 5990/1R, 5740/1G. With most ADs only receiving 1-2 pieces of these each year, how are they going to allocate them to new customers without disappointing their present crop of VIP?

The only way this can be solved is if Patek decide to go with a fully corporate owned boutique model. But it’s like it will be one country, one salon and the competition will be massively intense as well. The Patek Salon in London is just brutal when it comes to allocation, especially when there are so many affluent people in London who can afford to buy everything just to get allocated a piece.

Yeah somewhat true but Sam from HA specifically mentioned the distributor such as HSWA for the US to take over distribution for customers who lost their ADs.

I think that takes a lot of work but could ultimately work. In reality, Patek will keep stating that they can’t do anything and won’t do anything since it would require work and also cut into the independence of the remaining ADs. I really like it but we all know the (watch) world doesn’t work that way.


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[llngoc]

This seems to be the trend seeing AP, VC, Lange, etc are all moving to boutique model. At least once you build a relationship with a boutique, the relationship is somewhat "portable". Maybe if Patek can move to a corporate boutique (not local jeweler own) model, it will help in the long term.

[VogelPhoenix]

Originally Posted by rolexandlange

I see so many hot AP's flipped for immediate profit. It is as if their control of the distribution process has actually made the right watches reaching the right people even less likely. 15202s and 16202s go to the best customers, and the best customers are flippers, which is sad for the brand that they actually don't know who their real customers are.

As many 2022 5712s on C24 as 16202s. Some customers/SAs/stores will always succumb to the temptation, in particular when a fraction of watches is allocated to new clients, as AP does. Not sure what your evidence for flipping by the "best customers" is.

[mickyd329]

Originally Posted by HMHM

I think it’s a sad situation for customers who lost their AD. It’s really an unpredictable situation that could happen to any of us here. At the same time I think horology_ancienne is perhaps a little too naive in thinking that another AD will look after the abandoned customers of anther AD who lost their status. Ultimately, money talks and the truth is the customers who lost their AD are likely to be VIP as well, and they will be going for the same few watches like 5990/1R, 5740/1G. With most ADs only receiving 1-2 pieces of these each year, how are they going to allocate them to new customers without disappointing their present crop of VIP?

The only way this can be solved is if Patek decide to go with a fully corporate owned boutique model. But it’s like it will be one country, one salon and the competition will be massively intense as well. The Patek Salon in London is just brutal when it comes to allocation, especially when there are so many affluent people in London who can afford to buy everything just to get allocated a piece.

Originally Posted by dauster

Yeah somewhat true but Sam from HA specifically mentioned the distributor such as HSWA for the US to take over distribution for customers who lost their ADs.

I think that takes a lot of work but could ultimately work. In reality, Patek will keep stating that they can’t do anything and won’t do anything since it would require work and also cut into the independence of the remaining ADs. I really like it but we all know the (watch) world doesn’t work that way.


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Originally Posted by llngoc

This seems to be the trend seeing AP, VC, Lange, etc are all moving to boutique model. At least once you build a relationship with a boutique, the relationship is somewhat "portable". Maybe if Patek can move to a corporate boutique (not local jeweler own) model, it will help in the long term.

It's the debate between a franchise system versus a direct to consumer model I guess. Both has it's pluses and minuses in my mind. I do however prefer the direct to consumer model in this case though. AP and PP need new clients, but need to make sure they take care of their current client base as well. It's a tight rope to walk for sure.

Yanking AD's doesn't help that cause as it's hard to regulate from a manufacturer or distributor mode in taking care of current clients. It's a loss for the brand and the client if they get left in the cold due to their AD losing the franchise.

The boutique model is great as you can build a relationship with the brand itself instead of an AD, but it has it's cons as well. More locations are needed to service the various markets. The existing clients who have been buying from AD's prior need to have some leverage when starting a boutique relationship. As it sits today, it doesn't add enough value as it should.

[John Doyle]

I think it is great that the existing customers don't get preference, it will allow new customers to get access to pieces faster. Long term customers probably have the means to go grey anyway.

[ChetBaker]

Right. It immediately takes care of the silly "relationship-building" concept that makes people buy stuff they don't really want. No one will be doing that if there's not a big carrot dangling before their eyes.

[w220]

It can make it very difficult for old customers when your AD closes or loses their license. My old trusty AD in Boston closed a few years ago (the whole location closed due to Covid), and the one remaining AD in Boston is really bad, easily the worst AD in the US, possibly in the world. You will not find a more arrogant AD anywhere. So for me, I’m effectively without any AD, and my only option if I want to shop somewhat locally would be a grey dealer. It’s a very unfortunate situation.

[Vasco]

Not cool to be in the position of an old client whose historical data has been reset to 0 and also for the retailer that had been loyal prior the 2010's era when watches weren't seeling well.

This being said, it isn't nice for an AD to loose a brand but if a new retailer wants to settle in the same region and brings a boutique in the same street, I guess it's just normal. The boutique offering the best service will thrive better than the other one (all things being equal).

It's tough for Patek to have the exact list of the clients from the closing retailer. I guess the closing AD won't be inclined to communicate a client list that will be sent to the competitors that made him close its business. And they may not give the list in the first place to Patek who kicked them out of the network either. I imagine it's a massive work to be able to rate each client, if they are loyal or just short term buyers because of the hype, as they didn't have the direct contact with them. Only the AD's SA knows the clients profiles. Nearly impossible to do, except for maybe a very few.

The new AD has customers too (as Ichiran said), older faithfull ones, and I don't think they will just put inside their waiting list all the new clients coming from the closing ADs. An exception would certainly be a wealthy one, engaged rapidely in buying a few watches.

About fidelity, yes a client from a closing outlet could ask for a minimum from Patek. However, many clients are just on Patek for the investment, the value those watches keep (even for those liking watches, I don't talk about investment diversification for people who don't care about watches). If tomorrow, the brand wasn't as successful or keeping value, the clients wouldn't be loyal either and kick Patek out of their purchases.

Some ADs play the "bundle" game and that's not cool. But this comes from the fact that, in general during an offer shortage period, a retailer favors a customer who has bought several pieces, especially when some where acquired before the hype, when watches discounted, even after a long while. I'm not one of them and I think they should be served before me.
However, there should still be a minor part of the watches for new customers because, when downturns come, while satisfied clients may step away, badly handled ones may even more. From a discussion with an SA, they are aware of that.

[ts3]

Originally Posted by Ichiran

Say I'm an AD who is not affected by dealership termination, potentially there will be more customers coming my way from other locations where dealerships have been cut. However, I will still prioritize my existing customers who have bought from me for years/decades. Relationships for such business will take a long time to build again, and it's difficult for Patek to dictate how AD take care of their own customers.

The Wempe near my small-town AD lost Patek some years ago at a time when many references didn't sell "themselves" (especially some of the high end pieces). In my perception it got so much harder to get anything at that point. It may have been coincidental, but my feeling is that my AD happily took on Wempe's VIPs and moved smaller existing customers to the end of the line. Money talks and why not add some deep pockets if the opportunity arises.

[HMHM]

Originally Posted by ts3

The Wempe near my small-town AD lost Patek some years ago at a time when many references didn't sell "themselves" (especially some of the high end pieces). In my perception it got so much harder to get anything at that point. It may have been coincidental, but my feeling is that my AD happily took on Wempe's VIPs and moved smaller existing customers to the end of the line. Money talks and why not add some deep pockets if the opportunity arises.

Money talks” I think that is the most true statement in the current collecting climate. I think new clients who are passionate about the brand, who are enthusiastic, will have no qualms about buying more pieces from Patek. In that case, they can always start from 6119, 5226 etc and build their way upwards with the new AD. The problem is that some clients want to go straight to the top when they move to another AD. One example is Patekaholic. Kelly left Patek Tiffany NY. He has not bought much from Patek Kuwait but still wanting the 5990/1R. What is the AD going to do about it? Ignore their long time clients and show favouritism towards JZ?

One of the post above noted the involvement of HSWA. That’s essentially getting cooperate involvement ala boutique style. Too much of that and AD will feel undermined. My biggest issue (personal) with the boutique model is that the way the brands establish their boutique, it will always be at the biggest cities with the most affluent of people. Patek Salon London, Paris, Geneva. AP House London etc. Imagine asking for a 5990/1R against people like Ichiran and Russel996 who have massive purchase history. Now multiple that by 100x or so and that’s the number of people who are that affluent in London. It’s just impossible. Smaller boutique scattered around means regional waitlist, less people waiting for the same model and it’s easier to obtain one.

The reality is that money talks. We can beat all the bushes we want on here, but no AD is going to allow someone to walk in, get whatever they want without a decent spend. Loyalty is a two way street. Spend and get the reward in return.

[WatchEater666]

Consumer brands, in multiple spaces, are moving away from allowing their most desirable inventory to sit with non-value add retailers.

Retailers add little to no value, and a brand can afford to lose a lot of sales before it eats a net loss of EBITDA/net profit VS the margin gained by eliminating dealers.

In the case of Rolex, AP, and PP dealers...those watches are all already so desirable that ADs are not adding INCREMENTAL demand - they are simply harvesting demand. This makes them effectively worthless to the brand.

This is playing out across almost every kind of consumer brand selling non-commoditized goods you can think of.

Basically...

Wipe your AD network = higher net margins and lower demand = easier to run business by a huge factor = stability & growth

[Xpatcan1]

Originally Posted by Ichiran

Say I'm an AD who is not affected by dealership termination, potentially there will be more customers coming my way from other locations where dealerships have been cut. However, I will still prioritize my existing customers who have bought from me for years/decades. Relationships for such business will take a long time to build again, and it's difficult for Patek to dictate how AD take care of their own customers.

My AD Said they currently get roughly 150 pieces a year and expect this to jump up to about 200 with dealerships closing.

[scurfa]

A lot at brands are going down the boutique road, this is an article from December in the watch trade magazine Europa Star

https://www.europastar.com/the-watch...tribution.html


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[Mini2]

Originally Posted by Xpatcan1

My AD Said they currently get roughly 150 pieces a year and expect this to jump up to about 200 with dealerships closing.

They must get more but maybe is dependent on AD
Saying that 50% is probably sports of some sort

[Calatrava r]

Originally Posted by Ichiran

Say I'm an AD who is not affected by dealership termination, potentially there will be more customers coming my way from other locations where dealerships have been cut. However, I will still prioritize my existing customers who have bought from me for years/decades. Relationships for such business will take a long time to build again, and it's difficult for Patek to dictate how AD take care of their own customers.

They do it with ease. Patek holds all the cards.

[Calatrava r]

Originally Posted by Xpatcan1

My AD Said they currently get roughly 150 pieces a year and expect this to jump up to about 200 with dealerships closing.

150 seems high to me. I would have thought 5 or 6 per month.