Interesting Hodinkee interview with Stern

[Valedictorian]

https://www.hodinkee.com/articles/pa...amily-business

[HMHM]

" Why the last victory lap for the 5711 with a green dial?

Well, for me, it was more of a way to say thank you to all of you who have been supporting us with the Nautilus. It was my duty to do it. I wanted to do something nice. But it’s not the end of the Nautilus, it’s just the end of the 5711.

I didn’t say it was the last round, by the way.

There is another bomb coming out...maybe.

Believe me, you will remember the maybe. "

Let's see what's next! The green dial in some light appears to look like the 3700. That was much nicer than the press picture depicted it to be.

[pav333hp]

Originally Posted by HMHM

" Why the last victory lap for the 5711 with a green dial?

Well, for me, it was more of a way to say thank you to all of you who have been supporting us with the Nautilus. It was my duty to do it. I wanted to do something nice. But it’s not the end of the Nautilus, it’s just the end of the 5711.

I didn’t say it was the last round, by the way.

There is another bomb coming out...maybe.

Believe me, you will remember the maybe. "

Let's see what's next! The green dial in some light appears to look like the 3700. That was much nicer than the press picture depicted it to be.

I'm actually REALLY excited about the "maybe bomb" Mr. Stern dropped in the interview. I'm sure it will be very interesting.

[Ichiran]

All these bombs are very nice but they keep going to the same VVVVVIP.

[HMHM]

Originally Posted by Ichiran

All these bombs are very nice but they keep going to the same VVVVVIP.

I’m sure you will be almost at the top!

[PPcollector]

Wow…the “bomb” must be really the one he mentioned as the last farewell series for the 5711. Watch all the VVVIPs pass on the green dials so they will have a chance at the “bomb”! Haha…what a tease

[Ichiran]

Originally Posted by HMHM

I’m sure you will be almost at the top!

No chance mate. I miss out on the 5711/1P, 5976/1G, 6007A, 5711/1A green and baguette, and will certainly sit this new bomb out too.

Then I see the same VVVIPs posting above watches in their instagram.

My friend says I sound like a sour grape all the time, haha, but fair play to these VVVIPs as I'm sure they have some, erm, technologically advanced Patek too and they are more deserving definitely.

[7sins]

Originally Posted by Ichiran

No chance mate. I miss out on the 5711/1P, 5976/1G, 6007A, 5711/1A green and baguette, and will certainly sit this new bomb out too.

Then I see the same VVVIPs posting above watches in their instagram.

My friend says I sound like a sour grape all the time, haha, but fair play to these VVVIPs as I'm sure they have some, erm, technologically advanced Patek too and they are more deserving definitely.

Aren't you in line for a 5740 soon?

[Ichiran]

Originally Posted by 7sins

Aren't you in line for a 5740 soon?

Yes waiting for its shipment.

I was referring to those limited editions released in the past few years. The 5740 is a normal production Patek

[S``]

Originally Posted by Ichiran

Yes waiting for its shipment.

I was referring to those limited editions released in the past few years. The 5740 is a normal production Patek

If you can call that a consolation...that's a first prize...

[77T]

There is a missing element to the interview in my opinion. How to address the imbalance of production, demand and backlog versus fair allocation to loyal customers, new prospects and trust within the retail channel.

Now Steen isn’t alone in this matter. Rolex suffers the same dichotomy but in a 10x scale to PP’s production. If each wants to continue “as is” then their profile may tarnish among the WIS who won’t stand for the bundling, and other schemes.

We won’t solve it, but another group in golf did: The Masters.

They allocate cherished Patron badges to partners, long-standing members, etc. but they also set aside a portion for a random lottery. The parallels with Patek are striking - both are secretive, an unknown number of items are produced, the demand wouldn’t be satisfied if each could increase availability 10-fold, and each are susceptible to grey market arbs.

To set aside 1/10th of monthly output for corresponding monthly “lottery” slots might keep faith with the faithful. Just my


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[CastorKrieg]

Originally Posted by 77T

There is a missing element to the interview in my opinion. How to address the imbalance of production, demand and backlog versus fair allocation to loyal customers, new prospects and trust within the retail channel.

Now Steen isn’t alone in this matter. Rolex suffers the same dichotomy but in a 10x scale to PP’s production. If each wants to continue “as is” then their profile may tarnish among the WIS who won’t stand for the bundling, and other schemes.

We won’t solve it, but another group in golf did: The Masters.

They allocate cherished Patron badges to partners, long-standing members, etc. but they also set aside a portion for a random lottery. The parallels with Patek are striking - both are secretive, an unknown number of items are produced, the demand wouldn’t be satisfied if each could increase availability 10-fold, and each are susceptible to grey market arbs.

To set aside 1/10th of monthly output for corresponding monthly “lottery” slots might keep faith with the faithful. Just my


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This is what I think they will be forced to do, but unofficially of course. You need to have a number of these in-demand watches trickle down to new customers, if only to keep interest in the brand alive. If watches only go to existing customers with large purchase history your potential audience will keep shrinking since people will outspend one another.

[DoraTheExplorerII]

Interesting shot at Blancpain, I wonder why they're on his mind.

[pav333hp]

Originally Posted by 77T

There is a missing element to the interview in my opinion. How to address the imbalance of production, demand and backlog versus fair allocation to loyal customers, new prospects and trust within the retail channel.

Now Steen isn’t alone in this matter. Rolex suffers the same dichotomy but in a 10x scale to PP’s production. If each wants to continue “as is” then their profile may tarnish among the WIS who won’t stand for the bundling, and other schemes.

We won’t solve it, but another group in golf did: The Masters.

They allocate cherished Patron badges to partners, long-standing members, etc. but they also set aside a portion for a random lottery. The parallels with Patek are striking - both are secretive, an unknown number of items are produced, the demand wouldn’t be satisfied if each could increase availability 10-fold, and each are susceptible to grey market arbs.

To set aside 1/10th of monthly output for corresponding monthly “lottery” slots might keep faith with the faithful. Just my


Sent from my iPhone using Tapatalk Pro

I was talking to Patek AD few weeks ago, and they mentioned this exact thing - management wants to start allocating some high demand pieces like Nautilus to new or smaller spend customers to help attract them to the store (which sells other watches and jewelry).

[de66]

Instead of becoming a "one watch brand" there is an innate risk of becoming a "one client" brand - so to speak.

When the 5650 came out the initial overal public reactions were less than positive (same with the royal oak 15202ip btw). The 5711 was around for a long time and we all remember times when these were more easily available. When the aquanaut was launched (as a "Nautilus Aquanaut" the interest from the long standing clients was luke warm. I initially passed on both because I wanted my first Patek to have a complication, I passed on rubber because I wanted my first Nautilus to be on bracelet. Many of these older generation clients were not interested in these "entry level" models.

I mention this because there has been a shift in focus from these valued clients, making the "affordable" models suddenly unobtainable, frustrating both clients and dealers. When the time came that my budget allowed me a 5711 and/or 5167 the demand had risen to where the ADs still entertained waiting lists. Now its more often "impossible" than anything else.

I dont really understand the need for Patek to publicly advertise and announce these models. It gives a lot of people the illusion that they have a chance of getting one. I think with these kind of models they should follow the same strategy like they did with the first 5711P and stop advertising them.

[Keanuchan]

Originally Posted by de66

Instead of becoming a "one watch brand" there is an innate risk of becoming a "one client" brand - so to speak.

When the 5650 came out the initial overal public reactions were less than positive (same with the royal oak 15202ip btw). The 5711 was around for a long time and we all remember times when these were more easily available. When the aquanaut was launched (as a "Nautilus Aquanaut" the interest from the long standing clients was luke warm. I initially passed on both because I wanted my first Patek to have a complication, I passed on rubber because I wanted my first Nautilus to be on bracelet. Many of these older generation clients were not interested in these "entry level" models.

I mention this because there has been a shift in focus from these valued clients, making the "affordable" models suddenly unobtainable, frustrating both clients and dealers. When the time came that my budget allowed me a 5711 and/or 5167 the demand had risen to where the ADs still entertained waiting lists. Now its more often "impossible" than anything else.

I dont really understand the need for Patek to publicly advertise and announce these models. It gives a lot of people the illusion that they have a chance of getting one. I think with these kind of models they should follow the same strategy like they did with the first 5711P and stop advertising them.

Agree.

[Russell996]

Originally Posted by pav333hp

I was talking to Patek AD few weeks ago, and they mentioned this exact thing - management wants to start allocating some high demand pieces like Nautilus to new or smaller spend customers to help attract them to the store (which sells other watches and jewelry).

They have always done this, it is not new. A number of pieces each year go to new clients.

Originally Posted by de66

Instead of becoming a "one watch brand" there is an innate risk of becoming a "one client" brand - so to speak.

When the 5650 came out the initial overal public reactions were less than positive (same with the royal oak 15202ip btw). The 5711 was around for a long time and we all remember times when these were more easily available. When the aquanaut was launched (as a "Nautilus Aquanaut" the interest from the long standing clients was luke warm. I initially passed on both because I wanted my first Patek to have a complication, I passed on rubber because I wanted my first Nautilus to be on bracelet. Many of these older generation clients were not interested in these "entry level" models.

I mention this because there has been a shift in focus from these valued clients, making the "affordable" models suddenly unobtainable, frustrating both clients and dealers. When the time came that my budget allowed me a 5711 and/or 5167 the demand had risen to where the ADs still entertained waiting lists. Now its more often "impossible" than anything else.

I dont really understand the need for Patek to publicly advertise and announce these models. It gives a lot of people the illusion that they have a chance of getting one. I think with these kind of models they should follow the same strategy like they did with the first 5711P and stop advertising them.

I'm afraid I don't understand what you are suggesting, Patek strive to support valued clients and get them a Nautilus after a reasonable wait and there is a policy to sell a certain number of these pieces annually to new clients.
What is your strategy suggestion?

[cascavel]

Originally Posted by 77T

There is a missing element to the interview in my opinion. How to address the imbalance of production, demand and backlog versus fair allocation to loyal customers, new prospects and trust within the retail channel.

Now Steen isn’t alone in this matter. Rolex suffers the same dichotomy but in a 10x scale to PP’s production. If each wants to continue “as is” then their profile may tarnish among the WIS who won’t stand for the bundling, and other schemes.

We won’t solve it, but another group in golf did: The Masters.

They allocate cherished Patron badges to partners, long-standing members, etc. but they also set aside a portion for a random lottery. The parallels with Patek are striking - both are secretive, an unknown number of items are produced, the demand wouldn’t be satisfied if each could increase availability 10-fold, and each are susceptible to grey market arbs.

To set aside 1/10th of monthly output for corresponding monthly “lottery” slots might keep faith with the faithful. Just my


Sent from my iPhone using Tapatalk Pro

I think Patek has solved the problem of "fair allocation to loyal customers". It's as simple as "if you are loyal to us and spend a ton of money on other watches you may be allocated these, otherwise, unobtainable watches". Why would PP want to do a lottery and allocate a watch to a buyer whose only other purchase was an Aquanaut back in 2017, for example, when they can give it to someone who has bought five watches and spent half a million with them?
The notion of "fairness" in the ultra-luxury watch market makes no sense since nobody really needs these things and there is no requirement that things be fair.

[CastorKrieg]

Originally Posted by DoraTheExplorerII

Interesting shot at Blancpain, I wonder why they're on his mind.

Thierry is a very direct guy, you can see it from his other interviews.

Originally Posted by cascavel

Why would PP want to do a lottery and allocate a watch to a buyer whose only other purchase was an Aquanaut back in 2017, for example, when they can give it to someone who has bought five watches and spent half a million with them?

Because part of the allure of PP is 'being above all that', influencers, ambassadors, special editions, etc. Which is why some people choose PP over other brands.

[AK797]

Originally Posted by Ichiran

All these bombs are very nice but they keep going to the same VVVVVIP.

Hopefully at least these guys have reached puberty unlike the AP wunderkinds.

[AK797]

Originally Posted by de66

I dont really understand the need for Patek to publicly advertise and announce these models. It gives a lot of people the illusion that they have a chance of getting one. I think with these kind of models they should follow the same strategy like they did with the first 5711P and stop advertising them.

I think he has gone full circle, from a few years ago innocently talking about production and discontinuing models and causing the market to react wildly, to now deliberately trying to stir up the hype... he sort of reminds me of the girl singer, like Avril Lavigne/Billie Eilish, who was the cool girl but then as time goes by they start taking off their clothes and sexing it up.

[77T]

Originally Posted by cascavel

I think Patek has solved the problem of "fair allocation to loyal customers". It's as simple as "if you are loyal to us and spend a ton of money on other watches you may be allocated these, otherwise, unobtainable watches". Why would PP want to do a lottery and allocate a watch to a buyer whose only other purchase was an Aquanaut back in 2017, for example, when they can give it to someone who has bought five watches and spent half a million with them?

The notion of "fairness" in the ultra-luxury watch market makes no sense since nobody really needs these things and there is no requirement that things be fair.

I understand you disagree with the concept. Respect that opinion and don’t expect you’ll change it. For the benefit of clarity, I was opining on time honored actions to preserve a positive corporate image (like the Masters Tournament).

But you are describing how the AD allocates their inventory - currently Patek has no direct allocation methods to buyers (except, of course, the work they do with royalty and high value corporate clients). Plus, at times, Patek puts up a rare model for a charity auction.

Patek and Rolex both ascribe to the notion of higher values like fairness as demonstrated by the Patek Philippe Institute and Rolex Foundation principles. I simply believe they could keep their current model and also introduce an element that addressed the immense demand.


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[KBM]

Thanks for the link!

[cascavel]

Originally Posted by 77T

I understand you disagree with the concept. Respect that opinion and don’t expect you’ll change it. For the benefit of clarity, I was opining on time honored actions to preserve a positive corporate image (like the Masters Tournament).

But you are describing how the AD allocates their inventory - currently Patek has no direct allocation methods to buyers (except, of course, the work they do with royalty and high value corporate clients). Plus, at times, Patek puts up a rare model for a charity auction.

Patek and Rolex both ascribe to the notion of higher values like fairness as demonstrated by the Patek Philippe Institute and Rolex Foundation principles. I simply believe they could keep their current model and also introduce an element that addressed the immense demand.


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I think that those of us who sit around reading posts about watches on sites like this have a skewed view of the world as it relates to the nexus of watches and business. We think that because we love watches and study them and pine about owning them that we are deserving of corporate help in obtaining them and that, somehow, that should take preference, or at least have a niche, in the decision about who gets to buy the watches. So far, no watch manufacturer has seemed to embrace that view. In fact, as you point out, "Patek has no direct allocation methods to buyers" indicating that Patek wants to outsource this chore.
Having been flatly denied access to watches I wanted at boutiques of high end producers of non-limited edition watches, in other words, not a sold out model, I have difficulty believing that these companies will, all of a sudden, adopt some altruistic method of getting watches into the hands of the deserving but non-buying customer.

[77T]

Originally Posted by cascavel

I think that those of us who sit around reading posts about watches on sites like this have a skewed view of the world as it relates to the nexus of watches and business. We think that because we love watches and study them and pine about owning them that we are deserving of corporate help in obtaining them and that, somehow, that should take preference, or at least have a niche, in the decision about who gets to buy the watches. So far, no watch manufacturer has seemed to embrace that view. In fact, as you point out, "Patek has no direct allocation methods to buyers" indicating that Patek wants to outsource this chore.

Having been flatly denied access to watches I wanted at boutiques of high end producers of non-limited edition watches, in other words, not a sold out model, I have difficulty believing that these companies will, all of a sudden, adopt some altruistic method of getting watches into the hands of the deserving but non-buying customer.

Good points. Although not in the same league with Patek, Omega has moved in the direction of DTC (direct to consumer) with website ordering.

This is not a fix for Patek or Rolex but it does flatten the pecking order…


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[RussW]

What if the ‘bomb’ is not a new watch, but an announcement that the 5712, or 5711/1r is discontinued.

[Russell996]

Originally Posted by 77T

Good points. Although not in the same league with Patek, Omega has moved in the direction of DTC (direct to consumer) with website ordering.

This is not a fix for Patek or Rolex but it does flatten the pecking order…


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Have they done it with popular pieces such as the new Snoopy?

[Mini2]

Originally Posted by RussW

What if the ‘bomb’ is not a new watch, but an announcement that the 5712, or 5711/1r is discontinued.

My understanding is there is going to be a salmon colour dial 5711 to commemorate the ending of the green 5711 next year

[chiscott_29]

Originally Posted by cascavel

I think that those of us who sit around reading posts about watches on sites like this have a skewed view of the world as it relates to the nexus of watches and business. We think that because we love watches and study them and pine about owning them that we are deserving of corporate help in obtaining them and that, somehow, that should take preference, or at least have a niche, in the decision about who gets to buy the watches. So far, no watch manufacturer has seemed to embrace that view. In fact, as you point out, "Patek has no direct allocation methods to buyers" indicating that Patek wants to outsource this chore.
Having been flatly denied access to watches I wanted at boutiques of high end producers of non-limited edition watches, in other words, not a sold out model, I have difficulty believing that these companies will, all of a sudden, adopt some altruistic method of getting watches into the hands of the deserving but non-buying customer.

Excellently stated and I agree with all of this.

My only hope (which is really impossible without concerted engagement and investment) would be to be able to do something constructive to filter out the genuine customer/collector from the dealer/flipper.

There are still way too many of these desirable pieces going directly to the grays and that honestly needs to stop. I have zero qualms with these pieces going to VIPs - That's just how things work EVERYWHERE. If they've spend $500k on other pieces, by all means they deserve a Nautilus and an Aquanaut. And I have no qualms with collectors moving a piece or two at nice profits...it's a benefit of being a VIP.

But there are so many of these going to intermediaries or the grays directly and that's what is disheartening from my viewpoint. As a result, a lot of people like myself are priced out and on the outside when it comes to Patek.

Oh well, there are many other games in town and the reality is Patek will survive just fine without me and the several others in a similar situation. It's hard to see it this way, but that's just reality.

[ts3]

Originally Posted by Mini2

My understanding is there is going to be a salmon colour dial 5711 to commemorate the ending of the green 5711 next year

Good one ... (... I suppose)