Patek Boutique / AD survival skills

[CKL1213]

ok, as we all know the so called "entry" of Patek are 5167 and 5711

but as we all know again, it seems like you can't find / buy a 5167 and especially 5711 blue dial at any Patek Boutique or AD

need to put our name and wait for like 3 years

is just like cars, BMW need to sell more 3 and 5 series to sustain their business, is not like everybody buying a 7 series

So how do they survive? I don't feel like people just walk in and buy Grand Complications and Repeater on a monthly basis.

just curious

[GB-man]

Originally Posted by CKL1213

ok, as we all know the so called "entry" of Patek are 5167 and 5711

but as we all know again, it seems like you can't find / buy a 5167 and especially 5711 blue dial at any Patek Boutique or AD

need to put our name and wait for like 3 years

is just like cars, BMW need to sell more 3 and 5 series to sustain their business, is not like everybody buying a 7 series

So how do they survive? I don't feel like people just walk in and buy Grand Complications and Repeater on a monthly basis.

just curious

You make a fair point.
Better to be a Rolex dealer than a Patek dealer me thinks

[tyler1980]

I would say they are selling a lot of these watches. A lot, by Patek standards taking total production into account. There are just way more buyers than production. The vast majority of people in this subform have either an Aquanaut or a Nautilus in some variation. Not very many have grand complications. These ss sports watches are out there, but they dont make close to a million watches a year either like Rolex.

Do I really, really want a SS 5711? Nope. But if I had a opportunity to get one I would buy it. Whenever you have people buying or waiting for watches they don't even really want that says everything. Basically everyone who has any interest in Patek would buy it, plus all the speculators and dealers, and thats a lot of competition.

[carlhaluss]

I certainly see your point. However, they must be doing something right. I doubt that sales volume is sustaining them. My Patek Philippe AD - who has, in the past sold Rolex, IWC and Omega as well as Patek - now has only Patek and IWC.

In the New Year they are opening a Patek Philippe Boutique, and letting IWC go. They recently stopped selling Rolex, as there is now a Rolex Boutique only a block away, and an IWC Boutique is opening just around the corner as well.

Many of the models in their current collection are worth more than three or four Rolex models. And I know they have at least a couple of clients who are Patek collectors. Collections of watches each exceeding one hundred grand! Even the Gondolo that I am waiting for is the least expensive of all the models in their current inventory, and the Gondolo is almost 30 grand. That is the most money I will likely ever spend on a watch. So far, the most I have spent on a single watch is 8 grand, so already one of the least expensive Patek models is worth at least three times that amount.

I would say that for an average single Patek Philippe sale, they are taking in at least as much as four or five other brands/models. And there is certainly no shortage of clients.

[1William]

I like and admire PP but have never owned one based on my view point of price and value. For my financial situation, I believe that Rolex delivers as good or better than PP. Take into account service times and a somewhat limited secondary market for models that are not hot or sought after and the brand does not work for me. I think both PP and Rolex are in a bubble with prices and availability for hot models and they are playing a game with customers and AD's. I do not know what the end game is for either company but I believe that you run the risk of moving customers who would buy if available to other brands. Just my thoughts.

[thomaspp]

Being a Patek AD is a lucrative business. Patek does a good job of limiting steel sports Watches which get people on the door and keeps demand and interest high. That being said, I have the impression that annual calendars, perpetuals and others are just getting harder and harder to sell... the divide between popular models and those that are not has never seemed to be bigger


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[AK797]

Originally Posted by thomaspp

Being a Patek AD is a lucrative business. Patek does a good job of limiting steel sports Watches which get people on the door and keeps demand and interest high. That being said, I have the impression that annual calendars, perpetuals and others are just getting harder and harder to sell... the divide between popular models and those that are not has never seemed to be bigger


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Yes the divide seems greater, however Rolex has unearthed an AC in SS that is doing very well as opposed to the PM SKYD, and PP released the 5522 in SS at a great price point, so these are avenues to explore. Seems conspicuous consumption is most enjoyed at the resale than retail level now, and even the VIPs would now rather have a "cheap" but rare watch than an ultra expensive complicated piece.

[Passionata]

Originally Posted by thomaspp

Being a Patek AD is a lucrative business. Patek does a good job of limiting steel sports Watches which get people on the door and keeps demand and interest high. That being said, I have the impression that annual calendars, perpetuals and others are just getting harder and harder to sell... the divide between popular models and those that are not has never seemed to be bigger


Sent from my iPhone using Tapatalk

i m still wondering why PP not double the price of SS models .it would solve the problem for a while

[HorologyK]

When the economy turns, it will be interesting to see what happens with Patek.

[locutus49]

Here is what amazes me. A couple years ago watch experts were predicting the death of the mechanical watch as millennials either did not wear watches or wore Apple watches, etc.

Now it appears watches, like SS Pateks and Rolexes, are in extreme demand. Who is buying them: millennials or geezers? Does anyone know how the experts got this so wrong?

[tyler1980]

Originally Posted by locutus49

Here is what amazes me. A couple years ago watch experts were predicting the death of the mechanical watch as millennials either did not wear watches or wore Apple watches, etc.

Now it appears watches, like SS Pateks and Rolexes, are in extreme demand. Who is buying them: millennials or geezers? Does anyone know how the experts got this so wrong?

they are still right i think, unfortunately. Its the middle and lower brands and the quartz fashion brands (fossil, MK, etc) that are going to get squeezed out. I think the top tier is in a much better position than those directly competing on price with wearable tech.

The only digital watch i'd ever buy would be a Zeitwerk

[GB-man]

Originally Posted by locutus49

Here is what amazes me. A couple years ago watch experts were predicting the death of the mechanical watch as millennials either did not wear watches or wore Apple watches, etc.

Now it appears watches, like SS Pateks and Rolexes, are in extreme demand. Who is buying them: millennials or geezers? Does anyone know how the experts got this so wrong?

Fat pockets from a stock market that’s doubled in just 5 years or so will do it.

[AK797]

Originally Posted by GB-man

Fat pockets from a stock market that’s doubled in just 5 years or so will do it.

And just as people get used to buying rising equities they want the same on their watches now, and thus we see demand rising even more on the in-play brands as demand falls off for most others. It's a good indicator of which brands and watches will survive in the i-future.

[locutus49]

Good point. If the stock market drops, as it inevitably will, will demand for Rolexes and Patek SS models also drop?

Originally Posted by AK797

And just as people get used to buying rising equities they want the same on their watches now, and thus we see demand rising even more on the in-play brands as demand falls off for most others. It's a good indicator of which brands and watches will survive in the i-future.

[GB-man]

Originally Posted by locutus49

Good point. If the stock market drops, as it inevitably will, will demand for Rolexes and Patek SS models also drop?

Without question these are expensive luxury goods bought mainly by the upper middle class.

[jon_jon]

Originally Posted by CKL1213

ok, as we all know the so called "entry" of Patek are 5167 and 5711

but as we all know again, it seems like you can't find / buy a 5167 and especially 5711 blue dial at any Patek Boutique or AD

need to put our name and wait for like 3 years

is just like cars, BMW need to sell more 3 and 5 series to sustain their business, is not like everybody buying a 7 series

So how do they survive? I don't feel like people just walk in and buy Grand Complications and Repeater on a monthly basis.

just curious

There has always been a strong bias towards "sports" watches here on TRF. However unlike Rolex, Patek was never been and probably will never be predominantly a sports watch company. Their focus has always been on classic dress watches and complicated watches. So the Calatravas, chronos, and PCs are their "bread and butter", with the AC becoming more popular over the past 20+ years. The long-term question for the company is will they continue this emphasis or will they change focus to cater to the "sports watch" crowd.

Before the "Chinese government crack down on luxury goods", tourists were buying these watches in bulk and many ADs throughout Europe, North America and parts of Asia were having a hard time keeping up with their inventory. I would estimate that upto 50% of Pateks were purchased by the Chinese at one time. However over the past few years, the tide has shifted significantly. Unsold inventory is piling up at ADs and I assume they are being unloaded on to the gray market. But Patek ADs still do well. It is the ADs carrying the less "prestigious" Swiss watch brands that are struggling.

[Defiancekofb]

Originally Posted by CKL1213

ok, as we all know the so called "entry" of Patek are 5167 and 5711

but as we all know again, it seems like you can't find / buy a 5167 and especially 5711 blue dial at any Patek Boutique or AD

need to put our name and wait for like 3 years

is just like cars, BMW need to sell more 3 and 5 series to sustain their business, is not like everybody buying a 7 series

So how do they survive? I don't feel like people just walk in and buy Grand Complications and Repeater on a monthly basis.

just curious

I think you underestimate the wealth and buying power of Asian, Middle East and European, markets. These markets buy PM, AC, PC Pateks everyday in large quantities, just look at Brian from Taiwan who got banned. He is not the only one who buys High End Patek in large quantities, just one that happened to have a TRF account to showcase his collection.

Originally Posted by locutus49

Here is what amazes me. A couple years ago watch experts were predicting the death of the mechanical watch as millennials either did not wear watches or wore Apple watches, etc.

Now it appears watches, like SS Pateks and Rolexes, are in extreme demand. Who is buying them: millennials or geezers? Does anyone know how the experts got this so wrong?

10 years ago Amazon was a pretty cheap stock compared to today. LOL So called experts are only as good as their saliva. No one knows how markets will react unless you happen to have insider information. But the stock market at record highs means their is money being made and money being spent. Which is why the gray market is so robust currently.

[CKL1213]

I agree on TRF focus on sport models, hence I get the impressions that Patek rely on Sports Model but in fact they never do.

[The B]

I think jon_jon and Defiancekofb are spot on.

I will add that on two assumptions of the question:

A. the premise that Patek is like BMW (or the auto industry) is misplaced in this example:

"is just like cars, BMW need to sell more 3 and 5 series to sustain their business, is not like everybody buying a 7 series".

From what (I think) I understand about Patek, they are not dependant for survival or even reliant on selling the entry level models as a "bread and butter".

B. Also:

"So how do they survive? I don't feel like people just walk in and buy Grand Complications and Repeater on a monthly basis."

From my experience here in the US, (in Manhattan - where a lot of wealth is concentrated or flowing through at least) there is a definite wait list (anticipation just like the 5711's) for the highest end complications. So, yes - when they do physically arrive in the store, the sale is closed by full payment and delivery plans within days.

[texasmade]

I would think that for some of the really expensive GC’s, an AD would require a non refundable deposit. I couldn’t imagine some of them getting stuck with a $400k+ watch that’s going to take awhile to sell if the original buyer backs out.

[locutus49]

In my town, the PP AD also sells Lange and other brands. I know them and they seem to be doing well. One of our other esteemed members - Sensui - is a customer. The AD is C.J. Charles.

[Calatrava r]

In fact they sell briskly across the entire line and the high end grand complications are pre-order application and sold out to full capacity. The entry level steel models mean utterly nothing to them profit wise.

[Rolexavidfan]

In the past, how many would gun for a Nautilus or an Aquanaut as the first Patek? In my case, I went for an AC because of its unique complication. Prior to the said purchase, my watches were with the usual date only. After that, I only went for the Nautilus after getting my AC.

Hence IMO Patek can actually survive selling GC, AC and PC for that matter.

[GB-man]

Originally Posted by Rolexavidfan

In the past, how many would gun for a Nautilus or an Aquanaut as the first Patek? In my case, I went for an AC because of its unique complication. Prior to the said purchase, my watches were with the usual date only. After that, I only went for the Nautilus after getting my AC.

Hence IMO Patek can actually survive selling GC, AC and PC for that matter.

I did but I got my degree at TRF university and came from rolex. Sports watches are my focus.

5167 was my first.

[tyler1980]

Originally Posted by Rolexavidfan

In the past, how many would gun for a Nautilus or an Aquanaut as the first Patek? In my case, I went for an AC because of its unique complication. Prior to the said purchase, my watches were with the usual date only. After that, I only went for the Nautilus after getting my AC.

Hence IMO Patek can actually survive selling GC, AC and PC for that matter.

my first Patek was almost both an AC and a Nautilus but I went in another direction but it may be my next.

5164A was my first

[tom2517]

Originally Posted by CKL1213

ok, as we all know the so called "entry" of Patek are 5167 and 5711

but as we all know again, it seems like you can't find / buy a 5167 and especially 5711 blue dial at any Patek Boutique or AD

need to put our name and wait for like 3 years

is just like cars, BMW need to sell more 3 and 5 series to sustain their business, is not like everybody buying a 7 series

So how do they survive? I don't feel like people just walk in and buy Grand Complications and Repeater on a monthly basis.

just curious

Well, they sell and have sky high margins, same goes for Patek themselves.

[Kittayos]

From my experience, ADs do liquidate their unsold pieces by combining with a nautilus and these ADs are in different regions of the world. I can name quite a few of them but it won’t be a good idea. Still, if you walk to their shops, you would spot 5396, 5146, 5960, 5140, 5905 plus lots of ladies’ watches and the list goes on. Don’t know what others view it but to my understanding Patek is indeed in trouble a bit. They squeeze down nautilus production hoping customers will shift their attention to a less popular model or more complicated one but the result is opposite. It just makes the sport models higher in demand. I don’t believe the AD is doing well unless deep discount is offered. A few of my friends are working in Patek AD and most of them seem to complain the same stuff.

[Marciano490]

By combining with a nautilus, do you mean make anyone who wants a nautilus also buy a less popular piece?

[tom2517]

Originally Posted by Marciano490

By combining with a nautilus, do you mean make anyone who wants a nautilus also buy a less popular piece?

Yep, they do this all the time, I see it a lot in Asia.

I wanted to buy a 5131P and was told I need to buy a diamond studded Nautilus, plus another unpopular piece in order to get the 5131P at MSRP.

On top of that, many of the ADs sells ultra popular models at a premium. It's against the rules but hard to prove.

[Patek Philippe]

Originally Posted by tom2517

Yep, they do this all the time, I see it a lot in Asia.

I wanted to buy a 5131P and was told I need to buy a diamond studded Nautilus, plus another unpopular piece in order to get the 5131P at MSRP.

On top of that, many of the ADs sells ultra popular models at a premium. It's against the rules but hard to prove.

Yes it is true. That is how the AD survive. I had experienced myself. What a shame.