Interview with Thierry Stern

[Rushne]

I know this topic was posted but it has since been removed by the forum rollback.

https://www.hodinkee.com/articles/pa...hy-itll-have-o

Thought I would put it back up for future reference and because we had some great discussions. Apologies for the long post but trying to catch some of the discussions that happened.

One of the topics we discussed was how Patek is in a catch 22.
They want to be about more than steel watches as they’re very much into precious metal and complications.

Initially steel was the to be an on ramp into the brand. Buy an “entry” level and grow into the precious metals and complications.

Nowadays enthusiasts will still do that. Buy a steel with the thoughts of collecting more down the line.
However, with society being more casual and being exposed to “self marketing” on Instagram, we have non enthusiasts just buying the steel models for social clout or a “flex” as the kids call it. Then they never progress to the precious metals or complications.
Or we have the casual only enthusiast which will see the steel Patek as a grail of casuals. Nothing wrong there of course as that’s just a shift of society.
So now enthusiasts or not, you are forced to show “dedication” by buying precious or complications first with the possibility of being blessed with a steel watch later.

Now Patek doesn’t want to be in steel as much, but they are stuck.
If they just shut down all steel watches they would survive but their customer base would shrink.
Also, their AD network would think twice. Without having steel models to help lubricate the sales of precious metals and complications, why would you want to just sit on years old inventory that is difficult to shift.


I am in the fortunate position of having recently (ordered in 2018 delivered in 2019) purchased a 5167 as an enthusiast with the idea of getting a complication down the road, and I feel lucky, but at the same time extremely annoyed that enthusiasts like others on this forum have to feel the fortunate that we were “blessed” with the opportunity to part with our hard earned to buy a watch. I know this has been discussed to death but I truly wish more enthusiasts like myself would have the same opportunity to own a piece that they lust after.


Other discussions around the interview were that Thierry is a little rough by having a thin veil of contempt towards other brands that are now seen as one watch companies and that if he was part of a more corporate company his responses would have been more polished and rehearsed so as not to put any noses out of line.
Which I can understand but personally I kind of love there is a little humanity and flourishes of personality to his interview and inciting a bit of rivalry.

Without rivalry and passion for your side, you’d never get a wonderful movie like Ford v Ferrari.
I shall now patiently wait for the AP v Patek movie

[Partekular]

An interesting and thoughtful post.

I will add further comment later.

[Partekular]

Scraped from an earlier post on this site.....


Patek Philippe's President: «There will be a farewell-series of the Nautilus 5711»
Through the indiscretion of a retailer, it became known that Patek Philippe is discontinuing the production of its most sought-after watch. In an interview with the NZZ, Thierry Stern, Patek's President comments on this decision for the first time.

Andrea Martel
10.02.2021, 04.30 Uhr

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Deutsche Originalversion

Thierry Stern is the owner and President of Patek Philippe.
Thierry Stern is the owner and President of Patek Philippe.
Jean-Daniel Mey / Patek Philippe
Mr. Stern, in recent days there has been a huge buzz among watch fans because it was announced that Patek Philippe discontinues the production of the Nautilus 5711 in steel. When did you make this decision?

The Nautilus 5711/1A-010, launched in 2006 and soon to be discontinued, officially costs 28 500 CHF, unofficially many times that amount by now.
The Nautilus 5711/1A-010, launched in 2006 and soon to be discontinued, officially costs 28 500 CHF, unofficially many times that amount by now.
Patek Philippe
I knew as early as 2019 that we would have to stop soon, because we had already produced many 5711s and the demand kept increasing. But I also knew that this would be difficult step for a «talking piece» like the Nautilus, although such a production stop is nothing unique.


Why are you stopping the Nautilus 5711?

For one thing, I don't want a single model to suddenly make up 50% or more of our collection and dominate Patek's image. It has happened to us in the past that we produced too many examples of one model, and I didn't want that to happen again. Secondly, we have an obligation to our customers: It's not enough to make the most beautiful watches in the world. I also have to make sure that they retain their value, and rarity is one of the keys to that. For the customers who invest in Patek, that's important. In addition, discontinuing a model allows us to make something new again. We can't just rest, we have to evolve and keep impressing people.

Were the activities of speculators also a reason? After all, Nautilus watches are sometimes bought with the sole goal to resell them at a profit on the gray market.

No, because I can't fight that anyway. Just look at what has happened now. Since our decision became known, the gray market prices for the Nautilus have risen even further. But that's part of the game, I guess: When you take a desirable model off the market, parallel trading takes advantage of it. I try to avoid it, but I can't control everything with my team.

The original Nautilus Ref. 3700/1A was launched in 1976 and produced until the beginning of the 1980s.

The original Nautilus Ref. 3700/1A was launched in 1976 and produced until the beginning of the 1980s.
Patek Philippe
And what about the people who are already on the waiting lists?

Some will go away empty-handed. We are still delivering some 5711s, but we are not talking about thousands of watches.


So disappointment is inevitable.

That's true, but I think our retailers have a responsibility here. They know exactly how many pieces they are getting. However, they seem to find it difficult to tell a customer that he probably has no chance of getting a Nautilus. Instead, they put him on the waiting list, and it gets longer and longer. It's too easy to just say that it's Patek Philippe's fault, that they simply don't produce enough watches.

What do you expect from your retailers?

A professional retailer is able to explain to his customers why we are stopping production. He has to explain that we only produce about 60 000 watches a year, split-up into about 140 different models, including the Nautilus. And that it is impossible to produce enough to meet the demand. After all, no one seriously wants me to greatly increase Nautilus production at the expense of quality, just to make a little more money.

Have you already stopped production?

No, we are producing the last 5711s right now, I don't even know exactly how many. But soon it will be over.


The excitement in the watch-community probably also has something to do with the fact that the production stop was not communicated, but became known through rumors. It wasn't planned that way, was it?

We did it the same way with this Nautilus as we always do: the retailers get a list of the models we're discontinuing, the so-called run-outs. Our plan was to communicate this to the outside world afterwards: nothing big, just a short message, as always. But stupidly, one retailer in Italy sent the list to a friend, who then published the news on Instagram. And that's how people started talking. That was harmful, but that has now happened. I prefer to look at it another way: Patek has about 400 retailers worldwide, and more than 99% have kept tight. That's fantastic.
You then refrained from making an official announcement.

What else could we have said? It was clear to me: If we want to communicate now, we'll do it this way with you. That's more professional for me, and that should be enough.

What comes after the Nautilus 5711?

You don't let a model like this expire without having something new up your sleeve. But I won't talk about that until we launch the watch. What I can tell you, however, is that we like to say goodbye to special watch models with a little surprise. There will therefore be a farewell-series of the 5711, which will be a little different. These watches will be produced soon and will be launched this year. I already know that this will be another nightmare in terms of demand, but I'm counting on my retailers.


And when will the successor model be launched?

To be honest, we haven't finished discussing that internally yet. There are still small details I'm thinking about, because when you launch a new watch, it should always be a little better, even if it's just small details.
You've said before that you don't want a model to be dominant. What does that mean in terms of units?

We don't talk about unit numbers of individual models, but I don't want us to have more than a third steel watches. The steel Nautilus makes up a big part of that quota, and I don't like that. Take the Royal Oak from Audemars Piguet. That's a great watch, but at a certain point it becomes dangerous when one model becomes too dominant. People's taste can suddenly change, and then you have no alternatives to offer. I want to avoid that at all costs with Patek.

Sporty, robust steel watches with integrated bracelets are becoming increasingly popular. Do you want to deliberately buck the trend?

People will always like steel watches, if only because they cost less. They're also easy to sell. But if you make too much steel, it's difficult to go back to gold and platinum afterwards. Some brands had this problem in the 1970s. They could never again sell gold watches. We also don't know if the trend will change again and in twenty years other watches will be in demand. So it's important for me to keep a balance in materials and also make watches that are convincing in gold or platinum. I also have all colors in the collection.


How do you feel about new materials such as carbon or titanium?

I am very interested in new materials when it comes to making our movements smaller, thinner or more accurate. But when it comes to the case, carbon would be a step backwards for me. We had to work very hard to get into the gold and platinum league, and that's where we should stay. My father told me years ago, «Leave these materials to Hublot and the others, they do a good job.» I think he's right, also because we can't do everything.

However, there is at least one Patek Philippe in titanium.

Very rarely we make an exception, but only for a good cause, when the goal is to make as much money as possible. For example, we made a titanium model of our Grand Complication Ref. 5208, which is otherwise made in gold, for the charitable watch auction «Only Watch» in 2017, and it was then auctioned off for 6.2 million Swiss francs.

How well did Patek do during the Corona year?

2020 was not our best year, but it was okay. We had to close production for two months. After that, we continued to produce normally, but we decided to postpone the launch of most of our new products until 2021 and instead continue with the proven models . At the end of the year, we were a good 20% down in terms of sales, but that's not a problem, because as a long-standing family business, you're prepared for such things and have reserves. My father has experienced two crises in which business suddenly plummeted by 50%.


But what you produced in 2020 you were able to sell?

I just got the latest figures, and apart from a few hundred units, everything has been sold. We couldn't have done it on our own under these circumstances, but our partners were very creative. That's why it's so important to work with good retailers.

To my knowledge, online-sales were also an issue at Patek during this crisis – for the first time ever.

During the first lockdown, we tried to support our retailers by temporarily allowing them to sell our watches over the Internet. But to everyone's surprise, that didn't work at all. To my knowledge, just two watches were sold this way. This also shows that the customer is not willing to buy a Patek Philippe over the Internet, and I am quite happy about that.

Do you think that in 2021 you will be able to match the pre-crisis sales of 2019?

No, I don't think so. We will hopefully be better than 2020, but it will remain difficult because 2021 is not yet a normal year. There is still a lot of anxiety because it is unclear how quickly we will make progress with the vaccines and how well they will also work against the mutations of the coronavirus.


At least Patek is not dependent on tourists.

That's true, because it was always clear to us that we don't have enough watches to serve tourists in addition to our local clientele. Of course, we accept travelers as customers, but it wouldn't be fair to sell a 5711 to a tourist. A retailer should sell that watch to one of his customers – one he knows appreciates the watch; not to someone he doesn't know and never sees again after the sale.

Until 2019, Patek Philippe presented its new products at the watch fair «Baselworld» each year, and you also took the majority of your orders there. 2021 will be the second year without a major Swiss watch fair. How do you sell your watches now?

We will launch some of our new models at the virtual watch show «Watches & Wonders Geneva» in April. The collection is also ready to be shipped to distributors, who will then present the watches to the retailers. This will take some time at best, because depending on the Corona rules in force, the retailers may have to come one by one. There will not be a big event where we present all the novelties.

Are you looking forward to real trade shows again, or do you think they are no longer needed?

There are three options: one big trade show a year, various small, geographically dispersed trade shows, or pure multimedia events. Personally, I think real trade shows are important to meet the press, the retailers and maybe the end customers. Currently, the goal is for us to have one big trade show in Geneva. If that doesn't work out, I might go to different fairs throughout the year, with virtual events inbetween.

[AK797]

I wasn't too complimentary of Thierry and his cheap shots so hope he and his minions were not behind this TRF lockdown...

[Rushne]

Originally Posted by AK797

I wasn't too complimentary of Thierry and his cheap shots so hope he and his minions were not behind this TRF lockdown...

Hahaha. You never know

[smallcollector]

OP - Thx for posting - interesting article

[francoamerican]

Isn’t it likely the replacement is just as sought after? Also isn’t the larger issue simply the demand for the aquanaut and nautilus lines and over abundance of and lack of desirability for the other lines? If the goal is protecting the entire brand by maintaining a diverse offering, offer better classic watches.

Also move on from steel vs not steel framing. Steel Patek are not “rare” either make them rare or make the same proportion of steel classic watches as steel aquanautilis watches or stop selling production steel watches so they are rare again.

The 5212a was a move in the right direction but the desirable alternatives to the watches you have the love/hate relationship should be in the cases - not a choice between 2, 5 and 10 year waiting periods. Isn’t it telling that other watches don’t even budge in price when discontinued because they are available below MSRP?

[SL BRABUS]

IMHO......

The Aquanaut is the new Nautilus.....

In terms of SS sport watch.....

Read & watch most of Thierry Stern interview.....

It clearly TS want to fade away the Nautilus designer aka Gérald Charles Genta......

TS want to be remembered by and have his own legacy on sport watch...

In the story of the Aquanaut’s origin as told by Nick Foulkes, in Volume 4 of the Patek Philippe Magazine.....

Thierry Stern first project on luxury sport watch with the help of Gérald Buchs...

When the first Aquanaut was first introduce, it was introduce as Nautilus Aquanaut....

Later on the name of the Nautilus has fade away......

TS say that for the past two decades he have been fortunate enough to watch the birth and growing in popularity of the Aquanaut......

"The Aquanaut is easy to wear and I like the fact that it's a little bit more fun than the Nautilus" , says Thierry Stern.....

[jon_jon]

I have met TS a couple of times and he is a nice guy and he cares about the brand and the Patek owners/collectors. If Patek was part of a large conglomerate, the brand legacy can easily be lost due to pressure from shareholders looking at earnings.

We know there are only a few remaining watch companies that are independent and not part of a conglomerate. Patek is one of them. Hopefully they will continue their independence and be maintain their position in the watch watch.

[francoamerican]

Originally Posted by SL BRABUS

IMHO......

The Aquanaut is the new Nautilus.....

In terms of SS sport watch.....

As far as what I am hearing here from Stern’s goals - don’t see how concentrating interest in aquanaut accomplishes anything toward those.

[Etschell]

Sort of laughable that the nautilus doesnt define the brand. Perhaps amongst collectors. But let's be serious amongst the more main stream buyers it is all about the nautilus. Perhaps less heavy handed than the royal oak for AP.

I do not say this as a negative but simply embrace it.

[Partekular]

Originally Posted by Etschell

Sort of laughable that the nautilus doesnt define the brand. Perhaps amongst collectors. But let's be serious amongst the more main stream buyers it is all about the nautilus. Perhaps less heavy handed than the royal oak for AP.

I do not say this as a negative but simply embrace it.

That’s the marketing problem for Veblen goods in a nutshell. PP charisma is carefully crafted on horological excellence relying on the status of million pound rare and limited mechanical complications which set the tone for the product.

PP need to keep hold of the image and the Nautilus with it’s entry level sibling the Aquanaut do not cut the mustard. BUT they do keep the ADs in business with some turnover and buyers turning up for the unavailable model who they might be able to lever into a more complicated Platinum or gold cased models.

The new chrono 5172 and the perpetual calendar 5320 is where they want to be but the costs and skill of making such pieces puts them well above the average watch buyer’s budget. They need a cheaper piece -“entry level” to suck in the buyers to keep the ADs happy while retaining the quality and horological hand made reputation. A difficult square to circle.

Burberry managed it, Rolls Royce struggles.