GENEVA — Thierry Stern seemed happy when, in an job interview in early December, he reported 2019 would be a document yr for Patek Philippe.
“I’m not functioning soon after documents every single 12 months, while,” Mr. Stern, the chief govt, claimed, declining to depth the company’s turnover. “This is the magnificence. We don’t have any shareholders. We never treatment.”
Patek Philippe has been in the fingers of the Stern spouse and children due to the fact 1932 and, regardless of repeated reviews of desire from key luxury groups, is however impartial. It does not make its economical results general public, but according to estimates by the Swiss private bank Vontobel, in 2018 it experienced profits of 1.45 billion Swiss francs ($1.49 billion), creating it Switzerland’s fifth-premier view company.
But not like the four forward of it, a checklist that is topped by Rolex and Omega, Patek Philippe’s output is modest in comparison. Mr. Stern states Patek tends to make 62,000 watches a yr. Rolex is thought to make a lot more than a million.
Mr. Stern, who succeeded his father, Philippe Stern, as president in 2009, explained his ambition was to increase the company by no more than 3 percent every single year. “If the economy’s not so very good, we can lower also,” he reported.
But there is minor indication of retreat. In 2005, when I very first interviewed Mr. Stern and his father, he mentioned the firm was generating 30,000 watches a 12 months, a lot less than half the present figure.
And, Mr. Stern stated in December, the enterprise employed 460 people in 1996 when it moved to its headquarters in the Geneva suburb of Program-les-Ouates. That selection has risen to 1,600, with 600 extra staff members members all over the world.
To accommodate the development, the business presently has moved into portion of a sprawling just about 1.2 million-square-foot setting up staying completed along with its headquarters. Mr. Stern explained the business funded the development expense of more than 1 billion Swiss francs, introducing with a wry smile, “We really do not like banking companies.”
Though there have been some modifications, Mr. Stern, 49, said he continues to follow in his father’s footsteps. “It was very clear for me and my Dad that we ought to continue to keep the exact same strategy,” he stated, although Patek has benefited from digital resources like Instagram. In the 2005 interview, he explained, “we are not a style brand name,” an tactic he has managed.
Final 12 months there had been information reports that Rolex needed to get Patek. “I think I produced it pretty very clear that I will not promote,” Mr. Stern claimed. “We must be proud of it when large organizations want to acquire Patek since that signifies we are performing a thing appropriate. But we are not for sale.”
Rather, he mentioned, he intends to be at the business for what he called “many years” just before presenting the keys to a person of his two sons. The elder, at 18, is learning for the hospitality business, but the youthful, who is 16, has just started off learning watchmaking and performing aspect time at the factory.
“I didn’t have two youngsters to just take around Patek,” Mr. Stern reported. “They have to make their personal decision. We will often find somebody that will just take care of Patek Philippe.”
Looking to the upcoming decade, Mr. Stern said that he had no designs to develop into new territories and that he was not pushing hard in China, which his rivals have discovered as crucial to classic watchmaking’s very long-time period good results. In accordance to the Federation of the Swiss Observe Sector, Swiss observe exports to mainland China rose 32.8 % from 2016 to 2018. Patek opened its first branded showroom in Shanghai in 2005.
“I’m not concerned to stay driving,” Mr. Stern reported. “We are previously in 74 countries. I don’t have the ability, and I would not destroy yet another marketplace just to change watches to China. But also, we go action by action. This is how we do our business enterprise. It’s worked in the complete world.”
He claimed the strategy had protected Patek’s company when markets have declined. In December, for illustration, the federation claimed that exports to Hong Kong, which it lists separately from mainland China, ended up down by 26.7 per cent in November yr around yr, eroded by the city’s ongoing civil unrest and related financial economic downturn.
“Hong Kong has not truly afflicted us,” Mr. Stern claimed. “We are down possibly 30 %, which is really great. Some models are down 70 or 80 per cent. That is a catastrophe. But which is their mistake. They were being focusing way too much on Hong Kong.”
If he has a worry, Mr. Stern explained, it is the rise of what the observe market phone calls “flippers,” customers who purchase higher-need watches to resell them at a premium, a observe he suggests he desired to curtail. But he explained he was not doing work with stores to solve a trouble in which charges of parts these types of as Patek’s steel Nautilus have skyrocketed on the pre-owned market, often to extra than double checklist selling price.
“Maybe from time to time the suppliers are portion of it,” he mentioned, but he does not lay all the blame at their doors. “We purchase again a good deal of watches each individual calendar year from the secondary market place, due to the fact we want to know why a check out is for sale.”
Having said that, he reported that if the organization acquired that a retailer is selling watches to shoppers associated in this sort of resales, and the retailer did not stop such exercise, the enterprise would close the retailer’s Patek account. “If I have the proof, then I act,” Mr. Stern mentioned.
He reported climbing selling prices in the principal market had altered Patek Philippe’s client profile. “We are getting rid of so several individuals who are savoring watches, because they simply cannot manage it anymore,” he claimed. “But we are also attaining a total new younger generation who are very effective, made a large amount of dollars and who are prepared to spend in Patek. That has actually altered.”
Mr. Stern remains bullish about his company’s fortunes.
“I never see why Patek Philippe must be in danger as long as we are extremely cautious,” he mentioned. “The challenging section is to keep unbiased.”