In the ’70s and early ’80s, the explosive rise of quartz watches – a period known in the mechanical watchmaking world as the quartz crisis – posed a serious threat to the existence of mechanical timepieces. But it is not these challenging times that fourth-generation Patek Philippe head Thierry Stern refers to when he tells us about a pivotal point that saddened his father, Philippe Stern – now the brand’s honorary president – back in those days.
Rather, it was having to sign formal agreements with his business associates, an inevitability as his fine-watch business grew. Says Stern: “My dad, I remember, was very sad when we started to have contracts. His business, until then, was done by shaking hands. Trust is very important. We have always cherished relationships more than making money.”
Similarly, the brand’s longstanding relationship with its retailers and clients in South-east Asia was also a reason why Singapore – its hub in the region – was chosen as the location for the Patek Philippe Watch Art Grand Exhibition last September and October. We met Stern when he was in town for the exhibition, the fifth of its kind and the largest that Patek Philippe has done yet. Welcoming a record-breaking 68,000 visitors over its 16-day run, the showcase was a surefire success, attracting horology enthusiasts from here and around the region.
Our little red dot has long been an important centre for Patek Philippe, which has a history dating back to 1839, and has been owned by the Stern family since 1932. Today, it has an estimated annual revenue of 1.5 billion Swiss francs (S$2.07 billion). It was Thierry’s great- grandfather, Henri Stern, who first established a relationship with well-known figures of our watch scene, such as Anthony Lim of Cortina Watch and Henry Tay of The Hour Glass.
In a visibly positive and chatty mood a few days into the exhibition, Stern recalls: “It was my grandfather who started our business here in the ’60s. So at that time, my grandfather met Mr Tay of The Hour Glass and Mr Lim of Cortina; they were already selling watches, although, of course, they did not have the types of stores that you see today. They were also just starting out in their business. It wasn’t easy, because at that time, there were no rules, like how to buy watches or resell them. When we came here, we really started talking about how to organise the networks. There wasn’t really any formal agreement. But they grew their businesses together.”
Today, the 49-year-old president of Patek Philippe continues this legacy, working closely with the current generation of leaders heading these family-owned retailers – Jeremy Lim (COO of Cortina Watch) and Michael Tay (group MD of The Hour Glass). Stern’s emphasis on family values extends even to his long-held, vocal support for the Baselworld watch and jewellery fair, which has seen an exodus of exhibitors in recent years. He notes: “I could do shows [to present Patek Philippe’s novelties] on my own, but this would be bad for half of our retailers, who are family businesses. They don’t have the people or money to travel four times a year to Geneva, Basel, Hong Kong – or wherever else there are watch and jewellery shows. Baselworld is important for us and for retailers, who can shop around [the fair’s thousands of exhibiting brands] in one week.”
That said, as the head of a billion-dollar company, Stern is not one to just play by sentiment and old ties. While he admits to a penchant for dealing with family-run operations, he adds: “You have to be open to all business. The most important thing is that people agree to the rules that we have, in the way we sell Patek Philippe. Some people in the groups are also very good. We just have to be clear about how to sell, because they have to show figures to their shareholders, and they are a bit more aggressive, which I can understand.
“Groups have been here since the ’80s, and they have been growing. Voila – deal with it. But for sure, I do not like dealing with some people who do not follow the rules. Why? Simply because our clients will also not accept it.”
These “rules” include the fair allocation of Patek’s timepieces – sought-after, especially with the brand’s modest current annual production of 62,000 pieces – across different markets and retailers. This desire for fairness also helps to explain why Patek Philippe has been cautious about its entry into China, the world’s largest luxury market. Having first entered mainland China in 2005, the brand has until today limited its presence there to two boutiques – one in Shanghai and one in Beijing.
Stern observes: “You can imagine how many watches we could sell in China; but it’s a huge amount and we don’t have them. I will increase production step by step, but I’m not willing to take pieces from other markets [and move them to China]. This wouldn’t be fair. And I don’t think our Chinese clients would like that either. They know how respectful we are, and I think that’s one of the reasons they are interested in the brand. Not just because our watches keep their value or are beautiful, but because there is a family behind them with certain values.”