Hubert Burda Media

Patek Philippe tackles the future

Thierry Stern, president of Patek Philippe, discusses his ambitions, the digital age and the importance of preserving heritage.

How does Patek Philippe strike a balance between communicating and preserving provenance and history, and staying relevant and progressive?

The fact that we are a family business gives us a big advantage. I benefit from my father’s know-how and in return, he benefits from my youth and difference in opinion. It’s this link that makes us quite powerful. Although I strive to always innovate, I also have a [brand] guardian in my dad who reminds me to keep to our DNA and do things a certain way. This allows us to evolve without forgetting our tradition of innovation — that’s how I grew up. I always say that I need to play a little bit of the devil: It means I have to go on the line but be careful not to fall on the wrong side. And this comes with experience. I ventured too far when I was younger and my dad had to warn me: “Thierry, watch out. This is too far”. Many years later, I am able to check myself. Perhaps one day, I will have to take the place of my dad and do the same with my children.

Do you find it difficult to keep that balance in an age of disruption?

Not really. I have a clear vision of where I want to go with Patek Philippe. We never change our strategy and when you have a clear strategy, it’s much easier to continue to innovate and try new things. The pilot watch (2015) was a good example: It was a little different but it’s still a Patek Philippe. I know the quality and movement have to be to be beautiful and precise, and every detail is very important. You need to take risks but you have to calculate them — it’s like a game of chess.

The digital world — smart watches and more importantly, e-commerce — is fast becoming a focus for the luxury industry. How is Patek Philippe tackling the digital age?

I’m not willing to tackle it. I’m using technology to educate people, not to sell. It’s a good moment when one buys a Patek Philippe. It’s when you sit down, talk about watches and try them — the Internet cannot do that. I strongly believe it would be a mistake to sell Patek Philippe watches through the Internet. I’m not selling something mass — [a Patek Philippe watch is] unique and you need to choose your watch very wisely. And to do that, you need to wear it on your wrist first. It’s not the case on the Internet: You go [to the website], look for the best price, and order. This is not the strategy for Patek Philippe. The day it’s going to be like that would be the one you question the need to do something exceptional. Imagine all of us sitting in our beds and ordering everything — food, watches, etc. It’s going to be boring. I don’t want to see this happen for us.

The digital age also brings to the market a new generation of consumers who are younger and more demanding. Many watchmakers have reacted by introducing more entry-level watches (whether in steel or with less complications). Will this also be a strategy for Patek Philippe?

I cannot go everywhere and I don’t think it will be very wise for Patek Philippe to suddenly produce a very cheap watch. If you buy a Patek Philippe, you expect a certain quality — I’m sorry, but this quality comes with a price. If you want a watch at a cheaper price, there are many other brands that offer beautiful watches as well. I think Patek Philippe has to stay where we are. It took us so many years to stay at this level so why should I go down now especially when I’m producing only 58,000 pieces for the whole world?

Do you consider smartwatches a threat at all?

Not at all. I think we have different tastes. I think it’s cool: At the beginning, the new-gen was using only smartphones; suddenly, smartwatches came into the picture and you see younger people wearing something again on the wrist. Today, it’s a smart watch. But tomorrow? Maybe it’s going to be a Patek Philippe.

How does Patek Philippe cater to the rapidly rising Chinese demographic?

We don’t. I think it will be a big mistake to adapt to a single market. People like Patek Philippe because of the design and the philosophy of our brand. Once you adapt yourself to a single market, you’re going to lose that. I know many brands do that but I believe it’s a mistake: If you’re willing to buy a Swiss watch, you may not expect to see dials with Chinese information on it. My task is to understand everyone’s needs and the biggest challenge is to create one watch that would be nice for the European, Asian and American markets — this is what’s most important. I have to make one product that seduces everybody and I will not do specific pieces for a market because that will make me lose my identity. You can always create a special dome clock for a specific market but we are talking about one clock, one pocket watch, or three to five beautiful enamel dials — those I’ll agree to, but not for the core collection.

What are your thoughts on the rise of luxury conglomerates? Do their movements and developments have any impact on the business?

I think they are getting too big. They are businessmen, not watchmakers, and that’s the difference. To have 10 to 15 brands under one roof is not easy. You have to control all of that. With every brand turning to the same supplier, watchmakers and aftersales service centres, you will end up suddenly losing your personality. Look what happened this morning (Richemont’s announcement of Georges Kern’s departure)…I think they are going to face problems because they have gotten too big and it’s difficult for them to handle that.

Do you consider the current slump in the luxury watch industry a momentary blip?

It’s difficult to say. However, I believe that the industry will never be the same again — we will not be going back to how it was a few years ago. The world is evolving and it’s our duty to adapt. This happened because too many watchmakers produced too many watches — it’s as simple as that. They made a heavy mistake especially with mainland China. They thought it would be a fantastic year and they were going to sell so many watches — what a mistake. I never understood that. I was the youngest one in the industry and I said quite early: “I will not go to China like this”. It takes time to educate people and you need to do things step by step. If you believe that people are just buying — you’re a fool. People are not stupid. I warned many of them but nobody listened and they produced, produced, produced. Look at what happened? It was a disaster.

Ultimately, do you think this is an adjustment period for the industry?

Most brands are a bit lost. This is when you see the really good ones. When times are easy, you can sell anything — watches, books, cars, whatever. It’s another story when times are difficult. Only the good ones are still staying alive and I would like to be one of them.