ThePuristS Interview Philippe Stern
President of Patek Philippe

Introduction

When one speaks with watch collectors and aficionados one brand is consistently singled out as being "the Rolls-Royce of watches." Like the esteemed automobile manufacturer, it is a name that has become synonymous with perfection, exclusivity and the finest craftsmanship. The company is Patek Philippe, and its history offers a compelling insight into how this unique, family-held watch company has dominated the Swiss watch industry for over 160 years.

One has to wait until the finacial crisis of the 30s to witness the arrival of the Stern family at Patek Philipe.

The outbreak of the world financial crisis in 1929 and the ensuing drop in sales of highly priced watches forced the company to look for a financially sound majority stakeholder. An offer by David LeCoultre, a movement manufacturer from Le Sentier in the Vallee de Joux was turned down. Patek Philippe was finally sold to Charles and Jean Stern, who owned Fabrique de Cadrans Stern Freres, the company that exclusively supplied dials to Patek Philippe. A new general manager, Jean Pfister, was hired. Pfister's first move was to re-start the manufactuer of in house movements. For the first time in years, Patek Philippe was able to control every aspect of its production and under Mr Pfister's management sales picked up and the company's financial health gradually improved.

In 1958, Henri Stern who had spent over 20 years in charge of the American market was recalled to Switzerland, to replace Jean Pfister as President and Managing Director of Patek Philippe. Henri Stern's contribution to the success of Patek Philippe was to allow the company to grow, without compromising its founding principles. Under his watchful eye, the company introduced such models as the Nautilus and bravely weathered the industry's economic crisis of the 70s and 80s. Further advances were made in the development of new movements. One such breakthrough was the 240 Caliber, a self-winding movement featuring a micro-rotor that allowed Patek's designers to produce flat automatic wristwatches.

In 1990, Henri Stern stepped down as President of Patek Philippe to enjoy a well-deserved retirement. Since then, his son Philippe Stern, who began working at Patek Philippe in 1977, has been responsible for overseeing the company's business activities. Philippe Stern has proven himself to be a highly capable, responsible executive, introducing successful models such as the World Time, the Annual Calendar or the 24 ladies watch and many others. In addition, Patek Philippe consolidated its many workshops throughout Geneva, moving into a new state-of-the-art headquarters in 1996 situated in the Genevan suburbes of Plan les Ouates.

Mr Philippe Stern granted The¨PuristS.com this interview in late 2003 and openly shares his views not only on Patek Philippe but also the watch industry.

The Interview

TP: Can you explain to me the Patek Philippe mystique?

PS: Since 1839 Patek Philippe has continuously perpetuated the traditional art of Genevan watchmaking. We are an independent manufacture, which enables us to have total autonomy in our creativity and therefore to conceive, develop and manufacture what all specialists agree on being the best watches in the world. These values in the long term: meaning its historical assets (awards and recognition), its contribution to watchmaking history (innovation), the continuity in its image and philosophy as well as the quality and exclusivity of its timepieces throughout time are according to me the intrinsic values which are at the base of the "mystique" that surround the brand. Furthermore, our horological excellence allows us to surprise the watchmaking world by creating exceptional timepieces such as the Caliber 89 (note: 33 complications) or the Star Caliber (note: 21 complications).

(Caliber 89)

TP: What is the reason for which a client will prefer a Patek Philippe rather than another brand?

PS: I think that our different brand values make us unique. By brand values I mean, tradition, innovation, technical and aesthetic qualities as well as exclusivity and timeless designs. The purchase of a Patek Philippe is rarely impulsive, it usually is a well thought out event based on the thorough knowledge of the brand and its products.

TP: How can you explain that Patek Philippe is known and admired even by people who are not horology enthusiasts?

PS: We try to follow the footsteps of our founders and create the most beautiful watches in the world. Furthermore, Patek Philippe has acquired a position of reference in the watchmaking industry. Finally, the brand's communication efforts, the Patek Philippe Museum which is open to the public, as well as the world record prices reached at auctions during the past 10 years have certainly contributed to Patek Philippe's aura before a larger audience.

TP: You were talking about prices reached at auctions. How do you explain this?

PS: The prices reached by Patek Philippe watches at auctions are the results of the brand's values and reference position since its foundation which answer the collectors' expectations meaning rarity, quality, authenticity and variety of style. For collectors, Patek Philippe is the only brand that offers such variety of exceptional timepieces covering over a century and a half. Furthermore, we guarantee the restoration of pieces produced since 1839. Finally, in a context of unstable financial markets, the number of collectors and investors in vintage timepieces is rising. We have noticed that during the past 10 years, due to the evolution of horological culture, which covers all the regions in the world, new collectors and enthusiasts have joined the ranks of traditional collectors, such as people who work in the virtual or ephemeral activities and who discover a passion for the world of timeless products having a real value.

(Cloisonné enamel dial watch from the 50s)

TP: Is this considered as being positive for the brand? Subsequently don't you think that certain clients buy current production models more as an investment rather than for the "love" or "respect" they have for the brand?

PS: The global results of the different world records for Patek Philippe timepieces is very positive for our image and reinforces the trust our existing or potential clients can have in us. Some clients may be "investing" in our timepieces for more rational rather than emotional reasons. We don't encourage this, we try to push the emotional factor as you can see in our communication campaign.

TP: What is the identity of the brand compared to the other haute horlogerie brands?

PS: We are an independent family run business whose philosophy is tradition and innovation, and this for the past 160 years. This has enabled us to become and stay the leader of the haute horlogerie segment.

TP: For the past 3-4 years large watch concerns have had a bulimia of brand acquisitions. Can this have, or has it had, any consequences on your distribution network?

PS: This has not had any negative effect on our distribution network; on the contrary, it has had a positive effect and we have strengthened our relationship with our retailers. We have about 600 points of sale in 70 countries. A big part of our dealers are independent family run companies with whom we have been working with for a very long time and they share our philosophy and values and have an in depth knowledge of our products. They are always located in the most exclusive areas and have the best clientele contacts in their region. We only have two boutiques in our name, for historical reasons, our salons in Geneva on the rue du Rhone and in Paris on the Place Vendome.

TP: What is Patek Philippe's position as an independent brand in this new landscape?

PS: We have reinforced our position and are now even more exclusive! Patek Philippe's independence allows us to have a complete long-term creative autonomy without being limited by marketing or return on investment constraints. If we were part of a concern this strategy would be difficult to conceive. This independence gives us a unique position and reinforces our success as well as the confidence of our clients who seek exclusivity and real value.

TP: Do you want to develop the company by purchasing other brands that could complete your products or create a new more "affordable" brand (ex: Rolex/Tudor)?

PS: No, it is not part of our strategy. We try to concentrate on what we do best to maintain or even reinforce our position as market leader. It is an important challenge for us and we do not wish to dilute our forces.

TP: In the past decade you have somewhat slowed down the production of very complicated pieces and concentrated on small complications (power reserve, moonphase, annual calendars...). What is your strategy here?

PS: We have not slowed down the production of complicated pieces, on the contrary. It is a domain where we excel and try to constantly reinforce our position with the creation of milestone pieces of true technical challenge such as the Star Caliber, Sky Moon Tourbillon or this year with the 10 day Tourbillon. Parallel to the exceptional complications we have in the past decade created new more affordable complications which are in line with today's needs such as the Annual Calendar, the World Time or the Travel Time. This has enabled us to offer interesting technical timepieces to a larger audience beyond the habitual circle of amateurs of complications. This line of products has met a huge success from new clients as well as our more traditional clientele.

(Ref 5110 World Time)

TP: The "24" has been a huge success; will you continue to develop the women's wristwatch market?

PS: The Twenty-4 was launched in 1999 with a goal to reinforce our market share in ladies watches. As a traditional haute horlogerie brand, we want to have modern active women who wish to invest in a prestigious timepiece to consider Patek Philippe as a brand that can offer them what they are looking for. The launch of the Twenty-4 was a huge success, before its launch the men's vs. ladies model ratio was 70%/30% and one year after its launch the ratio was 55%/45% which was our primary goal.

We believe that the market for women's timepieces has a strong development potential for Patek Philippe and we wish to reinforce it.

TP: With the 5070, you seem to have followed the "extra large" watch trend, however the majority of your traditional models are still relatively small compared to others on the market. How do you see the size of your timepieces evolve?

PS: The design of our watches is the result of a style combining the traditional and timeless spirit of our classical and historical timepieces with contemporary spirit. Our collections are therefore under constant evolution, which can also be seen by the increase of the case sizes of our classic models such as the Calatrava or Gondolo. But this is not a revolution, just an evolution. We do not follow trends but constantly evolve in a linear manner.

TP: Can you please explain the creative process of a new timepiece? Are you personally involved in the choice of complication, movement, design etc...?

PS: I am personally involved in the creative process as to design and technical development. Many sources for development ideas exist, either on the basis of my suggestions or on the basis of the propositions made by the R&D and Creations department or even on the basis of information coming to us from our retailers regarding the trends and expectations of the market.

TP: Of what piece (from your regular production) created during your presidency are you the most proud or satisfied?

PS: I don't have a favorite timepiece. As I said before, I'm involved in the creative process and thus the results answer my expectations. Some products such as the Annual Calendar, the Twenty-4 or the Aquanaut who have opened new paths for Patek Philippe by the technical or design novelties are maybe among the more satisfying.

TP: Where did the pressure pushing brands to manufacture complete movements come from? From watch enthusiasts or other manufactures?

PS: Technical and financial independence is a sine qua non condition for Patek Philippe to maintain its position as leader in innovation and the maintaining of the quality of its products. This freedom in creation can not be envisaged without technical independence and may justify this new trend. This also may correspond to the expectation of certain enthusiasts but in my opinion it is not detrimental to justify such investments.

TP: There has been a lot of talk about your future inhouse chronograph movement. Can you tell us more about this?

PS: Amateurs' and collectors' demand for our traditional chronograph stays very important. On the CH 27-70 caliber (note: based on the Nouvelle Lemania movement) we have developed a perpetual calendar as well as a very sophisticated split seconds mechanism, which answer the aesthetic, qualitative and technical criteria of Patek Philippe. For us, it is the most beautiful traditional chronograph on the market, that's why new chronograph creations will not replace this movement.

When it was first launched in the 1980s, Patek Philippe's needs were limited to about 10 pieces a year and the important investments representing the conception and development of a complete traditional chronograph were not justified. At the time however, if we were to develop a chronograph caliber it would have probably been identical to the one we currently use.

Regarding the construction of a new chronograph movement I prefer not to say anything since like most of our R&D projects we prefer to keep things confidential.

(Ref 3970 perpetual calendar chronograph based on the CH27-70 cal)

TP: Who are the Patek Philippe clients apart from the fact that they need to have a certain buying power?

PS: We don't have a typical profile of the Patek Philippe client. What they have in common, whether they are men or women, is that for the great majority the purchase of a Patek Philippe is a fully thought and personal action. They are well-informed clients who appreciate and share the brand's values. Usually they are active and cultivated people who have in common a certain interest in the technological and aesthetic world. This interest is often transmitted from one generation to another from one person to another or in the tradition and tastes of beautiful objects of a particular region. This phenomenon can be found in any socio-cultural background.

The purchase of a Patek Philippe is rarely a spontaneous act or a first watch purchase.

TP: Please tell me about the philosophy behind the Patek Philippe Museum and how do you see its future?

PS: The mission I gave myself by creating the Patek Philippe Museum was to show to a large public two important collections: one relating to Geneva, Swiss and European watchmaking and enameling from the 16th to the 19th century; the other relating to the history of the brand from its creation until today, that for over five centuries watchmaking has been an integral part of the human cultural patrimony.

The Patek Philippe Museum also has as a mission to protect the most precious pieces from Geneva, Swiss and European history as to maintain alive these traditions for the new generations and hope to inspire careers in watchmaking and artworks in general.

The Patek Philippe Museum is exclusively dedicated to watches and enameling, it presents a global and unique vision of 5 centuries of development though a collection of about 2000 pieces amongst the most prestigious and rare and most important in a perfect condition. Its future is linked to its role as a guardian for future generations and I hope it to play a model role in the world.

TP: What watch are you wearing? Do you also wear pieces from other brands?

PS: I'm wearing a perpetual calendar wrist watch made by Patek Philippe in 1943 that was given to me by my father, who passed away a little over a year ago. I don't wear timepieces from other brands.

TP: Are you a collector personally?

PS: Yes, as the Patek Philippe museum can witness.

TP: Are there any differences from one market to the other? What is Patek Philippe's presence on the international markets?

PS: The expectations and tastes of our clients are quite similar from one market to the other. The differences can come from the horological culture that can vary from one part of the world to the other.

Our presence depends on a traditional distribution network with about 600 points of sale selected in over 70 countries. Our sales are about 45% in Europe, 20% in the USA, 30% in Asia and 5% other markets.

TP: Are there markets that you will be privileging in the future?

PS: We will continue to privilege our traditional markets, established over the long term but we keep an eye on the emerging markets.

TP: What is your vision of the brand for the next 5-10 years?

PS: We wish to reinforce Patek Philippe's image of exclusivity, which result from its independence, its history and its long term investments in terms of innovation quality, craftsmanship, aesthetic perfection as well as in communication. We want to keep a homogenous brand perception at an international level as a « haute horlogerie » leader but also in terms of having equilibrium of the feminine & masculine image of the brand.

TP: You mention the word "independence" quite often but to develop will you need to open to outside investors?

PS: Our independence is an essential condition of our success. Only our independence can guaranty a total creative autonomy. Today as in the future, this independence will give us a unique position and reinforce our success as well as the confidence our clients who seek exclusivity and true value, place in us.

TP: How do you see the "haute horlogerie" industry today and how do you perceive its future?

PS: I think that brands who will respect quality criteria and who will innovate will have a bright future.

TP: In what way has the renaissance of the German watchmaking industry impacted the Swiss watchmaking industry?

PS: In my opinion it has not only brought a healthy and interesting competition but also a complementary offer.

TP: What is your perception of internet watch discussion sites?

PS: It shows the great interest the public has for "haute horlogerie". For us it is a superb recognition of our efforts and a motivation for the future. Its also a precious source of information and learning for the aficionados.

TP: Do you have anything special you would like to say to the community members of ThePuristS.com ?

PS: Thank you for your passion and your support of la Belle Horlogerie (fine horology).

TP: Thank you!

On behalf of ThePuristS community I would like to thank Mr. Philippe Stern for his time.

Best,

Alex G