December 9, 2022

Under his reign, Thierry Stern saw a sports watch morph into a hyped commodity. I am, of course, referring to the basic steel Nautilus. When the hype was in its early days, Stern tried to deal with the annoyance by raising the price of the watch to an unrealistic level. But that didn’t scare off anyone. It led to the rather Draconian measure of canceling the watch altogether. Stern now focuses on a younger target audience by treating them with models that are sporty, retro, complicated watches in precious metals. It’s a collection befitting Patek 2.0, a contemporary watch brand firmly based on tradition. Will this approach be successful — is Thierry Stern securing Patek Philippe for the next generation? — or will it, again, stir up rumors about the Stern family selling the most prestigious watch brand in the world?

Maybe it’s an oversimplified statement, but in a sense, Patek Philippe didn’t want to become Audemars Piguet. Thierry Stern said on many occasions that he didn’t want Patek Philippe to be defined by just one model, the Nautilus. Audemars Piguet, on the other hand, seems to be very happy to endlessly sail the wave of the Royal Oak. Yes, in the past there were efforts made to counterbalance the Royal Oak. The brand tried with the oval Millenary back in the ’90s and ’00s and more recently with the Code 11.59. Did those attempts work? I don’t think so. Even the Offshore versions of the Royal Oak seem to be pushed to the background by the overwhelming power of the original “RO”. And does anyone remember the Jules Audemars and Edward Piguet collections? It looks like AP surrendered under the pressure of the demand, is at peace with that, and is now comfortable in being more or less a one-model brand.

Securing Patek Philippe for the next generation — Is it up to the Stern family, a conglomerate, or a foundation?

Thierry Stern didn’t want to fold under the demand for steel Nautilus watches and decided to cease production of them altogether. There are strong rumors of a 5811G or 6711G (the reference numbers are an educated yet slightly wild guess, but the “G” is pretty certain and stands for “Gris” in French, referring to a case in white gold) coming out later this month because Stern did not cancel the Nautilus altogether. He just wanted to cut away the versions that, in his view, hurt the brand’s image. For Stern, the image of Patek Philippe is one of a tradition of creativity and innovation. And that’s what he would like people to see, know, and experience.

See also  Patek Philippe Nautilus Vs. Vacheron Constantin Overseas

For flippers, the new brand strategy is a blow. For passionate collectors, it’s the opposite. Long-term Patek collectors and also a new generation of fortunate fans who appreciate Haute Horlogerie are very pleased. Not just because of the new watches that are coming out, but also because Thierry Stern is very actively in touch with the Patek clients.

Patek Philippe

Patek Philippe Nautilus Ref. 5711/1A — Image courtesy of Xupes

Back to reality

Having celebrities wear Tiffany-dial Nautiluses on Instagram and TikTok is not what Thierry Stern has in mind when he thinks of presenting Patek Philippe to the world and preserving the brand image for future generations. Having a human connection with clients is what he is after. Just as his father Philippe hand-picked clients for the most complicated and exclusive creations, Thierry acts as a gatekeeper of the Patek Philippe universe. He does so by engaging in conversations, listening to the needs and desires of existing and potential clients, and making sure they experience the best possible service of the brand. But he also does this to keep them onboard for a lifetime and to make sure they don’t resell an exclusive watch as soon as they secure one.

Calatrava 5326G and 5226G

What will the new basic Nautilus look like and do?

It will be interesting to see what the Nautilus 5811 or 6711 will be and look like. In terms of watchmaking evolution, it should have a successor to the trusted caliber 26‑330 S C, a 27 × 3.3mm automatic movement bearing the Patek Philippe Seal with a central rotor, Gyromax balance, and Spiromax balance spring. The power reserve of the 212-part movement, which beats in several current creations like the Aquanaut 5167 and the new Calatrava 5226G, is a fairly outdated 35–45 hours. A new three-hand Nautilus deserves and, frankly, should be equipped with a new, revolutionary, high-tech “propulsion system”. Maybe something derived from the movement inside the Aquanaut Travel Time 5650G Advanced Research.

Aquanaut Travel Time 5650G Advanced Research

But maybe it will be even more interesting to see what kind of effect the sporty three-hand watch will have on the market. That is something that we could monitor instantly. Something that will take a bit more time to answer is the question of whether a new basic Nautilus — albeit in gold and with a price of, let’s say, €60,000, making it “cheap” in comparison to the steel Nautilus on the gray market — will again be the sole focal point. Will such a watch once again take away the spotlight from the creations that Thierry Stern wants to shine brightly?

See also  Patek Philippe Ref. 5270 In Titanium For A Good Cause

A blessing and a burden

The Nautilus is both a blessing and a burden for Thierry Stern. A burden he almost chose not to carry. It’s time for a few inside rumors from long ago. When Philippe Stern, the third-generation leader of the brand, was ready to pass the baton to the fourth generation, Thierry was said to be in doubt. And because of that, Swatch Group entered came into the picture. If Thierry had declined to take over the family business, the Hayek family would have gladly stepped in. It never happened. Thierry assumed leadership, and over time, he grew in his role as President of the company. But what about the fifth generation? Thierry has said time and time again in interviews that he never pushes his now-19 and 20-year-old sons to follow in his footsteps; if they want to run the family business, the desire must come from them.

Patek Philippe

Philippe Stern and his son Thierry, who took over as president of Patek Philippe in 2009

Is succession a sure thing?

The big question regarding continuity is this: can we count on the fifth generation to take up the mantle? Not taking over the business would not have serious negative financial consequences for the boys. Not in the least. According to Forbes, the net worth of the Stern family is more than US$3 billion. And apart from the cushy financial situation, the launch of a limited-edition Nautilus in Tiffany colors also didn’t answer the question of succession in a reassuring way.

The collaboration with LVMH-owned Tiffany & Co. and the fact that LVMH’s big boss Bernard Arnault was spotted playing chess with his son Frédéric (CEO of LVMH brand TAG Heuer) wearing a Nautilus 5740 Perpetual Calendar with the characteristic Tiffany dial led to the persistent rumor that Stern was ready to sell the family business. According to Bloomberg, Patek Philippe could be worth US$10 billion. It is an astronomical number, but my guess is that Arnault would be willing to pay that amount to acquire the most prestigious watch brand in the world.

“The Rolex Way” could also be Patek’s way

In several interviews, Thierry Stern tried to kill the rumors by saying that selling the company was not an option. Stern declared that he already had enough money. Furthermore, he made it clear he wasn’t working for money but out of a passion for the brand Patek Philippe. Still, just as a Patek Philippe watch is a prized possession for some, the brand itself would also be one for some of the richest people and companies. How to fend off the hungry wolves, then? How should Stern secure the integrity, soul, and image of the brand when succession is the weakest link in its history?

See also  Omega, Grand Seiko, Patek, And More

The answer could very well be “The Rolex Way”. And by that, I mean starting a foundation, just as Hans Wilsdorf did in 1945 to honor his late wife. In doing so, he also very much secured his legacy — the Rolex brand. The Hans Wilsdorf Foundation is a private Swiss foundation that continues to be the exclusive owner of Rolex.

Patek Philippe

Securing Patek Philippe for the next generations — The Stern Foundation

The Stern Foundation could be the exclusive owner of Patek Philippe. That would mean it would allocate much of its profits to charity and social causes. Now, that doesn’t mean that the company would have no interest in making money and seeing good numbers. But because there would be no shareholders who may want to have a say in how the company operates — something that would play a major role if, for instance, LVMH added the brand to its portfolio — Patek Philippe could still be run in the spirit of a family business. There would be no pressure to keep growing faster and faster or to constantly increase sales and profits. The advantage of being a non-profit entity is that Patek Philippe could continue to play the long-term game with a long-term strategy.

Patek Philippe Aquanaut 5167A — Picture courtesy of Fifth Wrist

Any more thoughts or predictions regarding Patek Philippe?

After looking at things on a macro scale, it’s good to come back to the micro side of things again — the watches. I mentioned the possible launch of the Nautilus 5811 or 6711 in white gold before. And while I’m wrapping up my thought piece, I would also like to remind you that the Aquanaut is celebrating its 25th birthday this year. What a great moment to present a commemorative precious-metal jubilee edition. But it’s also the best moment to announce the discontinuation of the steel Aquanaut 5167, don’t you think?

And apart from a new steel Nautilus and the possible cancellation of the steel Aquanaut, what do you think of the new retro-inspired Patek Philippe models in precious metals? Do you think young, complicated, and exclusive is the way to go? You can, of course, also share your thoughts regarding Patek Philippe taking “The Rolex Way” in the comments below.

Find and follow me at Lex Stolk • Instagram