Privately-owned Patek Philippe does not share details of its watch production beyond a widely used figure of 70,000 units in total, a number that is said to rise and fall very little.
Steel watch production is capped at 25% to 30% of its total — around 20,000 units — and Ladies’ Twenty-4 timepieces are thought to account for the largest proportion of that figure.
The company has never said how many steel Nautilus watches it makes, but it is certainly nowhere near enough to satisfy demand, which is why customers and authorised dealers are emotional wrecks over how they can get their hands on them.
Recent conversations with executives at Bucherer, London Jewelers, Hamilton Jewelers and Watches of Switzerland have all told the same story: demand for the Nautilus (along with the Aquanaut, Audemars Piguet Royal Oak and Rolex’s steel sports models) is off the scale.
The world may be begging for more steel Patek Philippe watches, but the company’s president, Thierry Stern, is not going to turn on the taps. In an interview with Hodinkee’s Joe Thompson, he said that supply would remain limited, despite — or perhaps because of — prices on the secondary market reaching double what authorised dealers are allowed to charge.
“Tomorrow, if I decide suddenly to produce 40,000 watches in steel, it’s over. You can go out of the store, and you will not be able to sell it for this price anymore,” Mr Stern says when asked about the impact of the current shortages on secondary market prices.
Patek Philippe does not want to be viewed as a steel sport watch brand. Today’s demand for its most affordable steel watches could cool, and the company wants its precious metal Calatrava to be the flagbearer and cash cow.
“Many years ago, IWC was producing gold watches. Then they had problems and they fabricated everything in steel. They tried to come back to gold, and they could never do it. Once you lower the price with steel, it is very hard to come back,” Mr Stern tells Hodinkee.
“I don’t want this with Patek. I have to be very tough on the quantity because I don’t want to see steel taking over the lead in the whole collection in terms of material. So we have to be vigilant.”
Mr Stern recognises the strain this is putting on Patek Philippe’s authorised dealers, which are desperate for higher allocations. “That’s not good, that’s for sure. It is not easy,” he says. “Retailers and even our own staff are pushing us to have more because the demand is there.”
Rather than increase production of watches so that its authorised dealers stood a better chance of keeping their display cabinets stocked, Patek Philippe reduced the number of accounts across the world.
“I had no choice. I didn’t want to increase the production. The only thing I could do was to decrease the number of retailers, so that the others could have enough stock.”
Sixty our of 160 authorised dealers were culled in the United States, alone.
Pressure for more watches is having a small effect, Mr Stern reveals, but anybody dreaming that the Nautilus drought is about to end needs to think again. “I am going up with the production, but drop-by-drop. As it is a percentage [of total production], it’s a slightly higher number,” he tells Mr Thompson.
With no Nautilus watches in the vitrines of authorised dealers, customers unwilling to endure a decade-long wait on a retailer’s list are turning to the secondary market, where prices are soaring.
“I think it’s a trend that’s going to stay for quite a while,” Mr Stern says. “The premium will always stay, that’s for sure,” he says. “Because you have more and more people who are able to buy the product.”
- With thanks to Hodinkee for granting permission to use quotes from Mr Stern. Read the full article here.