Patek Philippe announced on Monday that it is making 170 special versions of its most popular watch in a partnership with Tiffany & Co., a launch that could spark a buying spree among wealthy watch collectors.
The surprise move comes less than a year after Patek discontinued the famous watch, known as the Nautilus Ref. 5711, causing demand and prices to skyrocket.
Patek said it makes 170 ref. 5711 watches with a Tiffany blue dial which will be sold in selected Tiffany stores. The watch was created to honor the 170-year partnership between the Swiss watchmaker and Tiffany, as well as the new ownership of Tiffany under the French luxury giant LVMH, said Patek Philippe.
For Tiffany, having the chance to sell what will arguably become the world’s most sought-after new watch will add sparkle and marketing sparkle to the jeweler as he undergoes a makeover under LVMH and its boss, Bernard. Arnault.
“It was my little gift to congratulate you on purchasing Tiffany,” Patek CEO Thierry Stern told CNBC. “For me it was pretty clear that I had to choose something unique and exceptional. This really is the last lap for this watch.”
Watch enthusiasts around the world thought the last round was in January. Amid record demand for the best luxury watches, Patek unexpectedly announced it was halting production of the Ref. 5711, claiming that the attention and demand for the watch has gone too far. The stainless steel watch, launched in 2006, rose to fame thanks to social media. Among wealthy watch enthusiasts, it had become one of the ultimate wrist trophies – a mixed blessing for a company that prides itself on its wide range of creative and complicated watches and exquisite designs in gold, platinum and others.
“I still don’t know why all of a sudden the success [of this watch] came so fast and went so high, ”Stern said. “But what I do know is that I don’t want to be a one-product business. That’s why I stopped the 5711. We’ve done enough.
Many watch buyers were furious. Obtain a Ref. 5711, which cost around $ 30,000, already involved long waiting lists and opaque reseller terms, even for Patek’s preferred customers. Now buying a new 5711 would be impossible. Second hand price Ref. The 5711 – already subject to speculation – soared to over $ 150,000 online. One sold at auction at Sotheby’s for the equivalent of $ 484,000 in 2020.
Patek Philippe watch
Courtesy of: Patek Philippe
Stern’s decision to make the 5711 finals for Tiffany came from the deep history and mutual values of the two companies, he said. In 1851, Tiffany became Patek’s first official business partner in the United States. During his first business trip to the United States, Antoine Norbert de Patek met Charles Lewis Tiffany in New York. Today, Patek watches are sold in select Tiffany boutiques and Patek watches are co-stamped with “Tiffany & Co”. sell for big bounties.
Both companies are also family-controlled and intend to pass leadership on to subsequent generations. The Swiss Stern family have owned Patek since 1932, while LVMH is controlled by Bernard Arnault, the third richest person in the world. Bernard Arnault has been exploring for years the potential of adding one of the four major watch brands – Rolex, Patek, Audemars Piguet and Richard Mille – to its stable of luxury brands, which already includes Tag Heuer, Zenith and Hublot. Stern said he had met Bernard Arnault in the past and told him “we are independent and are not interested in selling”.
Stern, however, wanted to offer Bernard Arnault something special to commemorate LVMH’s $ 15.8 billion deal to buy Tiffany. He held a virtual meeting to present Ref. 5711 at LVMH. It included Alexandre Arnault, the 29-year-old descendant of the family who was recently appointed Executive Vice President of Products and Communications at Tiffany.
“First of all, I told them, ‘Gentlemen, please stay seated because you’ll be quite surprised,'” Stern said. “As soon as I showed them the pictures, they were very excited.”
In addition to the special Tiffany blue color, the watch will have the “Tiffany & Co”. stamp at 6 o’clock, associated with the Patek Philippe stamp at 12 o’clock. The sapphire crystal caseback bears the commemorative inscription “170th Anniversary 1851-2021 Tiffany & Co. – Patek Philippe”. Stern also created a little “surprise” on the back that he will let the owners discover.
“I put something secret at the back of the watch,” Stern said. “It’s pretty funny.”
For Tiffany, Patek’s “gift” means the retailer can give its most valuable customers the holy grail of new sports watches and generate excitement in its stores. Alexandre Arnault said in a statement that Tiffany was “proud to present this special edition featuring Tiffany Blue dials to our most demanding customers.”
But it also comes with risks. Tiffany will have well over 170 VIP clients with the money and the desire to buy the watch and most will be turned down. It will cost around $ 52,000 and will only be available at Tiffany stores in New York, Beverly Hills, California and San Francisco that carry Patek Philippe.
“I had to warn Tiffany and I said ‘listen, this is a fantastic gift,’ Stern said. “But it’s also poisonous because you will only have 170 pieces and the choice to sell it to the end customer will be yours. There will be 170 people who will be very happy and the rest will be unhappy.” Hope they sell it to the right people. This is really the most important to me. When you make such a watch, it has to go to the right person. “
The Ref. 5711 is the most extreme example of a greater imbalance between supply and demand in the luxury watch market. Soaring stock markets, crypto wealth and the flood of government stimulus have created record wealth, as a whole new generation of young buyers began to educate themselves about high-end watches and shop online. during the Coronavirus pandemic.
Yet Patek Philippe, Rolex, Audemars Piguet and Richard Mille – all privately owned – have not significantly increased their production. According to a report by Morgan Stanley, Rolex sold 810,000 watches last year, Audemars 40,000 and Richard Mille 4,300. The figures were lower than usual due to pandemic closures.
Patek typically manufactures around 60,000 watches per year. Like other brands, the company claims that it cannot significantly increase production without compromising quality. As an example, Stern said it takes 10 years to train a good watchmaker who can master the intricate parts and crafting of a Patek watch.
“Quality will always be at the top of my wish list,” Stern said. “I don’t need to rush, I don’t have any shareholders pushing me. I’m not interested in increasing the quantity to have bigger numbers. I’m more interested in longevity and beauty.”
The low production of the biggest brands, however, has given rise to a large online gray market for used watches. First-time buyers who walk into a Rolex or Audemars store will usually find that the watch they want is not available, and waiting lists can stretch for years for those lucky enough to have one. make a list. So many buyers are turning to the growing ranks of online sites like Chrono24, Chronext, Hodinkee, and WatchBox that sell used watches, often at significant margins. Popular watches that officially sell for $ 25,000 or $ 35,000 go online for $ 60,000 and up.
Prices for used 5711s online now sell for over $ 120,000. It remains to be seen what the secondary price of a Tiffany model will be when it goes on sale. An answer could come next week: Tiffany will auction one of the watches at Phillips on December 11, with the proceeds going to The Nature Conservancy, a charity chosen by Arnault.