Patek Updates

[KarlS]

Just picked up the 5711 and thought I should probe a bit about sales and how much softening they were seeing:
a). Production will reduce to about 50000;
B). They have been asked to provide purchasers names on most preorders.
C). Attempt to clamp down on grey market and certain models will have the warranty cars produced by PP with the buyers name in it
D). Possibly holding warranty cards for 5 years on certain models - not sure how that will work??
E). Nautilus 40th will be underwhelming. PP just had 175 and 40 not that important. They trying to do nothing but consumers expect a lot so will be 2 models but expect to be underwhelmed. A request for a 5711P as an anniversary piece declined by Geneva already.
F). PP is reducing dealers (guess on lower production cake slices need to be maintained) therefore AD will be reluctant to offer discounts that could cause them to lose favor or their franchise. Mentioned they rather lose a deal if someone can getter better elsewhere!

[texex91]

Just picked up the 5711 and thought I should probe a bit about sales and how much softening they were seeing:
a). Production will reduce to about 50000;<< From what number--did they say?
B). They have been asked to provide purchasers names on most preorders. <<What good will that do--can give any name
C). Attempt to clamp down on grey market and certain models will have the warranty cars produced by PP with the buyers name in it<<Logistical nightmare
D). Possibly holding warranty cards for 5 years on certain models - not sure how that will work??<< Never happen
E). Nautilus 40th will be underwhelming. PP just had 175 and 40 not that important. They trying to do nothing but consumers expect a lot so will be 2 models but expect to be underwhelmed. A request for a 5711P as an anniversary piece declined by Geneva already. << Not surprised
F). PP is reducing dealers (guess on lower production cake slices need to be maintained) therefore AD will be reluctant to offer discounts that could cause them to lose favor or their franchise. Mentioned they rather lose a deal if someone can getter better elsewhere!<< Hear this every year

[KarlS]

I think 60000 is the number mentioned. On the warranty cards he did mention certain models so I am going to guess it will be those hard to get pieces which are flipped. In particular the 5131 where there is huge disparity between retail and secondary market which encourages flipping. I don't believe you can eliminate the grey market when you operate an allocation system and have huge retail margins. Inventory you paid for sitting idle costs money. They are a small dealer and they have to maintain a minimum stock of 130 Rolexes. Never allowed to drop below that. Some larger AD have to keep 300 and Rolex allocates good models along with a pile of models that just don't move.

[martinr]

Thierry Stern is a nice guy and a great rep for the brand but they need a real CEO. The grey market and warranty cards are the least of their problems in my opinion.

[codecow]

Their previous production was 59000 pieces with 9000 Quartz and 50000 mechanical according to Patek during my visit.

[GB-man]

Originally Posted by martinr

Thierry Stern is a nice guy and a great rep for the brand but they need a real CEO. The grey market and warranty cards are the least of their problems in my opinion.

Indeed.

[texex91]

Originally Posted by martinr

Thierry Stern is a nice guy and a great rep for the brand but they need a real CEO. The grey market and warranty cards are the least of their problems in my opinion.

Well said.

[cervantes]

Originally Posted by martinr

Thierry Stern is a nice guy and a great rep for the brand but they need a real CEO. The grey market and warranty cards are the least of their problems in my opinion.

Perhaps a new head of design while they're at it

[AckAck]

Great update Karl! Thanks.

[Russell996]

Originally Posted by texex91

D). Possibly holding warranty cards for 5 years on certain models - not sure how that will work??<< Never happen
[/B]

This is already happening in the UK - papers held for 2 years on some models supplied this year.

[jon_jon]

Very nice update. I think some of the changes are quite reasonable.

I wonder what kind of pre-orders they want client information on. For LE and application pieces (like the 5131), they already have the clients information from the AD. Are they going to track owners of common pieces like the 5711/1A or 5712 if someone pre-orders them?

BTW, isn't Sandrine Stern the head of design at Patek or does she only head the ladies' collection?

How can an AD logistically hold the Certificate for two years? Are they holding the certificate on application pieces? What if the watch needs servicing and the service center asks for a copy of the Certificate? What happens if the AD loses their Patek dealership license during that time period, especially since Karl mentioned that they are reducing AD numbers?

I also heard that the 40 year Nautilus Anniversary will be limited to a couple of pieces.

[texex91]

Originally Posted by Russell996

This is already happening in the UK - papers held for 2 years on some models supplied this year.

To be honest holding them for any period would be unacceptable IMHO.

[Greenp]

It seems like you're going to have to "lease" the watch for a 5 year period and at the end of the 5 years you own it.
They did say that "You never actually own a Patek"
Do all these unusual/strange ideals seem like a desperate attempt to keep prices artificially high?

[martinr]

Am I missing something here? First they ramp up production, now they're cutting back, popular models are almost impossible to get for some, they're making it a pain to buy a watch with the certificate being held etc. My AD makes a big deal about not giving all the packaging that comes with the watch, he now has to fill out the registration cards and send them in instead of letting the customer do it, he peels off all the stickers with product numbers. Send in a watch for warranty repair and you get a form letter saying it's been received, no other information. When you get it back is anyone's guess. QC is getting worse by the day and no apparent plan to improve and Patek is worried about flippers? They can't live off their reputation forever.

[enjoythemusic]

Originally Posted by Greenp

It seems like you're going to have to "lease" the watch for a 5 year period and at the end of the 5 years you own it.
Do all these unusual/strange ideals seem like a desperate attempt to keep prices artificially high?

Scorched Earth policy? Not good. Truly saddens me to see what's going on with Patek. Let us hope this is all just speculation, because if indeed that's their best plan....... time to hire some competent consultants.

[RussW]

Thanks for the update Karl. Re point B, I was offered a 5524 earlier this year and Patek wanted to complete the paperwork with my details, had I bought it.

[lapince]

If I get this right, they want when you buy a watch to not give you the papers before 5 years??? They are nuts, there is no way if I buy something that I will let the company which sells it to me keep the papers for 5 years.
All this is BS, they are worried about flippers? LOL how about being worried about worse and worse QC, about having the longest service waiting times in the business, seems to me it's a little more important than what they are worried about...

[lapince]

If I get this right, they want when you buy a watch to not give you the papers before 5 years??? They are nuts, there is no way if I buy something that I will let the company which sells it to me keep the papers for 5 years.
All this is BS, they are worried about flippers? LOL how about being worried about worse and worse QC, about having the longest service waiting times in the business, seems to me it's a little more important than what they are worried about...

[jon_jon]

Originally Posted by RussW

Thanks for the update Karl. Re point B, I was offered a 5524 earlier this year and Patek wanted to complete the paperwork with my details, had I bought it.

Perhaps I am being mistaken, but wasn't it always the official policy of Patek to have the AD complete the name and address of the new owner on the Certificate before the owner leaves the store?

I know there are some open papers floating around, but I thought open papers are usually an arrangement that the AD and resellers have when they sell watches through the back door.

I certainly don't have all the inside knowledge of how people get open paperwork and maybe if you are a member of the royal family or a billionaire with hundreds of Patek watches in your collection, you can dictate to Patek what the acceptable terms of sale are. But for regular watch enthusiasts like us on this forum, I think this just sounds like business as usual.

[RussW]

Originally Posted by jon_jon

Perhaps I am being mistaken, but wasn't it always the official policy of Patek to have the AD complete the name and address of the new owner on the Certificate before the owner leaves the store?

I know there are some open papers floating around, but I thought open papers are usually an arrangement that the AD and resellers have when they sell watches through the back door.

I certainly don't have all the inside knowledge of how people get open paperwork and maybe if you are a member of the royal family or a billionaire with hundreds of Patek watches in your collection, you can dictate to Patek what the acceptable terms of sale are. But for regular watch enthusiasts like us on this forum, I think this just sounds like business as usual.

Hi Jon, I was referring to Patek completing my details in Geneva, before the watch even got to the AD.

[KarlS]

Originally Posted by RussW

Thanks for the update Karl. Re point B, I was offered a 5524 earlier this year and Patek wanted to complete the paperwork with my details, had I bought it.

Correct the 5524 whimsy not an application piece is an allocation piece and they will complete the details. I had already been contacted on
My 5930. To be honest if it means more watches become available to
People who get to wear them versus double sealed in the safe, I am for it! Many of us don't have multi million kudos with dealers and be nice if the genuine user got to get one.

[Passionata]

TS said that Far East is a difficult market he has realized what s happening if you are too excited about the figures but don t care about the conditions.He was screwed on several ways and now he tries to get back in control,won t be easy i guess.

[Russell996]

Originally Posted by jon_jon

How can an AD logistically hold the Certificate for two years? Are they holding the certificate on application pieces? What if the watch needs servicing and the service center asks for a copy of the Certificate? What happens if the AD loses their Patek dealership license during that time period, especially since Karl mentioned that they are reducing AD numbers?

I also heard that the 40 year Nautilus Anniversary will be limited to a couple of pieces.

The AD doesn't hold them, they are retained by Patek. The owner and watch are registered so no issue with servicing.



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[enjoythemusic]

Originally Posted by Russell996

The AD doesn't hold them, they are retained by Patek. The owner and watch are registered so no issue with servicing.

The more i think on this, it could be good because sales may plummet to low levels. Due to producing far fewer units per year, this then frees up their ability to service timepieces with employees servicing versus making new products. Since Patek is a private company, this might be a good step 'backwards' in overall sales to then get back to producing consistent high quality timepieces while also freeing up their workforce to provide timely service.

Added benefit: Even so-called 'rare and/or application' pieces are easy to buy in NYC and other places (sealed/as new) on the secondary market. This might reduce that as well.

Sure, let the experiment begin.

[RUK]

You know what. I'd prefer for things to come back to sanity. The last 3 years were crazy and the Asian market seems to have caused it. So it makes sense to correct it. I don't see how these changes shouldn't bother anyone who's buying a watch to own and use for a long time.

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[masyv6]

Originally Posted by texex91

To be honest holding them for any period would be unacceptable IMHO.

Agreed entirely.

[lapince]

In any case holding papers would clearly be conditional selling, which I think most buyers would hate, I think it would do more harm than good to Patek if they decided to go that way...
That would clearly get on my nerves if I was told "we sell you the watch but will give you the paperwork in XXXX years" WTF?????

[Russell996]

Originally Posted by lapince

In any case holding papers would clearly be conditional selling, which I think most buyers would hate, I think it would do more harm than good to Patek if they decided to go that way...
That would clearly get on my nerves if I was told "we sell you the watch but will give you the paperwork in XXXX years" WTF?????

I disagree!
Possibly I'm in the minority in taking this view but this policy (which they are enforcing) is aimed at supporting the 'true' customer and removing the speculator. The pieces this process applies to are in huge demand, can sell for large premiums and the only people who will loose with this policy are the guys who are simply out to make money and will now be deterred (hopefully). How is to anyone's advantage for a unobtainable watch to show up on Chrono24 unworn and still fully sealed at a massive markup. These pieces deserve to be worn by watch lovers purchased at retail. I waited 8 years to get my piece and went through 2 vetting interviews. Anything to reduce the number of unworn rare pieces gets my vote.



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[Tony64]

Originally Posted by cervantes

Perhaps a new head of design while they're at it

Agree

[Tony64]

Originally Posted by Russell996

I disagree!
Possibly I'm in the minority in taking this view but this policy (which they are enforcing) is aimed at supporting the 'true' customer and removing the speculator. The pieces this process applies to are in huge demand, can sell for large premiums and the only people who will loose with this policy are the guys who are simply out to make money and will now be deterred (hopefully). How is to anyone's advantage for a unobtainable watch to show up on Chrono24 unworn and still fully sealed at a massive markup. These pieces deserve to be worn by watch lovers purchased at retail. I waited 8 years to get my piece and went through 2 vetting interviews. Anything to reduce the number of unworn rare pieces gets my vote.



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Ok, I realize this is probably a stupid question, but can someone explain to me why Patek doesn't simply raise the price of their 5131 to the current grey market price and lower the price on their less in demand models to more reasonable pricepoints?

Why play such games with the certificates and AD punishments? Adjust the retail price to coincide with market price. The flippers will go away if you don't feed them, right?

People willing to spend the money would legitimately get the watch they want -an end to the gamesmanship. Truth is though, I suspect that Patek secretly enjoys this added level of exclusivity that the grey market creates and it actually helps them to sell their more accessible pieces at a healthy profit.