No time for crisis to affect growth

Companies cutting back is a natural consequence of the recession but one brand is continuing to stay buoyant during these tough times.

Patek Philippe, the specialist Swiss watchmaker, has not been affected by the financial downturn as clients continue flocking to place orders for one of the 40,000 pieces made every year.

"People are always ready to buy pieces because it's more than a watch; it's a piece of art. They understand the difference between our watches and those from other brands; they know they are buying something that will last after their death. It just needs a little oil every three to five years like a car and it'll run 24 hours a day," says the company's Vice- President Thierry Stern.

In Dubai this week for the opening of Patek Philippe's boutique in The Dubai Mall, which is the company's largest in the Middle East, Stern explains why the company is forging ahead with new openings at a time when many stores are shutting shop. Although it has closed 100 outlets over the past five years, he insists that it is due to strategic rather than financial reasons.

"We needed to have the full range in each store but we couldn't do that as we didn't have enough stock so we decided to close some outlets rather than compromise on customer choice," says Stern, 39, who will succeed his father Philippe as the company's President next year.

Although Patek Philippe, which only has three standalone boutiques, instead preferring to sell through partner stores, has had a presence in the UAE for 50 years, this latest boutique holds the largest collection of its watches in the country.

"The Middle East is one of the fastest-growing regions in the world for Patek Philippe's time pieces," says Stern, who joined the company in 1990.

Although many customers come back time and again, the company is finding a lot of its buyers in recent years are first timers, however, it is the dedicated ones – rather than those with deep pockets – who enjoy the benefits.

"We rarely change the hands or dial if people ask for something specific because we have to stop production of the regular ones and 200 watches will be delayed," explains Stern.

"All collections are already limited so we don't need to have an exclusive one. I'll only do it for people involved with Patek Philippe. If someone comes to me with $10 million it doesn't impress me but if they have been a collector for 10 years, know the company and are passionate about it then maybe they deserve a special dial."

Founded by Antoine Norbert de Patek and Jean-Adrien Philippe, who met in 1844, Patek Philippe is now the last independent Genevan watch manufacturer. Since it started producing its first watch with keyless winding and hands setting in 1845, the company has become synonymous with innovation. It was the first manufacturer of the split-second chronograph wristwatch and the all-electric clock.

Brothers Jean and Charles Stern bought the company in 1932 and it has remained in the family ever since. Thierry is the fourth generation of Sterns; his grandfather, Henri, was Honourary President until his death in 2002.

Thierry has two children aged six and eight so he is not yet thinking about his future but a smile spreads across his face when I ask whether they will one day take over.

"I would be happy if my children took over and I'd never push them but if they want to run it then fine. They're still young so I'm focused on their education and as long as they are happy, that's my priority," he adds.

The UAE is an important market, representing 10 per cent of company share with Stern estimating that more than 60 per cent of customers in Dubai are UAE nationals, with other collectors coming from Saudi Arabia, Iran, Russia and India.

"We have a lot of very important collectors in Dubai who understand not only the beauty of the watches but the mechanical side too. We have some collectors with more than 500 pieces and they are becoming more expert than me," he laughs.

Stern learnt his trade at the Watchmaking School of Geneva after initially studying commerce in that city. However, he did not start at the headquarters straight away but was sent to discover a specific market, Germany, where he spent close to two years with two large Patek Philippe retailers. He then moved to the United States, to spend time with one of the largest Patek Philippe subsidiaries, the Henry Stern Watch Agency in New York where he gained experience of sales, inventory management for bracelets and components, after-sales service and business relations. These days with responsibility for product development and creation he takes control of final designs, working one to two years in advance and as such is on his 2011 collection but also focusing on what he calls his 2020 vision.

"It takes me four years to develop a movement, with two years of that devoted to the aesthetics, which is why it's very difficult for me to make changes for individuals," he says.

"I couldn't run the company without knowing what is inside the watches. I can disassemble and reassemble them but I'm not an expert on the finer details."

There are 170 regular models in the collection that cost in the range of 18,000 Swiss francs (Dh58,300) and while many of these do not have a waiting list, customers have to wait between four and six years for the more complicated designs.

The Swiss man says the worst-case scenario would be if both his and his sister's children all wanted to run the company because although he would be happy for all four to be involved, he believes it is important to have just one decision maker.

"You can't split ownership because that's where the problems start [if everyone has a different opinion]," he says, adding that he doesn't need to work financially but does so for the love of it.

He also cites the Middle East as a prime example of good family business practices.

"I've learned from this part of the world because even though there are many children, just one is the head of the business and they are the one making decisions. It is a great business model."


Key Dates

1844: Antoine Norbert de Patek meets Jean Adrien Philippe in Paris

1845: Patek Philippe makes its first pocket watch with minute repeater

1868: Creates the first Swiss wristwatch, made for Countess Koscowicz of Hungary

1916: Produces the first complicated ladies' wristwatch with a five-minute repeater

1932: Jean and Charles Stern purchase the Patek Philippe Company

1956: Makes the first all-electronic clock

1959-1962: First patents for time zone watches

1989: The company creates the most complicated portable timepiece ever made, the Caliber 89 with 33 complications to celebrate its 150th anniversary

2002: Honourary President Henri Stern dies giving company President Philippe complete control

2002: Launches the Sky Moon Tourbillon, its most complicated wristwatch complete with double-face

2010: Philippe will step down and make son Thierry the company President

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