Thierry Stern, 40, is president of Patek Philippe watches, the only independent watchmakers in Geneva. The company was founded in 1839 and purchased by brothers Charles and Jean Stern in 1932. Thierry Stern represents the fourth generation to run the company, having last year taken over the presidency from his father, Philippe. His watches cost from around £10,000 to £700,000.
How’s business?
Business worldwide was quite difficult for everyone last year but it was still a very good year for us. The crisis has shown up the difference between a brand that makes a fine product and one that’s more into marketing a product. Those are the companies who’ve been really badly hurt. People still come to Patek to buy something that has a lasting value, and that’s really helped us through these more difficult times. While we had less demand for the lowest priced watches in the range, we have had a huge increase in demand for the high-end watches with ‘big complications’.
It’s interesting that in terms of production we sold fewer watches, but we actually made more money. With stocks going down, I think people wanted to buy something that was really secure, that could be easily kept and is of lasting value. The only hard thing is that I can’t supply all of them, because we only produce 40,000 watches a year.
How did the family business come about?
My family worked with Patek almost from the beginning by supplying dials. My great-grandfather bought Patek Philippe in 1932 and and since then we have maintained the same strategy — to create and develop the finest watches in the world and we hope to continue in the same way. The company was in trouble at that time, and we were not the highest bidders, but they chose to sell to my family because we had the same value and ethics. There were probably around 120 workers then. Today we have 1,300 people here in Switzerland and another 500 in offices around the world.
Where did you learn your business skills?
I went to Germany to learn about the retail side of the business and to the States to learn about distribution. I don’t think there’s any school in the world that can teach you what I learnt in the field. You need to discover things for yourself, to talk to your final customers and to the retailers, and this takes many years. So I travelled for four years, and I still travel all the time. The techniques used by retailers are always evolving so you need to keep up to date and see what other brands are doing in order to improve your own brand. Visibility is very important for us, as is our relationship with customers and retailers.
Do you intend to branch out?
No. We are known for our watches. We do cufflinks too, and we do them well, but they’re not our main business. I know that many other companies do diversify, but that’s because most of them have shareholders to please, and they’re more interested in making money. Of course, like everyone else, we need money to live, but we try to reinvest everything to improve the quality of our watches. It’s my own business, so the best thing I can do is to ensure that it is successful. That’s what I work for. If I was working for money I would do something else — I’d be a banker.
Which are your largest emerging markets?
We’ve been in Asia for many many years, but the Chinese market is our newest one. We have been working there for about five years, so we’re starting to know the market quite well. We don’t want to grow there too much for two reasons. Firstly, China is not easy to control and I have to be sure that we sell our watches to the right person and they don’t start to fly all over the world. It’s very important for us to control the distribution. I don’t want to have any grey market problems — they exist, of course, but we are fighting against them. The second one is that we simply don’t produce enough watches.
Why not increase output?
Find me some good watchmakers and maybe I could try. When quartz came along in the 70s, nobody believed in mechanical watches any more, so families started to advise their kids not to go into the business. We have around 50 different types of skilled worker (jewellers, enamellists, technicians and suchlike) and they all need to be trained for four to six years. It can take up to ten years to conceive and produce a new watch. We now train apprentices because the Swiss watchmaking schools don’t produce enough watchmakers. It’s different these days. There are many other choices for young people.
Why do you only have three salons?
Either you fabricate the watches or you sell them. I don’t believe you should do both. I find it much more interesting to work with retailers who know their own city and their own clientele.
What advice would you give to someone thinking of starting a business?
Firstly, you should always do what you’ve said you’ll do. It’s very important. Too often, I listen to people who talk a lot but don’t act. If you want to work with people, they need to trust you. It’s not easy if you’re always changing your mind.
Secondly, don’t expect to be an expert on everything. Choose the right people to help you on all the points you think you’re weak on, and use the opportunity to work on what you think you’re good at. If you know your people and they know you, you can work very hard and have a lot of fun. I never saw somebody being more intelligent because he wasn’t smiling, that’s for sure. I’ve never been impressed by people who think they don’t need to be nice.
What have you learnt from your father?
My father strongly believed that, despite the rise of quartz, people would still enjoy having a beautiful mechanical movement. And he was right. It’s like having a beautiful painting rather than a beautiful picture of a painting.
What do you do when you’re not working?
I do work quite hard. To be honest, for the last month I’ve just gone home, eaten and slept. But during the weekend, when there’s snow I go skiing with my wife and two boys. My dad used to socialise with other members of family-owned firms in Geneva. Now we’re the only ones left.
To find out more visit patek.com
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