Professional Documents
Culture Documents
The Times - Patek Philippe Interview - June 2011
The Times - Patek Philippe Interview - June 2011
2011
FAMILY BUSINESS
THE MAN WHO MAKES PATEK PHILIPPE TICK
PAGE 04 _ PLUS WHY FAMILIES ARE DRIVING DEVELOPING ECONOMIES, PAGE 10 _ AND MAXIMILIAN RIEDEL ON HIS GLASS-MAKING DYNASTY PAGE 14
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FAMILY BUSINESS
FAMILY BUSINESS
THIERRY STERN CV
Born _ 1970 1988-90 _ Business studies at Ecole de Commerce, Geneva; Watchmaking school of Geneva 1990-96 _ German Patek Philippe retailers; New York Patek Philippe subsidiary founded by Thierrys grandfather Henri Stern; Patek Philippe case and bracelet workshop 1997_ Marketing manager for Benelux 1998 _ Head of product development, Geneva 2006 _ Vice president and member of management committee 2009 _ Patek Philippe president and management committee member
view. Our customers are looking to invest in real value. We still repair and restore all our watches. After 30 years, many big watch companies
Lesley Wild, of Bettys & Taylors Group, one of the IFBs top family businesses for stewardship, p08
wont x your watch. But 30 years is nothing for Patek Philippe because we commonly repair watches that are 100 years old. Thats our philosophy, he says. At auction, the majority of watches fetching record prices are from Patek Philippe, he adds, although it is widely acknowledged that the company itself is a regular auction bidder, buying up classic watches for its private museum collection. Thierrys father Philippe has even been known to show up to a Geneva
auction in a tracksuit, looking like he has just arrived from the gym to make a quick multimillion franc purchase before leaving. The companys board is patriarchal it consists of Thierry Stern, his father and honorary president Philippe Stern and managing director Claude Peny. Thierry has two older sisters one who looks after VIP clients in the Geneva boutique and one who left the company. The company typically plans two years ahead when it comes to watch design that department is run by Thierrys wife Sandrine. The couple met at industry trade show BaselWorld when Sandrine, the daughter of a Geneva jeweller, organised an event for international retailers. They have two sons, aged eight and nine. But can this sort of business continue to ourish? There has been a lot of consolidation in the luxury industry in recent years and the vast majority of Swiss watch companies
belong to either the Richemont or LVMH luxury goods conglomerates. Can Patek Philippe remain independent? Stern thinks so. We plan our strategy like chess. With no shareholders, our independence enables us to focus on a clean and clear strategy with long-term vision, he says. And what about Asia, the big new market for luxury goods? While more fashion-conscious luxury brands from Louis Vuitton to De Beers and Gucci cater to the burgeoning middle class there, some might think that Patek Philippe, with its more conservative aesthetic, might struggle to carve out market share. Well maybe. The entire watch industry has seen a conservatism in watch styling of late, proving that fashions come and go. And during our trip to the companys museum, almost every visitor was Asian. The company has a longstanding presence in the United States Thierrys grandfather Henri Stern spent 20 years in New York
but today its strongest markets are Europe, the Middle East and Asia. Family businesses have a reputation for avoiding risk. But Thierry Stern is adamant that Patek Philippe has embraced risk for the long term gain of the company whether by investing in a state-of-the-art building when shareholders would rather have kept the money for themselves, new technology to increase the accuracy of its watches, or research into the performance of specic materials. We take risks to stay at the top of the pyramid. I think that if people say Patek Philippe is risk-averse, it is because they are jealous of our success. Despite its conservative image, the business is forward looking, Stern insists. It channelled serious investment into machinery to research how silicon can improve the smooth running of its watches, resulting in the introduction in 2005 of the silicon escapement wheel. We had no idea when we started whether it would be a success. But I believe
that either you take risks, or you die. Respect for Patek Philippe comes from the fact that we are always evolving, step by step.
Stern says that joining the business instead of going to university was the hardest decision of his life
Stern refers to his decision to join the company full-time at the age of 19 as the hardest of his career to date. I like travelling, but I dont like sitting for very long, he says. He decided university was not for him and instead he chose to climb the ranks starting with two German retailers, moving on to the New York subsidiary, returning to production in Geneva, then heading the Benelux market. He became head of product
development before becoming vice president and then president. There are no books that teach you what Ive learned working my way up in the business over the last two decades, he says. With our product, I can seduce intelligent people to work with us to run the nancial aspect in fact they have proved to be some of my best teachers. What I love is not numbers or reports, but watches. There must be some stress in taking over the reins of a family business, and Stern says the greatest challenge has been accepting he is not the same person as his father. Many people taking over a family business expect to be as good as their parents. But I dont think I should try to be the same. They key is to surround yourself with great people to call on when help is needed. Under Stern the business has ourished. When his father took over as managing director in 1977 there were 150 employees. Today there are close to 1,500.
Typically for a family businessman, Stern takes a keen interest in his workers. The greatest lesson Ive learned from my parents is to respect people and to say thank you. There are people in our factory responsible for making the smallest holes on miniscule watch components and they are not on the highest salaries, but if they dont do it, I dont have watches. My father really pushed me to appreciate other peoples hard work, he says. Stern knows that the family business image is important for customers. With most brands, CEOs are not experts on the product, they are more concerned about shareholders. But our customers really care about the manufacturer of their watches, he says. Our customers appreciate the fact we are a family business. They enjoy meeting us, sharing our passion about passing their watches on to the next generation of their families. If there is one challenge to rms like Patek Philippe, with their tra-
dition and craftsmanship, it is technology. As if to underline that he is in tune with the modern world, Stern checked his iPhone twice during our meeting, once to clear time for the photographer. Is he worried that Patek Philippe might be left behind? Not at all. I have noticed that the more successful digital and virtual technology have become, the more success we have had with our mechanical technology, he says. We have many clients from the IT and technology industry. Their own products have a short shelf life, which is probably why they love our watches. The fact there is no battery and that its all handcrafted somehow brings you down to earth. In a functional world, there will be always be a place for luxury, he thinks. No-one needs a Patek Philippe watch. The only one who is stuck with no choice but to wear one is me, he quips. Our work is not vital, its about beauty, passion and history. Thats why it has to be perfect.
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