Patek Philippe

As you all know from the sales figures, a lot of inventory from Swiss manufactures gets exported to China/HK. And in China, the sole brand boutiques and the AD's are empty because nobody buys in China due to the huge luxury taxes imposed. So the well to do Chinese millionaires you hear about, do their watch buying in HK, Macau, Singapore. And so it has been the case for many years that you could pretty much find any PP model in the Chinese boutiques, but this applies to most brands. I walked into an AD in Shanghai a 6 months ago, and they had every single model of MB&F, from HM1 forwards, and every Urwerk, from 103 onwards, and six months later, the same models are on display. Prices here are almost double Europe/US. Same applies for fashion apparel, from LV to Hermes, and also for Ferrari, where the waiting list is usually 6 months, compared to 1 or 2 years for a new model in Tokyo/HK.  The only thing you can't buy in China, like the rest of the world, is a Kelly or Birkin Hermes bag !

No watches or customers? Just wondering.

All the luxury shopping malls, like IFC, Plaza 66, have a number of sole brand boutiques which are pretty empty even on weekends. Breguet opened what must be their largest sole brand boutique in the world in Xintiandi, Shanghai, probably the most expensive real estate in the world. I have walked in there a number of times, and been the only customer in the whole shop. I think the brands were blinded by the numbers and threw everything at China, but are now coming to grips with the fact that, maybe the Chinese are a major force, but they are spending all their luxury money offshore to avoid the huge taxes onshore. Some brands seem happy to maintain expensive sole brand boutiques in China just to increase brand awareness, but many have started to close shops in China already. So like I say, if a particular PP model is not available anywhere else in the world, you'll most likely find it in China, but it will cost you.  This message has been edited by Spellbound on 2013-05-23 14:58:31

Spent some great time with a very lucky Purist who picked up another beauty and I guess he is not the only one ...

But in general I get your point. Thanks, for the reply!

Oliver

by 60% in ten years. This news just out. This will definitely add to the demand side equation, but it will take a while before the "news" becomes reality. 

In HK everything is available even the hard to find models.   I'm a small client yet I've been offered every model including ultra rare models.  Market has changed, uncertainty persists but rich are still rich.   I'm waiting until 2014 for the 175th anniversary.  Hope for fireworks!!!

It wasn't so long ago when Patek would introduce new models at Basel, it would take about 9 months for the pieces to show up at the dealers (remember ...about 9 months to make a Patek?). They did not have a feel for the number of pieces to produce until after the fair, thus the delay.

Now, production is allocated and is committed. Dealers are told what and how many pieces they will get and that's it. So their operation is streamlined to maximize production because everything is sold.

There are a lot of Pateks now available, more now than ever before. And I feel certain the market will and has to some extent, responded to current price points. The party cannot go on indefinitely with the increases we've seen over the past ten years. Something has to give and your observations along with the others who responded are an indication of just that.

While I'm certain the big collectors will always be buying what big collectors buy and that end of the business will be brisk, the rest of the crowd is being pushed away because of the price points slicing that pie of buyers even thinner .... and that's a problem, a big problem looking down the road.

Search for Patek on the internet and a host of folks, both dealers and others, are advertising for people ... anybody to buy from them pop up. Your watch is just a phone call away. What does that say?

Without question, things have changed and the current trend seems questionable.

The PP price point has exploded in the past few years. Basic models cost close to 30k and complicated models are over 50k....in SS. The % of the population that will spend that kind of money has grown much smaller in the past few years. There has been a huge upswing in uber wealthy net worth but this is not the 1% but the .005% or smaller. That means more pieces are available. I have seen what would be hard to get models in the case in many stores. 5726 1/a, 5712, 5980, 5496...just to name a few. I have heard stories about 5270's being readily available with deep discounts. The grey mkt has everything. I also think business from China has slowed down and that has helped to flood other markets.

I heard the 5270 was actually de-listed as an application piece.  The sales and interest must not have been there.  

Kari, good question. I think what has changed is this

in the past 6 months is because the Chinese government are cramping down on the use of corrupted money.The prices on expensive Cognac have also fallen in the past few months.

Markets have slowed down.

I think it's a few factors.

It used to be fun, to be able to buy a "hard to get piece", enjoy it, and see the value increase over time.  The watches were expensive, but still affordable.  Currently, the prices are so high that the watches really require a lot of careful consideration prior to purchasing.  It is simply too expensive.  Many are priced so high, that they are no longer affordable.  Thus, the glut of inventory in the display cases.  I enjoyed the pieces made in the last 15 years, but not the ones lately. 

While the car is depreciates every year and after 5 years holds 30% of its initial value, 5270 will loose 10-20% maximum of its value. IMHO

Kari, my personal example.

Even on non-relative value basis prices are insane.

I know it is not "proper" to discuss these things on this forum, but I do think things are getting out of hand. That said, the watch industry is very cyclical, so we cannot blame the manufactures for milking it while they can, or they might end up like Corum, bleeding money, and eventually sold to the Chinese. Another downturn like the quartz crisis or the financial crisis in 2008 could wipe out a number of these companies so they need to fill the coffers. And I am not of the opinion we should be comparing PP's with Porches. How much effort goes into painting a still life? Art commands astronomical prices, and horology is considered an art.  But all this has led us to seek value. Much as I love PP, I would never even consider an entry level Calatrava when I could get an IWC Perpetual Calendar or similar for the same money. But in no way are Patek the only ones guilty of over pricing.