Swiss luxury watchmaker Patek Philippe may come up for sale; could fetch between 7 bn-9 bn euros

Patek Philippe, the Swiss luxury watch manufacturer, may be up for sale, according to media reports.

With sales of 1.5 billion francs, quoting Berenberg analysts, Bloomberg said the 180-year-old firm could fetch between 7 billion to 9 billion euros ($8 billion to $10 billion), said the report citing industry sources.

The Stern family has been owning Patek Philippe for four generations. Since 2009, Thierry Stern is the chairman of the Swiss firm.

In 2018, data showed Swiss watch exports fell 7 percent in September, their first decline since April last year that added to jitters that have hit luxury goods stocks. However, Patek Philippe, which has been making watches in Geneva since 1839, was upbeat, a Reuters report said.

“All of our markets did well this year, we’re quite satisfied. An exhibition we organised in the United States boosted the brand there, Europe is also still doing well,” Thierry Stern, chairman, said in an interview at the firm’s headquarters.

“Domestic Chinese demand is rising steadily, we sell more watches every month. Not the very complicated pieces because taxes remain high, but the core collections,” he added.

Patek Philippe Chairman Thierry Stern. Reuters

Patek Philippe Chairman Thierry Stern. Reuters

Stern said the Chinese were likely buying more at home due to worries about issues such as stricter border controls.

His confidence was underlined by a new 550 million Swiss franc ($554 million) building currently under construction on Patek Philippe’s Geneva premises that will house production, service and training activities from next year.

The watch industry is undergoing a period of rapid change, with online sales and monobrand stores replacing traditional retailers.

But Patek Philippe, whose best-selling pieces cost around 35,000 Swiss francs and highly complicated models much more, has no plans to rush onto the internet or to drop its partners.

“Our expertise is in producing watches, we do not have the ambition to control our entire distribution worldwide,” said Stern, adding it was risky to have too many proprietary stores or to take the whole distribution process in-house - a strategy recently embraced by rival Audemars Piguet.

Like neighbour Rolex, Patek Philippe is one of the last independent Swiss watch brands in an industry dominated by multi-brand groups such as Swatch and Richemont.

Stern said his company was constantly adding to its 2,450 staff, but would only increase the number of pieces slowly, by 1-3 percent per year, from the 60,000 planned for 2018, to maintain quality and exclusivity.

Asked about the Baselworld watch fair, recently shaken by the departure of several brands, Stern said it remained an important platform for Patek to meet retailers and journalists. “But the dates need to be aligned with the Geneva watch fair, that is key to the show’s future success,” he said.

--With inputs from Reuters

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Updated Date: Jan 22, 2019 13:49:29 IST

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