Business Breakdowns
· John Reardon
[00:00:00] S1: Sure. My business is preowned and vintage, but I'm going to answer that on behalf of all of our retailer friends out there. So as an individual, walking in to buy a Patek Philippe from one of the Patek Philippe retailers in the U.S. or abroad, you're in store for a frustrating experience. Odds are they're not going to have the watch you want in the case. Odds are if there's a watch in the case, it might be reserved for another client already or simply not for sale. And this is particularly true with some of the more coveted pieces, some of the sports watches, Nautilus, Aquanaut, but it's even true with some basic Calatravas. And it's amazing that even a time-only Calatrava starts around $32,000 retail, U.S. today. So the cost of entry at the most basic level is quite high, and the odds are you can't buy it. Now if you're lucky enough to walk into a retailer's and find an Aquanaut for sale, a reference 5167A, and this is their entry-level sports watch. Retails were only $25,000. You're just not going to have that kind of luck in today's world because the secondary market value of that watch is $70,000-plus the moment that you buy it. Everybody knows this. You're not going to be able to buy one for that amount of money, and all day long retailers are basically telling end consumers, "I'm sorry. It's not for sale." So you could see, even at the point of sale, there's this amazing experience that sometimes, could start off as quite negative that you can't have the watch that you want. Hopefully, we can get into it soon, talking about the past because this wasn't always the case. This is something that we've experienced over the last 4 or 5 years, which is quite new to the watch-buying world.
· Matt Reustle
[00:00:00] S0: Yes. I want to get into the history and now is a great time to do it, but we could start at the very beginning, the founding story of Patek, who was behind the brand, was the idea of making the perfect mechanical timepiece, always the mission. Walk us through what those early years were like and how long ago it actually was.
· John Reardon
[00:00:00] S1: Sure. So the story starts in 1839, a Polish nobleman named Antoine Norbert de Patek, he decided that he wanted to start a watch company, and he was in the Polish Cavalry and went to Geneva. It was the center of watchmaking in that period of time. And he and his partner, this gentleman, named Mr. Czapek, François Czapek, started this company and their idea was to sell to Polish nobleman friends and eventually, ironically, their former enemy, the Russians to sell some of the finest Swiss watches ever made. The whole goal of the company was to move it back to Warsaw eventually, and that never happened. It stayed in Geneva. History has a funny way of changing people's goals as time evolves, but for those of you that have your own business, nothing happens as you imagine, it will in the future, and that was true with Mr. Patek and Mr. Czapek, and these 2 gentlemen did have a falling out. And after 5 years, Czapek left and started his own company, and Patek found a new partner, a gentleman named Mr. Philippe. Adrien Philippe was a watchmaker, the inventor of stem-winding and stem-setting so each of you out there that has a watch that's mechanical on your wrist, when you wind it and set it. There's at least 8 parts that came from Mr. Philippe and his mind and his brilliance from the mid-19th century. So I've heard the curator of the Patek Philippe Museum say this many times, "Each of us does have a little bit of Patek Philippe on our wrists already." So this really put Patek Philippe in the map from the very beginning in the 19th century. And soon they had the ultimate celebrity endorsement in the 1850s, when Queen Victoria bought a watch for herself and then bought a watch for her husband, Prince Albert. And then everybody wanted to own a Patek Philippe, and the rest is history. I mean, there were ups and downs along the way, but the 19th century was this meteoric rise of the brand, Patek Philippe, and the idea was to make the best watch and that value and that commitment to making the finest watch continues to this day.
· Matt Reustle
[00:00:00] S0: The Queen being the original influencer was not something that I ever thought of, but there you go. Great history, where history really doesn't change. It just rhymes a little bit. You talked a lot about time-only versus complications and what can actually happen inside these watches and some of the amazing things that they're able to do in such a small mechanical piece. And one key moment in history that I was reading about was Henry Graves and the Supercomplication. So maybe you can walk us through that story of who Henry Graves was and what this watch was that he had designed by Patek.
· John Reardon
[00:00:00] S1: And I'm going to answer that from a modern perspective. Imagine the day that we had a phone that was corded to the wall, then one day, we had a flip phone that was wireless. And then a few years later, we had the iPhone, which had pretty much everything, all the complications you can imagine, it's a computer handheld. Now take that, and go back 100 years and Patek Philippe was doing that with moving parts and mechanical handmade pieces. So first, there was just time-only, so you knew, hours, minutes, sometimes, seconds. And what and Patek Philippe was able to do with this so-called Supercomplication that was commissioned in the 1920s in the heart of the Great Depression and delivered in 1933, was to make a watch that had 24 complications in total, which did everything that could possibly be done with technology that existed during that time period. This watch could calculate time of sunrise, time of sunset. One dial, who was a pocket watch, of course, it had meantime, which is what we have on our watches today and the opposite side had sidereal time or start time. And the list goes on with the type of alarm mechanisms. This watch that you could set. It had a repeater and a Grande et Petite Sonnerie, meaning that you could literally push a button, and it tells you what time it is because that is just one of the most amazing complications out there is when a watch audibly tells you the sound with a series of gongs. And my favorite part of this particular watch is a sky chart with moving stars in enamel, which shows you the sky as seen if you're standing where the Statue of Liberty is, Liberty Island. And that watch was able to do all of these complications and more. And it was a sensation for the media. And for the collector Henry Graves himself, he knew he had the most important watch ever made.
· Matt Reustle, John Reardon
[00:00:00] S0: You mentioned the history was always selling to noblemen. It sounds like Henry himself was a prominent person, someone with wealth. When I think of Rolex, some of those early advertisements were for people climbing mountains, people diving. You very much attached it to activities and professions. Was Patek always the dress watch or something very much driven towards the wealthy and looking for something exclusive? [00:00:00] S1: It's a good question. First, it was. The watches were marketed specifically to noble people of the Western world, but then it expanded. Patek Philippe was selling to pieces to the kings and queens globally. And for the United States, the kings and queens were the Titans of Industry and people like James Ward Packard of automobile fame and Henry Graves Jr., were the Titans of Industry, people like J.P. Morgan were watch collectors, Henry Clay Frick, the Vanderbilts. And one of the fun things is when we find these amazing watches out there today, you could tie down the history very quickly because often they had their initials or names on the back. So here's a sound bite for you. Rolex would ultimately be sold to the people that were climbing the mountains, but Patek Philippe watches were being sold to the people that own the mountain.