That’s what Patek Philippe SA Chairman Thierry Stern says. A contrarian or just good business acumen?
“I’m not putting all my eggs in the same basket,” the chairman of Geneva-based Patek Philippe said in an interview at the world’s largest watch fair in Basel, Switzerland. “It’s a big mistake I think that a few brands are doing by going only in China. They focus everything on China and it’s dangerous.” Stern didn’t disclose which brands he thought are overinvesting in China.
“For three or five years it should be fine” in China, said Stern. “After that, it’s hard to know, but one day, of course, there will be something happening. This is why you have to really watch out.”
Stern believes that the Chinese market will slow and it’s unwise for Swiss watchmakers to concentrate so much in a single market.
Although that single market – the Chinese – buy about half of the watches sold worldwide either in their home market, in Hong Kong or while traveling abroad, according to Jon Cox, an analyst at Kepler Capital Markets.
Swiss watches exports to China soared 57 percent to 1.1 billion Swiss francs ($1.2 billion) in 2010 and shipments to Hong Kong, where many wealthy Chinese buy watches to avoid mainland China’s luxury taxes, jumped 47 percent to 3.19 billion francs, according to the Federation of Swiss Watchmaking.
Over the years, Patek has been selling timepieces to Chinese travelers to Europe. The company now has two stores in China, which are used mainly to service and repair watches and not merely as showrooms.
Patek, which produces 45,000 timepieces a year, sold about 100 in China last year.
Patek Phillipe is a lone ranger in a market that sees herds of luxury retailers trying hard to woo China. The watchmaker’s old world conservatism is seen through its chairman who insists on minimizing risk regardless of current market euphoria. “I try to be very equal on every market, because if something happens, you should also survive,” Stern said.
photo credit: patek philippe