Chapter 4/6
So, it seems that there's such a thing as too much of a good thing. Somewhere in the late 2010s, the Nautilus's success proved to be so large it as really overwhelming. The watch, and by the watch we mean the steel 5711 specifically, became so popular it created a host of issues for Patek Philippe. So much, that the costs overweighed the benefits. Everybody's vying for, begging for, praying for more success of, well, any watch. And Patek Philippe had to cool things down. Forcibly. The brand had to stop offering its hottest watch.
What happened is an alignment of stars the likes of which had never happened before. Prior to the Covid lock-downs, the integrated bracelet trend compounded with the Gérald Genta trend which compounded with the luxury steel trend, which compounded with the status of Patek Philippe as the leading watch brand in its segment (meaning: more expensive than Rolex). But steel watches, sports watches and the Nautilus range are each minority items in the Patek universe. So the blue-dialed, all-steel, no-complication Nautilus found itself in a state of demand several times over output. By people who had a lot of money. Really, a lot of it. And they badly wanted one. All the more so as they couldn't get one. So much so that they began wanting one at any cost. So, they got what they'd asked for. As a result, prices on the secondary market skyrocketed.
During the Covid lock-downs, new actors doused that kindling fire with gasoline: idle speculators hunting for any asset class they could toy with on the Internet had discovered watches. They became infamously known as flippers. They bought and they sold, speculating on a watch as if it was a hot commodity, like oil in times of crisis or gold in times of currency instability. With the Nautilus, the whole thing really got out of hand. 10x, 12x, 15x, some people just didn't care how much they (over)paid.
At some point in 2021, Thierry Stern pulled the plug and announced he was retiring the 5711. But that didn't actually happen until almost a year later. And in the meantime, Patek released a handful of incredibly sought-after references (green and Tiffany dial, I mean you) that drove the market even crazier. And then out of the blue, a slightly larger, gold-only, much more expensive, blue-dialed, gray Nautilus emerged, called ref. 5811.
The move seemed suicidal, but the rationale behind it is actually the healthiest decision Patek could take. What it boils down to is the brand was being eaten up by this one product. Not even a whole collection. Just the three-handers in steel and, to a lesser degree, gold. It was all everyone talked about. What all the Wall Street, Silicon Valley, London private equity and Singapore born in clover people wanted. And Patek got none of the proceeds of this insane boiler room experiment.
There's a love/hate relationship between Patek Philippe's head Thierry Stern and the Nautilus. He named his yacht after it, but he has to watch it like milk on the stove. He benefits from it, but it turns his other collections into stepping stones for clients who will buy any other Patek just to get their hands on one. His brand equity grew tremendously from it, but it was neither the right equity nor the right growth.
What's worse for him still, this famed name is set to celebrate an anniversary worthy of a proper celebration, its fiftieth. Now Thierry Stern is faced with yet another conundrum: he doesn't want to push the collection, but he can't just deny thousands of feverish fans, most of whom are his clients, the big splash they're waiting for. And he cannot deny his company the cushy margins that will stem from the Nautilus' unmatched pricing power. Agreed, it's a problem everyone would love to have. But a problem it is.
