CORDER’S COLUMN: Patek Philippe $500,000 flip is a nightmare for authorized dealers

Imagine putting a sign in your store window advertising an instant cash giveaway of $350,000. At first it would elicit suspicion and disbelief from the public, but a bit of research would reveal that the offer is actually true and a stampede would begin. This is effectively what every Patek Philippe authorised dealer in the world is facing since a 2021 factory sealed Patek Philippe Nautilus 5711 in olive green, retail price $35,000, sold at auction for almost half a million dollars. That isn’t the only example of the green Nautilus selling at a ludicrous mark-up. A secondary market specialist told me last week that it had also sold its first example for almost $300,000. Patek Philippe’s green Nautilus isn’t the only watch that can be flipped for six-figure profits. The blue 5711/1A-010, which has been discontinued, is also selling for over $100,000 today. This is a horror story for Patek Philippe’s authorized dealers. A typical AD might be allocated two of the green Nautilus watches this year, which will generate less than $40,000 in gross profit. But to handle incoming calls from flippers wanting to buy the watch, these same retailers are having to employ full time staff just to turn them away or filter them from genuine customers. These clienteling and customer service employees are subjected to manipulation, abuse and even threats. There is no solution in sight. Patek Philippe’s president, Thierry Stern, has admitted that he knew the green Nautilus would create this storm, but has no plan to solve it. Worse, Patek Philippe dealers get pressure from the brand to ensure their hottest watches do not find their way into the hands of flippers. If they sell a watch with all its packaging, including the inner plastic factory seal on the watch (which increases its resale price because it is provably unworn), they can lose their agency for the brand. That might not seem such a terrible outcome in these circumstances, but none of them feel that way. Patek Philippe opened a new manufacturing facility recently which gave it the capacity to make more watches, but Mr Stern says he will not increase production above around 60-70,000 units per year and will instead focus on making more complex and sophisticated watches. Perhaps this is the only solution. Rather than making relatively simple stainless steel three hand automatics like the Nautilus, Patek Philippe should only make watches in precious metals or with multiple complications and retail prices in six figures.

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