Imagine advertising a £250,000 immediate cash giveaway in your store window.
It would initially raise eyebrows and disbelief from the public, but a little study would show that the offer is genuine. The stampede that would follow – would make the Euro Championships Final at Wembley look like a well-controlled affair.
This is, in essence, what every Patek Philippe authorized dealer around the world is dealing with now that a 2021 factory sealed Patek Philippe Nautilus 5711 in olive green has sold for nearly half a million dollars at auction.
It isn’t the only time that a green Nautilus has been sold at a ridiculous markup. Last week, a secondary market expert informed me that it had just sold its first example for almost £300,000 on the secondary market.
The Patek Philippe green Nautilus isn’t the only timepiece that can be flipped for six-figure gains. The blue 5711/1A-010, which has been discontinued, is now valued at more than £100,000.
This is a horror story for Patek Philippe’s authorized dealers.
This year, for example, a typical AD might receive two green Nautilus watches, resulting in less than £30,000 in gross profit.
To receive calls from flippers wanting to purchase the timepiece, these same businesses are now having to hire full-time employees just to let them down or filter them out from genuine consumers.
Customer service workers are being manipulated, abused, and even threatened on a daily basis due to the vast potential profits at stake for flippers.
There is no sign of a solution. Patek Philippe’s president, Thierry Stern, has acknowledged that he knew the green Nautilus would cause such a stir, but there is no plan in place to address it. Worse, Patek Philippe dealers are under pressure from the company to keep its most sought-after timepieces out of the hands of flippers.
If they sell a watch with all of its packaging, including the inner plastic factory seal on the watch (which boosts resale value because it is unworn), they may lose their license to represent the brand.
According to Mr. Stern, Patek Philippe recently built a new manufacturing facility that allowed it to produce more timepieces, but he will not increase production beyond approximately 60-70,000 units per year and will instead concentrate on producing more complicated and sophisticated timepieces.
This looks to be the only option. Rather than producing basic stainless steel three-hand automatics like the Nautilus, Patek Philippe should concentrate on producing timepieces with precious metals and a variety of complications and sell for over $100,000.