REAL TALK WITH PATEK PHILIPPE'S THIERRY STERN

What comes next for the watchmaking industry, and what happens after the Nautilus?

- Chris Rovzar and Andy Hoffman

At the Watches and Wonders trade fair in Geneva, the head of the family-owned Swiss watchmaking juggernaut Patek Philippe SA sat down with Bloomberg on March 29 to discuss the future of the watch market, succession plans and a new watch he'll soon be bringing to market. Here is the conversation with Stern, 52, edited for length and clarity.

Patek is very sheltered from the crosswinds in the broader market. Do you see the boom the industry has experienced over the past three to five years continuing, or do you see it softening?

The boom is maybe at its peak for now-this is my own guess. There will be two factors: The first one is the secondhand business, where prices were really way too high. This is now coming back to normal. The second one is that for two months now, the market is a little bit slower than before. I think that the business is very good, but I don't think it will be as successful as the other years. The [current customer] wait time is also so big that it's not so bad if we see a certain slowdown.

Are you raising your production numbers?

No, not at all. I'm fighting to maintain it now at 70,000 pieces. We don't have the capacity to overproduce at Patek. If it's only a simple quartz movement, yes, I could produce 5,000 more. But that's not what people are wanting from us, and that's also not what I am willing to do.

This is also why we decided to reduce by 30% the whole network [of retailers]. As I couldn't increase the production, my only other choice was to reduce the points of sale, so everybody could get a little bit more watches.