THIS PATEK Philippe “World Time” wristwatch sold for $4,026,524 in April 2002, setting a world record for a wristwatch sold at auction.

A Legacy Lauded
The force behind the surge is an enthusiast base whose commitment to the Patek Philippe marque never wavers, despite the price appreciation. These avid collectors take as gospel that no other brand is as consistently better made, more accurate and finer looking than the one they prize.

VALUE JUDGEMENT • Rare or complicated Patek Philippe watches appreciated  200 percent to 300 percent in the 1990s. • Standard models appreciated by 50 percent in the same period. • The brand’s strong investment   performance is due in large part to its loyal admirers, who value   its legacy of craftsmanship, family  ownership and innovation. •  The company takes steps that boost valuations, such as limiting production and intervening   in the secondary market.

The company’s proud history evokes, in part, their strong admiration. Patek Philippe has consistently been awarded top honors in mechanical watch accuracy competitions, such as the Chronometer Competition of the Geneva Observatory, which  has been held since 1880. A record set in 1962 by Patek Phillipe’s pocket watch with a Guillaume balance tourbillon still has not been broken by any other mechanical timepiece.

Before the 1960s, Patek Philippe was the only company making perpetual calendar wristwatches in any significant numbers. This explains why its whole production of complicated models from this earlier period is now sought after by collectors.

Patek Philippe’s legacy of family ownership (by the Stern family since 1932) also has inspired loyalty. Philip Stern, who became managing director in 1978, upholds the company’s traditional way of doing business, even as the Swiss watch industry has largely become modernized and automated in order to reduce expenses. As a result of automation, many steps in the watch-manufacturing process of other companies are done with standardized parts and completed by computer-directed machines.

Patek Philippe remains one of the very few Swiss watchmakers to manufacture the majority of its movements in-house. The company’s workshops on the outskirts of Geneva are very much state of the art, but traditional techniques such as hand polishing are still used, much to the delight of the serious Patek Philippe watch enthusiasts.

THE NUMBER of collectors who have accumulated more than 10 pieces from Patek Philippe is estimated to be at least several thousand.

Though Patek Philippe watches, revered for their classical, low-key styling, are anything but showy on the outside, the insides stand out for their remarkable quality. The wells for the screws receive a mirror polish. A wooden grinding wheel, which reaches even the tiniest surfaces, is used to polish the wheels and pinions.

The movements have always been finished with painstaking hand polishing and beveling, qualifying them for the Geneva Seal, the most meticulous industry quality standard, established in the mid-19th century.

Craftsmanship and mechanical parts made to exact tolerances contribute to the renowned longevity of Patek Philippe’s pieces—an important factor in the vintage market. While many other watches rely on fast-beating movements that guarantee accuracy at the expense of endurance, Patek Philippes use a slower movement with a superior balance wheel and hairspring.

Collectors’ Vanguard
Although the fad for collecting prewar wristwatches seems as if it has been around forever, in fact it is relatively recent. “Up until 20 years ago, only pocket watches were considered collectible,” says Gregg Esses, a dealer in high-grade vintage watches. “But as people discovered they could combine collecting with something they could wear, the demand for quality vintage watches, especially Patek Philippes, took off.”

HISTORY OF AN ICON • 1812: Antoine Norbert de Patek de Prawdzic is born in Poland. • 1815: Jean Adrien Philippe is born in France. • 1845: Patek founds Patek & Cie.  with Philippe. • 1851: The company changes its   name to Patek Philippe. • 1860: Patek Philippe’s stem-winding system is patented in France. • 1868: Patek Philippe produces  the first Swiss wristwatch on record. • 1925: Patek Philippe makes the first perpetual calendar wristwatch.

Because they are considered fashionable, pieces from the ’40s, ’50s and ’60s have a special appeal. “Design is paramount to a wristwatch collector,” says Osvaldo Patrizzi, founder and chairman of Antiquorum, the most significant auctioneer of vintage watches. “In wristwatches, the period from the end of the war to the 1960s is generally regarded as having superior designs, even when compared with the present.” Prewar wristwatches are very small by today’s standards (as much as 10 millimeters smaller in diameter than an average watch today), and naturally, because of their age, less suited for day-to-day use. Given these conditions, complicated Patek Philippe wristwatches, like a perpetual calendar/minute repeater, became the most desirable vintage timepieces in this new collectible category.

The United States has traditionally been the most important market for fine Swiss watches, but the love affair with Patek Philippes actually began in Europe. “It was the Italians who first started acquiring vintage Patek Philippes in a serious way back in the early ’80s,” recalls Esses. “They would come to watch shows and pay cash for anything that caught their eye.”

It was not long, however, before a group of American enthusiasts began to follow the Italian collectors’ lead and amass significant caches of their own. “When you went overseas or to auctions here, it was always the same group of Americans at each event,” says Jeffrey Hess, one of the six collectors of Patek Philippe who started in the early ’80s, at the beginning of the vintage market in the United States. “Three or four major, longtime collectors, like Massimo Barraka, were particularly active during the ’80s, and between us, several million dollars in Patek Philippes would trade hands.”

THE VALUES of coveted complicated watches, like the perpetual calendar, escalated 200 percent to 300 percent during the ’90s.

The contrast between those early days and today could not be greater. The number of collectors who have accumulated more than 10 pieces from Patek Philippe is estimated to be at least several thousand. Fueled by books and regular auctions, such as those held by Antiquorum, the lore of the brand has grown since the 1980s.

Market In Ascent
Many of the basic models have acquired popular names, like the “Top Hat” classic rectangular men’s watch and the “Eiffel Tower,” with its distinctive reverse curves. Basic collector’s models, like the Caliber 96, which could sell for around $2,200 in the 1980s, have at least doubled in price to $4,000 to $5,000 today, while the rare models incorporating two or more complications, such as a chronograph/perpetual calendar, have appreciated 300 percent or more. Some models, like the Reference 2499 or the 1518, take diligent searching to find at shows, at auction or on the Internet. Prices for the most expensive models—the very complicated, and certainly very rare, limited series from the ’30s and ’40s—vary from the mid to high six figures and occasionally even higher. They have created a new elite level of collector.

Like a new car, even Patek Philippe watches experience an immediate depreciation when they are walked out the door of a jeweler. According to prices found on the Internet, this depreciation hovers around 30 percent, a figure that is actually quite low for a modern watch at retail. In most cases, it can take years, depending on the production numbers and popularity of the model for the price to stabilize. Limited editions (which take connections to acquire) appreciate immediately, but for the regular models the wait is longer, perhaps five or six years.

While Patek Philippe denies any overt attempt to manipulate the vintage market, many of the company’s production policies benefit current owners. Patek Philippe still creates the complicated pieces on a relatively limited basis and revises even successful models after several years of production. Their reasons may be benign, but these moves nonetheless eventually create a limit on supply that boosts valuations. The company’s legions of admirers are certainly not complaining.