
Tiffany's $52,000 Patek watch strategy backfires among elite clients
'Everyone wanted that piece,' said luxury watch consultant Oliver R. Müller. 'With rich people, if you tell them they can't have something, they want it. It's the psychology of billionaires.'
The release of the Blue Dial came during the pandemic-era luxury boom. For Tiffany, the timing was ideal. The brand had just entered a new chapter under LVMH Moët Hennessy Louis Vuitton SE, which acquired it for $16 billion in 2021. The acquisition was the largest in luxury history and aimed to reinvigorate Tiffany, whose sales had stagnated before the deal.
But what began as a masterstroke of exclusivity has become a cautionary tale—how mishandled scarcity can tarnish brand prestige.
Since the Blue Dial's launch, Patek Philippe has closed three of its four boutiques inside Tiffany locations. Former staff say the fractured relationship with the Swiss watchmaker continues to weigh on store revenue and staff morale.
Tiffany's press office declined to comment. Executives Kilaniotis and Anthony Ledru were unavailable for comment. However, LVMH maintains that Tiffany's strategic shift—including upscale store renovations and a focus on high-end Icons collections—is paying off.
'We are seeing continued very good progress on Tiffany's transformation plan,' said LVMH Chief Financial Officer Cécile Cabanis in April.
Tiffany remains the biggest contributor to LVMH's watches and jewelry division, which also includes Bulgari and Tag Heuer. Despite that, Bloomberg forecasts the division will post a 1% revenue decline when LVMH reports earnings on July 24.
Patek Philippe declined to comment on its Tiffany relationship or the Blue Dial's distribution.
In a 2021 interview, Patek President Thierry Stern hinted at potential trouble: 'Tiffany executives may not realize how difficult it's going to be to choose the clients.'
The financial logic for Tiffany was clear: If even two-thirds of the watches unlocked $2.5 million each in jewelry sales, the company stood to gain nearly $300 million. Sales staff could reportedly earn six-figure commissions on such deals.
But the execution left many clients bitter. Sources claim staff were warned not to put any bundling expectations in writing. Everything was discretionary—and often inconsistent.
Some loyal clients spent millions and received nothing in return. Others who did receive the watch grew frustrated when they appeared on the secondary market, often depreciating in value.
One client sued Tiffany over a $4 million jewelry purchase tied to a delayed custom necklace, ultimately settling out of court. Sources confirm that the client had purchased the jewelry to access the Blue Dial.
Another client, who was asked to spend $5 million, walked away and sold off his existing Patek watches from Tiffany in protest. 'I don't shop there anymore,' he said.
One entrepreneur from the Tri-State area spent over $2 million, believing the purchase would secure him the watch. Tiffany staff reportedly asked him to keep the amount confidential, since they quoted different spending thresholds to different clients.
Eventually, the backlash led Tiffany to make exceptions—allowing some clients to return items valued at over $75,000, which broke company policy, according to sources.
While Patek officially framed its boutique closures as part of a 'global consolidation,' insiders claim the Blue Dial controversy played a significant role.
Meanwhile, some luxury clients shifted loyalty to rivals like Cartier. According to Euromonitor International, Tiffany's global jewelry market share has dropped by one percentage point since 2022, while Cartier's has increased.
In contrast to LVMH's flat watch and jewelry sales, Richemont—owner of Cartier and Van Cleef & Arpels—reported 14% growth through March 2024.
Symbolically, the Blue Dial was meant to close a chapter. The final release of the 5711 model. The beginning of the LVMH era. 'It was my little gift to say congratulations on buying Tiffany,' Stern said in 2021.
Tiffany had long served as one of Patek's key U.S. partners. Its dual-stamped dials are highly prized. As hype grew, clients were placed on 'wish lists'—a term deliberately used to avoid saying 'waitlist,' which implied delay and disappointment.
When photos of celebrities like Jay-Z, LeBron James, and Leonardo DiCaprio wearing the Blue Dial surfaced in early 2022, frustration deepened among regular clients who had spent millions and still had nothing to show for it.
The bundling tactic—requiring jewelry purchases to access the watch—though common in the industry, remains controversial. Watchmakers discourage the practice, and retailers rarely speak of it openly.
'Watchmakers give stores impossible tasks,' said Eric Wind, of Wind Vintage. 'You get three watches a year with hundreds on a list. So it becomes: Who's spending more?'
In 2023, a California man sued a jeweler for allegedly pressuring him to purchase $221,000 worth of watches and jewelry to access a specific Patek model, which he never received.
In 2024, Hermès faced similar litigation over alleged bundling practices with its Birkin bags—an accusation the brand denies.
In April 2022, Tiffany invited top spenders to an exclusive Miami jewelry gala, where staff told guests that spending $2 million or more might secure them a Blue Dial.
Clients stayed in five-star accommodations, attended lavish dinners, and bought pieces worth millions. Sales exceeded expectations.
However, after the event, some clients who had made large purchases were never offered the watch. Others waited months. Frustration spread.
Auction prices for the Blue Dial have since dropped—from $6.2 million in December 2021 to around $1.2 million in 2024, according to WatchCharts.
Patek, known for its craftsmanship, discourages the reselling of its watches. Still, Tiffany reportedly failed to vet some buyers. Watching the resale values tumble became the final disappointment for many.
Yet the bundling continues. In December 2024, Charlie Ho, a Boston anesthesiologist, was told by Tiffany staff that buying jewelry might help him obtain a gold Patek 5396R.
Ho declined. 'I've played that game,' he said. Years earlier, Ferrari told him to buy several cars to earn access to a limited-edition model. He bought five—and never got it.
'I don't want to play the game anymore.'

Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles


Fashion Network
31 minutes ago
- Fashion Network
Roche confirms guidance as H1 core operating profit up 6%
Swiss drugmaker Roche reported a better-than-expected first-half operating profit on Thursday, which was up 6% due to strong sales growth from breast cancer drug Phesgo and allergy treatment Xolair. Roche reported operating profit at 12 billion Swiss francs ($15.15 billion), above forecasts for around 11.7 billion, driven by higher sales and effective cost management, it said. Roche added that the appreciation of the franc against the U.S. dollar had an adverse impact on results reported in francs compared with constant exchange rates. At currency-adjusted rates, profit was up 11%. "We are confident in our continued strong momentum and resilience of our business due to our innovative on-market portfolio and pipeline," said CEO Thomas Schinecker. He said Roche was still targeting an increase in full-year adjusted earnings per share at a high single-digit percentage. Diagnostics division sales were stable at 7 billion francs, Roche said, citing growing demand for pathology solutions and blood screening tests as offsetting the effect of China's healthcare pricing reforms. Headquartered in Basel, Switzerland, Roche owns skincare brand La Roche-Posay. The label's products include cleansers, moisturisers, and sunscreens.


Fashion Network
13 hours ago
- Fashion Network
Luxury's split between winners and losers is only getting wider
One striking example of the sector's divide is LVMH versus French peer Hermes International SCA. Sales at LVMH's key Fashion & Leather Goods division are expected to have dropped 7.8% in the second quarter, according to analyst estimates. The company reports after the bell on Thursday. Hermes, which has been an example of how companies can thrive on selling the highest-end items, is expected to report revenue growth of 12% at its leather goods division. Its results are due on July 30. In the case of the Louis Vuitton and Tiffany & Co. owner, the stock has lost roughly half of its value over the past two years, losing its crown of Europe's biggest stock, with investors increasingly worried about an unprecedented demand slump in China. Hermes shares, on the other hand, are weathering the broader industry pullback. After a 160% jump since the end of 2020, the stock is little changed this year versus a 7% drop in Goldman Sachs Group Inc.'s basket of luxury shares. In the current economic context, pricing power is critical, said Helen Jewell, Europe, Middle East and Africa chief investment officer at BlackRock Fundamental Equities. 'The challenge for investors has been some of the names that we thought had greater brand strength, and it turned out they actually didn't,' she said, adding that there could be some buying opportunities after the selloff in the sector 'but you do need to be selective.' For the sector as a whole, the difference is stark between now and the 2021 to 2023 boom times, when investors were rushing to snap up any European luxury shares as they reaped the profits from shoppers on a post-pandemic spending spree. But with China's sluggish economy putting a dent into demand for pricey handbags and watches, investors are buying shares in the brands that can captivate consumers and selling the ones that can't. Among this year's winners, shares in Burberry have surged more than 30%. The UK fashion brand is gaining traction with its turnaround plan and winning new customers through its outwear push. To some investors, luxury valuations are still too high overall even after this year's plunge in a number of stocks. The industry has an average forward price-earnings ratio of 27, according to data compiled by Bloomberg. That's a near 85% premium to the broader market and above the long-term premium from the past 10 years. 'This is a sector that is fully exposed to tariffs and fully exposed to the weaker dollar,' said Roland Kaloyan, head of European equity strategy at Societe Generale SA. 'It's going to be quite difficult, so I stick to my underweight.'


Fashion Network
13 hours ago
- Fashion Network
Luxury's split between winners and losers is only getting wider
For Europe's luxury stocks, this earnings season will hammer home the widening gulf between the winners and the losers. The industry got off to a promising start with robust earnings from British trench coat maker Burberry Group Plc that sent its stock up as much as 9% and better-than-expected sales at Cartier owner Richemont. But upcoming reports from LVMH Moët Hennessy Louis Vuitton SE, Kering SA and Salvatore Ferragamo SpA look less promising. If sales at these companies undershoot already weak forecasts, the shares may extend this year's drop that has wiped out market value of as much as 175 billion euros (205 billion dollars). While the outlook for luxury shares is crucial for Europe's stalled equity market rally given the weight of these companies, investors have to be more selective about the stocks they pick. 'It's not going to be one-tide-lifts-all-boats for the sector,' said Stefan-Guenter Bauknecht, a senior portfolio manager at DWS. 'It really depends on the category and how the brand is perceived in the category. And the VIP certainly helps.' One striking example of the sector's divide is LVMH versus French peer Hermes International SCA. Sales at LVMH's key Fashion & Leather Goods division are expected to have dropped 7.8% in the second quarter, according to analyst estimates. The company reports after the bell on Thursday. Hermes, which has been an example of how companies can thrive on selling the highest-end items, is expected to report revenue growth of 12% at its leather goods division. Its results are due on July 30. In the case of the Louis Vuitton and Tiffany & Co. owner, the stock has lost roughly half of its value over the past two years, losing its crown of Europe's biggest stock, with investors increasingly worried about an unprecedented demand slump in China. Hermes shares, on the other hand, are weathering the broader industry pullback. After a 160% jump since the end of 2020, the stock is little changed this year versus a 7% drop in Goldman Sachs Group Inc.'s basket of luxury shares. In the current economic context, pricing power is critical, said Helen Jewell, Europe, Middle East and Africa chief investment officer at BlackRock Fundamental Equities. 'The challenge for investors has been some of the names that we thought had greater brand strength, and it turned out they actually didn't,' she said, adding that there could be some buying opportunities after the selloff in the sector 'but you do need to be selective.' For the sector as a whole, the difference is stark between now and the 2021 to 2023 boom times, when investors were rushing to snap up any European luxury shares as they reaped the profits from shoppers on a post-pandemic spending spree. But with China's sluggish economy putting a dent into demand for pricey handbags and watches, investors are buying shares in the brands that can captivate consumers and selling the ones that can't. Among this year's winners, shares in Burberry have surged more than 30%. The UK fashion brand is gaining traction with its turnaround plan and winning new customers through its outwear push. To some investors, luxury valuations are still too high overall even after this year's plunge in a number of stocks. The industry has an average forward price-earnings ratio of 27, according to data compiled by Bloomberg. That's a near 85% premium to the broader market and above the long-term premium from the past 10 years. 'This is a sector that is fully exposed to tariffs and fully exposed to the weaker dollar,' said Roland Kaloyan, head of European equity strategy at Societe Generale SA. 'It's going to be quite difficult, so I stick to my underweight.'