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Fashion Network
6 days ago
- Business
- Fashion Network
Tiffany's $52,000 Patek watch strategy backfires among elite clients
Tiffany & Co., the iconic American jeweler now owned by LVMH, is facing criticism from its wealthiest clients after a controversial sales strategy for an exclusive Patek Philippe timepiece. The limited-edition Nautilus 5711, featuring Tiffany's signature robin's-egg blue dial, became a flashpoint in luxury retail, with customers spending millions on jewelry in hopes of securing one of only 170 coveted watches priced at $52,635. Tiffany sales associates referred to them as 'watch monsters.' These were the obsessives—the affluent clients who believed they deserved one of the rare Patek Philippe Nautilus 5711 watches made in Tiffany's robin's-egg blue. To commemorate 170 years of collaboration between the two heritage brands, Patek Philippe produced just 170 timepieces. As demand soared, Tiffany's leadership—led by Americas head Christopher Kilaniotis—recognized an opportunity: they could prompt clients to spend millions on jewelry for a chance to buy the $52,635 watch. Salespeople were allegedly encouraged to guide top clients toward purchases worth $2 to $3 million. There was no official waitlist and no guarantees. Just whispers, strategy—and frustration. '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.'
Fashion Network
6 days ago
- Business
- Fashion Network
Tiffany's £39,000 Patek watch strategy backfires among elite clients
Salespeople were allegedly encouraged to guide top clients toward purchases worth $2 to $3 million (£1,500,000 to £2,250,000). There was no official waitlist and no guarantees. Just whispers, strategy—and frustration. '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 (£12 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 jewellery 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 24 July. 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 realise 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 (£1,875,000) each in jewellery sales, the company stood to gain nearly $300 million (£225 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 (£3 million) jewellery purchase tied to a delayed custom necklace, ultimately settling out of court. Sources confirm that the client had purchased the jewellery to access the Blue Dial. Another client, who was asked to spend $5 million (£3,750,000), 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 (£1,500,000), 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 (£56,250), 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 jewellery market share has dropped by one percentage point since 2022, while Cartier's has increased. In contrast to LVMH's flat watch and jewellery 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 jewellery 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 jeweller for allegedly pressuring him to purchase $221,000 (£165,750) worth of watches and jewellery 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 jewellery gala, where staff told guests that spending $2 million (£1,500,000) 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 (£4,650,000) in December 2021 to around $1.2 million (£900,000) 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 anaesthesiologist, was told by Tiffany staff that buying jewellery 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.' ($1 = £0.75)
Fashion Network
6 days ago
- Business
- Fashion Network
Tiffany's $52,000 Patek watch strategy backfires among elite clients
Salespeople were allegedly encouraged to guide top clients toward purchases worth $2 to $3 million. There was no official waitlist and no guarantees. Just whispers, strategy—and frustration. '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.'
Fashion Network
6 days ago
- Business
- Fashion Network
Tiffany's $52,000 Patek watch strategy backfires among elite clients
Salespeople were allegedly encouraged to guide top clients toward purchases worth $2 to $3 million. There was no official waitlist and no guarantees. Just whispers, strategy—and frustration. '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.'
Toronto Sun
6 days ago
- Entertainment
- Toronto Sun
Tiffany angers rich clients who wanted to buy rare Patek watch
Published Jul 17, 2025 • 12 minute read Leonardo DiCaprio, Jay-Z, LeBron James, Corey Gamble, Ed Sheeran Illustration: 731; Photos: Getty Images (5) Photo by Illustration: 731; Photos: Getty / Illustration: 731; Photos: Getty Reviews and recommendations are unbiased and products are independently selected. Postmedia may earn an affiliate commission from purchases made through links on this page. (Bloomberg) — Tiffany salespeople called them the 'watch monsters.' The obsessives. The wealthy shoppers who were sure they should be among the chosen few to get their hands on a rare timepiece from Patek Philippe. This advertisement has not loaded yet, but your article continues below. THIS CONTENT IS RESERVED FOR SUBSCRIBERS ONLY Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. SUBSCRIBE TO UNLOCK MORE ARTICLES Subscribe now to read the latest news in your city and across Canada. Unlimited online access to articles from across Canada with one account. Get exclusive access to the Toronto Sun ePaper, an electronic replica of the print edition that you can share, download and comment on. Enjoy insights and behind-the-scenes analysis from our award-winning journalists. Support local journalists and the next generation of journalists. Daily puzzles including the New York Times Crossword. REGISTER / SIGN IN TO UNLOCK MORE ARTICLES Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account. Share your thoughts and join the conversation in the comments. Enjoy additional articles per month. Get email updates from your favourite authors. THIS ARTICLE IS FREE TO READ REGISTER TO UNLOCK. Create an account or sign in to continue with your reading experience. Access articles from across Canada with one account Share your thoughts and join the conversation in the comments Enjoy additional articles per month Get email updates from your favourite authors Don't have an account? Create Account They descended on Tiffany & Co. a few years ago, when the retailer began offering a limited edition Patek Philippe Nautilus 5711 with a dial in the jeweller's signature robin's-egg blue. Patek crafted 170 of them, a tribute to the number of years the brands had worked together. Tiffany's hope was that the buzzy timepiece would help attract – and retain – high-end shoppers who weren't already regular customers. Yet the Blue Dial — as it became known — was never for sale in the traditional sense. Demand was so high that Tiffany executives, including Americas head Christopher Kilaniotis, realized clients would be willing to spend millions of dollars on other jewelry for the chance to buy the coveted watch, which was priced at $52,635. Salespeople were instructed to guide top prospects toward spending $2 million to $3 million, according to people familiar with the sales strategy. No official waitlist. No guarantees. This advertisement has not loaded yet, but your article continues below. 'Everyone wanted that piece,' said Oliver R. Müller, a luxury watch consultant based in Aubonne, Switzerland. 'With rich people, if you tell them they can't have something — they want it,' he added. 'It's called the psychology of billionaires.' When the Blue Dial arrived, wealthy shoppers' desire for luxury watches was in overdrive in the midst of a pandemic-era buying mania. It instantly became one of the most talked-about objects in the luxury world. For Tiffany, the timing was opportune. The jeweler was barely a year into its new era under LVMH Moët Hennessy Louis Vuitton SE, which bought it for $16 billion in 2021. The largest luxury acquisition on record underscored the outsized ambitions that LVMH had for Tiffany, a beloved American brand that had nonetheless become a bit tired. Tiffany sales rose 4% in the five years through January 2020, down from a nearly 60% spike during the prior half decade, Bloomberg data show. Your noon-hour look at what's happening in Toronto and beyond. By signing up you consent to receive the above newsletter from Postmedia Network Inc. Please try again This advertisement has not loaded yet, but your article continues below. But what began as a celebration of the iconic jeweler and watchmaker has evolved into a cautionary tale — a lesson in how exclusivity, if mishandled, can dim the glow of luxury. Since the Blue Dial's release, Patek Philippe shut three of its four boutiques in Tiffany stores in the midst of a broader consolidation. Tiffany's fractured relationship with one of the world's most beloved watchmakers drags on revenue to this day and is one reason why salespeople have struggled to meet ambitious monthly targets at stores where Patek closed its boutiques, according to several people familiar with the situation. The details of how Tiffany angered many within a passionate community of watch lovers haven't been previously reported and are based on interviews with nearly two dozen people familiar with what happened who asked not to be identified discussing private matters. This advertisement has not loaded yet, but your article continues below. Tiffany's press office declined to comment, while Kilaniotis and Tiffany Chief Executive Officer Anthony Ledru didn't respond to requests for comment. LVMH has recently told analysts and investors that the changes being implemented at Tiffany, including a focus on selling its high-end Icons collection and lavish store renovations, are paying off. 'We are seeing continued very good progress on Tiffany's transformation plan,' LVMH Chief Financial Officer Cécile Cabanis said during an earnings call in April. Tiffany is the largest contributor to LVMH's jewelry and watches division, which also includes brands such as Bulgari and Tag Heuer. When LVMH reports earnings on July 24, analysts surveyed by Bloomberg forecast the division will show a 1% revenue decline in the most recent quarter from a year earlier. This advertisement has not loaded yet, but your article continues below. Patek declined to comment on its relationship with Tiffany or the sale of its watches. In a December 2021 interview with the New York Times, Patek President Thierry Stern seemed to foreshadow the issues that were to come. Tiffany executives, he said, 'may not realize how difficult it's going to be to choose the clients' to purchase the Blue Dial. The business logic of the jewelry-sales plan was straightforward for Tiffany: If even two-thirds of the Blue Dials unlocked $2.5 million in jewelry sales apiece, Tiffany stood to generate almost $300 million. Salespeople stood to make commissions of as much as $100,000 on such transactions. RECOMMENDED VIDEO When the frenzy started, some former Tiffany staffers said they were instructed by executives to avoid putting the unofficial quid pro quo in writing, to avoid giving clients the impression that purchasing jewelry guaranteed a Blue Dial. The allocation was at the discretion of Tiffany executives, and the process was all over the place, these people said. This advertisement has not loaded yet, but your article continues below. And that's why it was so bad from a client relations perspective, they said. For some 'watch monsters' — as some in the salesforce came to call the most aggressive would-be customers — the glittering prize proved elusive. They spent princely sums on Tiffany jewelry only to come away empty-handed, according to former staff. Other long-time Tiffany and Patek customers told employees they were resentful that their purchases over the years seemingly counted for nothing. And even some buyers who snagged a Blue Dial became irate when the watches began to show up on the resale market, selling for less and less. In November 2023, one client sued Tiffany over issues with the sale of almost $4 million in jewelry, alleging in court documents that she never received a custom-made, yellow-diamond necklace the company said it would deliver. This advertisement has not loaded yet, but your article continues below. While the Blue Dial wasn't mentioned in the legal filings, people familiar with the matter say the customer purchased the jewelry in part to acquire the watch, which she ultimately received. She and Tiffany settled in August. The client and her lawyers didn't respond to requests to comment. Another client who said he was asked by Tiffany salespeople to spend $5 million to be able to buy the watch was so taken aback by the proposal that he sold several other Patek Philippes he bought from Tiffany in protest. The business owner, who is in his 30s, said he didn't buy the watch and he no longer shops at the jeweller. He asked not to be identified to avoid publicizing his interest in collecting luxury watches. An entrepreneur based in the Tri-State area who bought the Blue Dial said he spent over $2 million on jewelry in the belief that the purchases would make him eligible for the watch. Now when he wears the watch, he says, other owners ask him how much jewelry he bought to secure the timepiece. Tiffany salespeople asked him to keep the amount he spent confidential because the company sometimes asked different clients to spend varying amounts, he said. This advertisement has not loaded yet, but your article continues below. In the end, the blowback was so severe that Tiffany decided to allow some purchasers to return the jewelry they bought in the hopes of getting the watch, according to former staff. That's an exception to the company's typical policy of not taking back most items that sell for more than $75,000, they said. Patek Philippe, which is closely held, has said the boutique shutdowns 'were part of our global consolidation' to reduce the number of locations that sell its goods, but former staffers said Tiffany managers told them they thought it was triggered in part by Patek's frustration with how Tiffany handled the sale of the Blue Dial. Selling more to the type of customers who spend millions of dollars each year on jewelry and watches was part of the strategy that LVMH Chief Executive Officer Bernard Arnault and other executives laid out to fuel Tiffany's growth. This advertisement has not loaded yet, but your article continues below. Instead, some of those customers have shifted to rivals like Cartier. While the Swiss jeweller has increased its share of luxury jewelry sales globally, Tiffany has dropped by one percentage point to 11% since 2022, according to data analytics firm Euromonitor International. At LVMH's jewelry and watches division, sales were flat in the two years through the end of 2024. Meanwhile, sales at Compagnie Financière Richemont SA's jewelry division, which includes Cartier, Van Cleef & Arpels and other brands, grew 14% over the two-year period through March. RECOMMENDED VIDEO One reason for the excitement around the watch was that it symbolized the end of an era. The Blue Dial would be the swan song for the entire 5711 line of watches, which Patek was discontinuing. And the special-edition timepiece also marked the beginning of LVMH's reign at Tiffany. 'This was my little gift to say congratulations on buying Tiffany,' Patek President Stern told CNBC in 2021. This advertisement has not loaded yet, but your article continues below. Since Patek only has a few stores, it relied on Tiffany to sell the watches — a symbiotic business relationship the two have had for a century and a half. The jeweller is one of a limited number of US retailers authorized to sell Pateks on behalf of the Swiss watchmaker. Some of those sold at Tiffany carry a stamp on the dial from both brands, a highly-sought after detail among watch aficionados. As the excitement built among would-be watch buyers, Tiffany employees told some that they had been placed on a 'wish list.' Some former staff said they were told to avoid saying 'waitlist' since that overtly reminded the clients, many of whom are titans of global business accustomed to getting what they want when they want it, that they were, in fact, waiting. This advertisement has not loaded yet, but your article continues below. In early 2022, as watch customers maneuvered for their chance to buy the Blue Dial, photos began to pop up online of celebrities wearing the timepiece — Jay-Z, Lebron James, Mark Wahlberg and Leonardo DiCaprio. They got the watch quickly, which didn't go over well with some of the 'watch monsters,' according to former employees. Conditioning the sale of one item on the purchase of other items is known in the luxury industry as 'bundling' or 'tying.' Since the watchmakers set the prices that retailers can charge, and prices for certain models are sometimes well below what customers would be willing to pay, bundling becomes a way for companies like Tiffany to drum up demand for their jewelry. Still, retailers are often coy about the practice, partly because the watchmakers consider it distasteful and in violation of their agreements with the stores, according to Eric Wind, the owner of Wind Vintage, which buys and sells pre-owned watches. This advertisement has not loaded yet, but your article continues below. There's a whiff of hypocrisy, though, Wind says. Watchmakers often encourage clients to buy less desirable watches from their own stores or from retailers in order to ultimately purchase their dream timepiece: You buy these three Pateks and you're more likely to get that more desirable Patek. And jewellers point out that watchmakers assign them an impossible task when they only dole out several luxury timepieces to sell each year despite a waitlist that can stretch to hundreds of clients. Salespeople have to come up with some criteria to divvy up the watches, jewellers argue, and usually that's purchase history. Across the industry, the practice often breeds resentment. One man sued a California jeweller in 2023, alleging that a salesperson encouraged him to spend more than $168,000 over 18 months on three Patek watches he didn't really want and purchase a $53,000 diamond bracelet in order to be able to buy a Patek Philippe 5980/1R-001 timepiece that he really did want. He never got the desired watch. The client asked the court to dismiss the case, without the possibility to refile. Lawyers on both sides declined to say whether there was a settlement or otherwise elaborate on the basis for the client's request. This advertisement has not loaded yet, but your article continues below. Two shoppers sued Hermès in 2024, alleging the luxury house employed a 'scheme' requiring consumers to purchase shoes, scarves, belts and jewelry in order to 'be offered the opportunity to purchase a Birkin' handbag. Lawyers for Hermès have asked a judge to dismiss the case, saying that the brand 'does not require a customer to have purchased its many other products before purchasing a Birkin.' In April 2022, many of the watch lovers finally got a chance at a golden ticket: An invitation to an exclusive event Tiffany was hosting in Miami to sell its most expensive jewelry. The soiree came just months after a Blue Dial changed hands for about $6.2 million — more than 100 times its retail cost — after a December 2021 charity auction. While veteran collectors consider such charity auctions more of a marketing stunt than an indication of market demand — sometimes the watchmakers themselves are involved in the bidding, for example — others said they saw the price as proof that the watch was a no-brainer investment. This advertisement has not loaded yet, but your article continues below. In Miami, Tiffany executives reiterated to staff that clients needed to spend at least $2 million to be eligible to buy the Blue Dial, though managers also warned employees not to give clients the impression that buying the jewelry was a formal agreement that guaranteed the ability to purchase the watch, according to people familiar with the matter. Top clients were put up in five-star accommodations in Miami with all meals covered during their two- to three-night stay. There was also a cocktail party and a gala dinner. RECOMMENDED VIDEO Clients hoping for a Blue Dial snatched up multi-million-dollar pieces, the people said. They kept asking salespeople if spending $1 million on that ring and $2.5 million on that necklace would guarantee them the watch. Sales surpassed executives' estimates, setting a new revenue record for that type of event. This advertisement has not loaded yet, but your article continues below. The promise of the LVMH era at Tiffany seemed to be materializing. But things went downhill from there, the people said. They said some clients who spent millions at the Miami event and in the following weeks to get the watch ultimately weren't offered the opportunity to buy. Even some who were able to purchase it grew frustrated over the long wait, they said. By November 2022, some watch owners began to sell them on the secondary market. One went for about $3.2 million at a Christie's auction. In May 2023, around $2.5 million at Christie's. In May 2024, one sold for $1.2 million at online auction Loupe This. Most recently, sales for the Blue Dial have hovered around $1.2 million, according to data from WatchCharts. Tiffany was supposed to be meticulous about vetting watch owners to ensure they wouldn't turn around and sell the Blue Dial, according to former staff. Patek executives often present the watches as paragons of Swiss engineering and design to be cherished, not investments to be traded. For some Tiffany and Patek clients, watching the flipped watches decline in value was the final straw. Some complained directly to Patek Philippe. This advertisement has not loaded yet, but your article continues below. Despite the frustration that built among some customers over bundling the sale of the Blue Dial and jewelry, Tiffany still encourages at least some clients to spend money on diamonds and gold pieces to improve their chances of getting different models of highly desired Patek watches sold at the New York store. Charlie Ho, an anesthesiologist who lives outside of Boston, visited Tiffany's flagship Manhattan store in December 2024 to inquire about purchasing a Patek Philippe 5396R model in gold with the jeweller's stamp. While it's not as rare as the Blue Dial, it's still coveted. According to Ho, a salesperson told him it could take a long time to receive the one he wanted. Then he said that perhaps purchasing Tiffany jewelry might help accelerate the process. This advertisement has not loaded yet, but your article continues below. But Ho has played that luxury game before — and it didn't work. About a decade ago, he says executives at Ferrari NV told him that if he bought several sportscars, he would have a shot at nabbing the special edition model he'd dreamed about for years. He ultimately bought five Ferraris, but never got the one he wanted. Luxury bundling lesson learned, Ho says. A Ferrari spokesperson declined to comment on Ho's experience but said: 'Ferrari maintains a highly transparent relationship with our clients, and our allocation strategy does not involve, nor does it reflect, such behaviour.' Ho says he will wait as long as it takes to get the Patek he wants or buy the model on the secondary market — but he won't spend money on jewelry to close the deal. 'I don't want to play the game anymore,' Ho says. Celebrity World MMA Sunshine Girls Relationships
