MOST PREMIUM-WATCH companies, even those with venerable names that can be traced back to the early days of pocket watches, are today owned by conglomerates that market not only watches but other luxury items, be they fountain pens or Champagne. Many buy their watch movements off the shelf from companies that produce tens of thousands of movements each year, allowing them to focus on decoration, presentation, and marketing rather than the inner workings of the actual watch mechanism.

In contrast, Patek Philippe produces virtually all of the tiny individual pieces needed for the assembly of a handcrafted timepiece in its headquarters on the outskirts of Geneva, in a modern building where the lobby atrium is decorated with a ceiling-high bas-relief of the company's most famous complicated movement, the Caliber 89. This makes their production process more time-consuming and more personal. The development of a new model may take four to five years or more - too slow to keep up with fashion, but painstaking­ enough to ensure that the piece will last 50 years or more. The value of the watches is indisputable; a recent Vox magazine survey of the 10 most expensive vintage watches sold at auction found that Patek Philippe made all 10. The most expensive sold for more than $4 million.

The keeper of this tradition is Philippe Stern, whose grandfather bought the company in 1932. Stern's father, Henri, ran the company before him, and he is preparing his son Thierry, 35, to take over when he steps down. No one would be surprised if one of Thierry's young children eventually takes over - one of the boys is named after Adrien Philippe, who helped found the company long before the Sterns were involved.

"One of the big advantages of a family business is continuity," says Stern, an elegant, quiet man of 68 who in his younger days was a member of the Swiss national ski team as well as a champion sailor who won many regattas on Lake Geneva. "Business is always conducted the same way, with no big changes. We concentrate on watchmaking; that's what we do best. We don't want to diversify. We have a long-term vision, and we are not obliged because of shareholders to always watch the value of the shares, to watch if the dividends will grow. So we can make long-term investments, like coming here to this building in 1996. That was a big investment, and maybe shareholders would have preferred a big dividend. But this was part of our strategy."

The decision not to diversify means logo-driven consumers won't find Patek Philippe pens or leather jackets or key chains. They are not licensing their name to anyone making chic sunglasses or fancy jewelry. They make watches. Their annual production of timepieces­ is not limited by demand, which is rising, but by the paucity of highly skilled watchmakers and the need to train them slowly and carefully so that standards can be maintained.

"To train a young person, on average, it takes almost 10 years to reach the top," Stern says. "We want to grow, but that's not the main goal. Our growth is slow because we first have to find the people, and that takes time. You can see we have many young people in our workshops. We want to be sure they have the know-how. We are training them here. We have a school for them. So our production is limited."