Swiss watchmakers put employees on state-funded leave as luxury demand disappear
fortune.com
fortune.com
That sounds more like a return to the mean rather than "demand disappear[ing]"
https://www.baiguan.news/p/china-luxury-swiss-watch-consumpt...
> Sowind’s Pruniaux said there are few signs of improvement from the Chinese economy, meaning the industry might only see a partial recovery in 2025. Sowind’s sales will likely be flat or will fall slightly in 2024, he said. That compares with growth of just under 10% last year and a near-doubling of sales in 2022.
Seems like a bubble bursting to me...
A Rolex GMT BLNR (Batman) was hitting grey market prices in the UK near £20k at its peak, whereas they are down at around £11k. Still selling over retail (~9.5k), but a huge correction.
I think much danger still lies ahead for the mid/high brands like Rolex/Omega/etc. Large 2nd hand watch dealers have very high stock levels. Watchfinder for instance currently has over 2.5k pre-owned Rolexes. Many of these will have been bought well over RRP and I think will still struggle to find many buyers at current prices.
The pre owned retailers are going to find themselves in a real bind as prices reach parity with OEM pricing, as why would you pay more for a preowned item? Previously it was because you wanted the watch NOW! But I don’t think Rolex can continue to play games with the customer via their dealer network much longer in current market conditions, so I would expect OEM availability has to improve, further hitting those grey/pre-owned retailers. In fact, I think in the lead up and during COVID Rolex especially did a lot to damage their reputation with many customers and potential customers. Anybody who has played cat & mouse with a Rolex approved dealer will know exactly what I mean.
Additionally, I think the social/economic landscape has changed greatly in the last two years since COVID, that this might just be the start. I personally know a lot of people that won’t wear luxury or luxury looking timepieces out, due to either fear (theft, numerous recent UK news stories of often violent daylight robbery) or embarrassment (many people feel a sense of guilt wearing £10k+ on their wrist when around people struggling to pay for basics). This sentiment doesn’t hurt them much if it’s short-term, but it massively reduces your buyer pool if it persists long term and your customers are primarily the middle class.
As somebody else mentioned, the top tier luxury/niche brands like Patek don’t need to worry about such matters, their pool of buyers is so small and immensely wealthy, while their yearly output is even smaller than this, demand will always outstrip supply.
This is a good point. Not only is there the theft and social guilt aspect, but there's also the unwanted association with "influencers". 5 years ago no one knew what watch anyone was wearing unless it was a Rolex, but now the general public is far more aware of other brands and what they cost.
What's interesting is why that happened. It was probably a result of having more free cash available.
I don’t think these were dealers selling them under the table either to pump prices. Last I’d heard, Rolex had a retail waiting list since before COVID started, may have changed recently.
Edit: Rolex also supposedly has a marketing budget percentage higher than most brands as well, so there may well be truth to them pumping prices in that manner.
People who had no intention to wear a Rolex IRL flocked to dealerships for the sole purpose of reselling at a profit. Which further inflated the apparent demand, which again inflated aftermarket prices.
It was a bubble, pure and simple. There was a lot of liquidity sloshing around in Covid times that people didn't know what to do with. At least a watch lasts longer than a tulip, so this bubble won't burst as dramatically.
It's just supply and demand.
If you are buying a luxury mechanical watch buy from an independent/family owned company rather than from LVMH or Kering.
If you are getting started with mechanical watches buy an Orient watch (https://orient-watch.com/). You can get one for < $200.
When you want to upgrade - Nomos (https://nomos-glashuette.com/en). $2500 +
Above this is what you can afford but always look for "independent watchmaker + in-house movement".
I also like the designs of Junghans (https://www.junghans.de/en/) but they use a thrid party movement.
My friend is completely crazy about mechanical watches and recommended me getting ~4000€ upcoming watch coming from reputable but not well recognized Italian watchmaker.
They came after few months. Till this day he loves it - and it’s one of his favorites. For myself it was kind of meh and I stopped wearing it after a year or two.
Some years later I Was gifted TAG Heuer and I noticed one thing: that expensive watch main function is signaling. It wasn’t only a time device, but widely recognized jewelry and was a conversation piece.
And a watch today is ultimately useless gadget. Clocks are everywhere and everyone has a pocket watch in a form of smartphone. Taking signaling away only makes such expensive gadget even more useless.
So, like kinda? They're more like a cousin than a sister brand, though.
Brands like San Martin are really showing just how much of the Swiss industry is hype, though. SM are selling watches for $200 that (movement aside) are as well made as $2k Swiss watches. And TBH, I'd rather have a Seiko NH35 than a Sellita SW200 anyway.
Likes of Sugess do it a little better, but comparing it to a $1-2k Christopher Ward or something is silly. Something a bit more hand assembled and finished like Orient Star is probably where you start seeing value against a swiss RRP in terms of East/West divide.
The SM dive GMT I have has tighter endlink tolerances than any watch I’ve owned, better bezel action than most, and finishing at around CW level. Bracelet build quality is better than SRP-level Seiko or CW.
Side by side with a modern Omega, the SM is clearly inferior. Though, honestly, side by side with my early 2000s Omega the SM isn’t that far off, and is better in some ways.
You might be right about QC, but then again there are plenty of Swiss watches that ship out with issues. My CW had to go back to the factory when the movement failed - I haven’t had that happen in any Seiko-powered watch.
As a particle physicist I wouldn't even report this as evidence of a problem.
I assumed no increase as a more modest goal after a couple of years of record sales and the current problems in world economy.
You never see your Zuckerbergs or Musks go around with flashy watches or clothes with Dolce & Gabana plastered over them. Those are mostly on average people who want to signal to their peers that they "made it".
Might not be the case for the tech wealthy crowd as I know these circles less
But for the traditional/family/business wealthy crowd watches are an easy icebreaker, especially if you mention you don’t care about the price and you like them for x other reasons
I get that those $250K one of kind Bugatti/Ferrari watches that have the guts of an internal combustion engine or the functioning planetary solar system on display inside them are good for conversation pieces since they're unique, but What conversation can you make about a bog standard $5k-$10k Rolex?
- Hey, nice watch.
- Yeah thanks, it's a Rolex, it's shiny, golden and it tells the time.
- So kind of like my Casio?
5 seconds of searching Google pulls up examples for both.
On the other hand, the richest people I know seem to wear Apple Watch Ultra a lot, even women who have smalls arms and it looks ridiculous on.
Like everything else, with a monthly payment.
I live in a reasonably wealthy part of the UK. Most developments around me have a mix of affordable (subsidised) and normal housing. In general the subsidised houses have the newer and more expensive cars parked out front whilst the people that can afford their home tend to drive ten year old Volkswagens or similar.
Also if you are wealthy there are good reasons why you might not want to signal that, even within your own family.
IIRC Zuck has closets full of seemingly mundane looking clothes (tshirts, hoodies) that actually have 4-5 $ figure price tags.
Sure they may not have GUCCI or SUPREME plastered all over them but they’re definitely luxury goods.
Likewise for watches. The wannabe rich might indulge in Rolexes but the very rich seem to indulge in watch brands I’ve never heard of.
Plus now you have brands playing the exclusivity card. Sure, you can save up for that Rolex or Hermes or Ferrari but they will refuse to sell it to you unless you’re a “somebody” or have “built up a relationship”.
One question I’m curious of is how many middle managers got furloughed versus labor?
I got sick of smartwatches. One more thing to change every night. One more thing to debate upgrading all the time. One more home screen to manage. More apps to update and deal with. More notifications and interruptions. It’s all too much.
With a little maintenance, my go-to watch will outlive me. My travel watch just needs a new battery when I renew my passport.
This is exactly why I got a cheap $35 "Amazfit" fitness band (a clone of a Xiaomi Band 5 I think). It does things a normal watch won't do, namely count my steps every day and also monitor my sleep patterns, but it goes 2 weeks on a charge, or more. I've never understood why anyone would put up with a watch that needs to be recharged every day. How do you even use it as a sleep monitor if you have to charge it?
Of course, a fitness band like this also doesn't come with so much extra crap like you're referring to ("more apps to update and deal with"); it's comparatively simple.
As for the heart rate monitor, any fitness band will probably give you very different results just depending on how tight it is. I wouldn't consider any of them a substitute for a proper heart rate measurement, simply because of where they are on your body.
All I can say is that, for myself, for the cheap price, it's kinda handy for what I use it for (daily step counting, sometimes telling the time so I don't need to pull my phone out of my pocket, checking my sleep quality, etc.). I haven't noticed any wildly and obviously inaccurate data yet. Sometimes I'm not so sure about the sleep data, but it's hard to say because I don't normally remember when I really did go to sleep or wake up, and don't have a way of cross-checking. I'm not about to spend tons of money on some kind of professional sleep study to do this, so the cheap-o band is better than the data I'd get otherwise, which is nothing at all.
Well, I don't, it's not like it was the only issue with that - all other functions, not dependent on wearing, would glitch too. Alarms would not go off, workouts would not record, or would not export to Strava (and its own fitness app only shown data in km), it would not go into DND with the phone, or would not get out of it. And it could not filter notifications, which, apparently, Android makes very often: playing radio in the car would be accompanied with constant buzzing informing me what song is playing if I did not put it on DND. I junked the thing and replaced with Garmin, which, apparently, is pretty consistent and can detect even HRV. Even if I had faulty hardware somehow (broken alarm in an electronic watch, which works 95% of the time sounds a bit of a stretch) the accompanying app is obviously buggy and hostile to the users.
The sleep monitoring on Garmin is very different from the Mi Band, btw: Mi Band would not detect short wakeups, sleep start was so off that it would start before I went to bed, as I already mentioned, its heartrate during sleep was off Garmin's by ~20%, though not something I'd care about much, and its SpO2 is pretty random at any time so I'd imagine it would not detect sleep apnea if I had one. Also, step count on the Mi Band depends on the hand movement so I'd get 1000 steps in a half an hour on a balance board, Garmin counts much closer to the phone as both track linear movement too so they don't count steps when you're moving your arms while being stationary.
It's sure cheap and the form factor is great but it is not a reliable source of any data. I would not even trust its time readings, as far as I can tell it has not glitched on me but I did not have it long enough. There is a reason Garmin manages to sell $1000+ fitness watches despite competition from both cheap bands and Apple's.
You probably aren't actively looking. The market for sub-$150 retro-ish ("inspired" by the 1980s/1990s) quartz watches has exploded over the last few years [1].
A month or so ago, I "splurged" and bought a $300 solar-powered analog quartz watch. It will need a $10 battery replacement once every 15 years or so, and is simple enough to do at home with tools I already have.
This is just my opinion (and you seem like you are the opposite - that's fine), but I think that Apple has completely lost the plot with the Watch concept. It was supposed to be a companion device to the phone that helped reduce screen time while not missing anything important. Now, the Apple Watch is trying to be a kitchen sink on your wrist, with a battery situation that makes no sense. If you were to do all the health tracking it is capable of, you'd need to wear that watch 24 hours a day. But the battery doesn't even last that long. So you can't actually fully use all of the features. It makes no sense.
My Apple Watch has been in a drawer for I don't even know how many months. Where it will probably stay.
I've never felt the need to get a smart watch, they seem badly hobbled by their need for frequent charging, and the Apple watch is so common that it signifies the opposite of fashionable and stylish, more utilitarian and conventional.
[1] https://www.casio.com/us/watches/casio/product.AQ-S800W-1B2V...
That's why I'm doing the tracking with a Garmin. At this point I'd probably only buy the Bin Laden Casio, F91W if I were to get a regular watch, maybe even as a joke present for someone as long as it keeps being disposably cheap. Or some analog model of which I have two in the drawer. I think both are Timex.
But ya, I charge my watch at night and forgo sleep tracking. The health stuff is just a bonus really to payments and unlocking things.
I do think the general popularity of jewelrywatches is dropping as the generations turn over, though. It's a lot harder to convince the old generations of tomorrow to fork over thousands of dollars on a jewelrywatch; status symbols come and go.
Today, I use it to Apple Pay for everything without whipping out my phone or wallet, from restaurants to transit (with Express Transit I don't even have to double click -- I just point my wrist at the card reader).
It tracks my sleep so I know to compensate accordingly if I'm not well rested... as in adjusting how much caffeine to consume.
Its alarms wake me up gently by buzzing (haptics) as opposed to a shrill phone alarm.
I can glance at it to see when my next meeting is, so I know how much time I have to dawdle. (I need my down time throughout the day)
It tells me how loud a room is in dB. You might ask, can't you tell by just listening? Yes, but when I know it in dB, I know whether the ambient noise is going to affect me over a long period of time and that I should use ear plugs or put on ANC headphones. 30-40 dB is ok, but anything above that is annoying. You don't realize how noisy a city truly is -- and cutting that noise out can really do wonders for head space.
It helps me to navigate while walking in the city -- it's easier and works better than than holding up a phone.
I only charge it when I shower (it goes from nearly 10% to full in minutes), otherwise I wear it 24/7.
You can do all of this with a phone, but having all of it on your wrist is just that much more seamless. (no need to whip out your phone)
I didn't miss my Tissot at all.
I agree, most people I see are wearing an Apple Watch.
I personally haven't bought one as I don't see the need. I take my phone with me everywhere already, why do I need duplicate functions on the watch? And for those occasions where I might not have my phone with me -- it's almost always by design and I don't want notifications on a watch. I also don't want to hassle with charging a watch daily or every other day.
So I'm not switching from my analog watch anytime soon.
Looking at it from the outside there were big gains in crytpo and the stock market. Which drove a lot of buying. Now as there are wars raging, uncertainty about the biggest economies in the world and what their output will be in the coming years seems to be playing a larger part than corruption from what I am seeing.
Also the high end watch manufacturers seem to be shooting themselves in the foot by trying to control the secondary market for used watches which has driven used prices up. I feel the prices are at a point now where even very affluent people may not want to spend money on them as they are way overpriced compared to just 4 years ago.
But I have also seen many luxury watches in particular be a vector for identifying corruption, so I would expect a lot more corruption-funded purchases especially given how conveniently you can move hundreds of thousands of dollars in that form-factor.
Countries have been "cracking down on corruption" forever.