Before this year’s edition of the Baselworld show, professionals and onlookers alike were concerned about the state of the Swiss watch industry. This is not surprising given sales volume has been in decline for two consecutive years. I personally did not attend this year’s show but I did hear that it was much more low-key than previous years. While some professionals attribute the watch industry’s decline to China’s and Russia’s economic slowdown, I believe it’s more complicated than that.
First of all, on the production side, the exclusive brands are making and focusing their efforts on more expensive watches. Today, to buy something decent you have to spend at least $5,000, yet, as a long-time watch lover, I remember 35 years ago, it used to be much less for comparable models (even when taking inflation into account). Today, with the production of so many limited-edition watches and more complicated timepieces, prices are on the rise. As a result, higher prices translate to a tougher barrier to entry for consumers.
Higher prices are also evident in the craziness we are witnessing in the vintage watch market. Hot ticket items include the Rolex Submariner ref. 5513, Breguet Type 20, and the Vacheron Constantin 222, to name a few. Of course, with such heavy interest in these models, prices soar at auctions. Plus, the Rolex vintage market is charging full steam ahead with pieces sold at never-before-seen prices. On March 22, 2017, Bloomberg reported that 1,271 lots at the Geneva auctions represented a total volume of $63 million.
Then there’s, of course, the abundance of online auctions, gray market websites, and online retailers specializing in pre-owned watches—Chrono24, Jomashop, Bob’s Watches, StocksX (“the stock market of things”), and the like. Let’s not forget about the low-profile but successful companies that specialize in a very small corner of the market, such as pre-1979 OMEGA Speedmasters or only Rolex GMT-Masters.
The increased interest in watches is thanks in part to the thriving watch blog and online magazine scene. Spearheaded by websites likes Hodinkee and ABlogToWatch, it seems like every week a new watch-focused website is launched to tell us what’s new, what’s hot, what to buy, and what to avoid. What’s more, many of these websites are supplementing their daily information with special edition watches and/or accessories bearing their name.
All of this may have you thinking, “Wow, wait a minute, the watch market is actually booming!” But, let’s ask ourselves, can the market really sustain so many companies, so many options, and so many concepts fueled by so much marketing and so much information?
We can’t talk about the state of the watch industry without discussing its biggest challenges—counterfeit products. There are fakes, super fakes, Frankenstein watches, and after-market customization, just to list a few. And I’m not talking about replica watches sold for $10 in dark alleys. There are some fake luxury watches today that are so incredibly sophisticated that it’s becoming a big concern for even the most knowledgeable of watch experts. A step down from the fakes, but almost as deceiving, are dealers that—either on purpose or due to lack of proper knowledge—sell goods without all the correct information. It’s indeed very disappointing to learn that the ref. 5513 you just purchased is actually from 1967 rather than 1966, thus shaving off a huge chunk of its value. Deceitful deception or blatant ignorance on the part of the seller? This is a reality watch enthusiasts have to deal with regularly.
Lately, I’ve been hearing that people are fed up with the marketing, the PR, and the embellished tales. There have been too many stories of unscrupulous “dealers” ripping off unsuspecting and uneducated buyers. Naturally, buyers want an authentic and truthful relationship with merchants they can trust. Clients want to go in knowing every transaction will be an honest one. This is not too much to ask. Legitimacy is, in fact, fundamental to what business is about—particularly when dealing with items such as luxury and vintage.
I think we find ourselves in a remarkable era where technology and the Internet are revolutionizing the watch business. It’s causing absolute upheaval in an industry that hasn’t really changed much in the last 200 years. Yes, big global economies slowing down certainly have an effect on the luxury goods market, but so does the possibility of acquiring fine timepieces from other avenues rather than just authorized retailers. However, these other outlets must control the counterfeits and deceptions if they are looking for longevity and legitimacy.
It will be very interesting to see how things in the watch business will turn out in general and who will survive in specific. Is the way forward to keep pushing powerhouse luxury brands with global exposure? Or small, niche businesses whose central philosophy remains focused on small-batch craftsmanship, precision, and beauty? Or perhaps, a new concept we haven’t even thought of yet. Only time will tell.
Given these conditions, it’s even more imperative that at Laurent Fine Watches we work harder to make sure each transaction is a happy one. As a watch lover, aficionado, and professional, it’s my mission to help you to discover, choose, and buy the watch you want. And more importantly, I want to develop meaningful and honest relationships with my clients as they embark or continue on their journey of collecting fine vintage and contemporary timepieces.
Laurent Martinez ✦ Laurent Fine Watches ✦
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