The Secondary Watch Market

Welcome to the 2nd edition of Maximalist! Dive into the ultimate guide, filled with insider insights into the world of fashion, art, real estate, travel, jewelry, and horology.

The world of luxury is never boring, and this week is no exception. Let’s dive in!

Markets

Loro Piana, the new IT brand?

"Quiet luxury" is the latest trend, emphasizing understated elegance over overt displays of wealth. Brands like The Row, Jil Sander, and Loro Piana epitomize this aesthetic, which avoids flashy logos and short-lived trends. The focus is on the quality and craftsmanship that only reveal themselves upon closer inspection. This shift from logo-heavy designs is seen as refreshing. Achieving the "quiet luxury" look requires investing in basics with expert tailoring and subtle accessories. Neutrals dominate this style, though occasional color pops are acceptable. The article provides five foundational tips to master this look. Read more →

Chanel is Opening a Diner!

Chanel is launching a retro-inspired pop-up, the "Lucky Chance Diner," in Williamsburg, Brooklyn, to celebrate its new fragrance, Chance Eau Fraîche Eau de Parfum, and its inaugural Chanel Fragrance and Beauty Boutique in Brooklyn. The diner will showcase the Olivier Polge-composed fragrance, described as a "sparkling, floral, and woody" scent. Visitors can enjoy a free, personalized fragrance journey exploring the perfume's four floral variations. The diner, adorned in pastel colors, offers interactive games, photo opportunities, and diner-inspired treats. Located at 225 Wythe Avenue, it's open from September 8–10, 11:00 a.m. to 7:00 p.m. Reservations are advised, but walk-ins are welcome. Read more →

The US Open’s collaboration with AMEX

American Express is celebrating its 30th year of partnership with the US Open Tennis Championships and has renewed its multi-year alliance with the USTA. From August 28 to September 10, 2023, Card Members and tennis enthusiasts will enjoy exclusive benefits at the USTA Billie Jean King National Tennis Center. In collaboration with Break the Love®, a social sports platform, American Express is granting free access to over 500 racquet sports courts and clinics in the NYC area. On-site experiences include the US Open American Express Fan Experience with interactive games, relaxation services, and digital collectibles. Additionally, Card Members can access exclusive lounges, enjoy discounts, and shop from local NYC businesses at the American Express Shop. Read more →

Rolls-Royce La Rose Noire Droptail

Rolls-Royce has unveiled "La Rose Noire Droptail," a bespoke car inspired by the Rosa Black Baccara, a deep burgundy-red rose. Commissioned by a client who wanted to honor the rose's distinct character and her affection for France, this masterpiece is rumored to carry a price tag close to $30 million. Alex Innes, head of Rolls-Royce Coachbuild design, mentioned that the rose's rich character influenced the car's design, blending modern concepts with traditional craft techniques. La Rose Noire is the first of four in the Droptail series and the third model in the Coachbuild division, where Rolls-Royce crafts personalized vehicles. The car showcases exceptional craftsmanship, with the exterior paint mirroring the Black Baccara rose's shade and intricate interior detailing. An exclusive Audemars Piguet timepiece, tailored for this project, accompanies the car. Read more →

The Secondary Watch Market: A Deep Dive into Current Trends and Future Predictions

The luxury watch market has always been a fascinating realm of craftsmanship, heritage, and investment. However, recent trends indicate a shift in secondary market prices for some of the most sought-after brands, including Rolex, Audemars Piguet, and Patek Philippe. According to a research paper from Morgan Stanley, these brands have seen their secondary market prices drop to their lowest in the last two years.

The Rise and Fall

The 18 months leading up to March 2022 witnessed a significant surge in prices for these luxury watch brands. However, by the end of 2022, there was a sharp 26% decline from the peak prices in March for the 60 most traded watches, as per the WatchCharts Overall Market Index. The first half of 2023 has also not been very promising, with an 8% decline from January to June.

Breaking down these numbers, Rolex experienced the least decline at 2%, while Patek Philippe and Audemars Piguet saw steeper drops of 7% and 8%, respectively. The current prices for these highly traded watches have reverted to what they were around June 2021. However, it's noteworthy that they still remain above retail prices for models that have long waiting lists.

The Secondary Market Premium

Despite the decline, 72% of the models tracked by WatchCharts still command a premium on the secondary market compared to authorized dealer prices. Rolex dominates this premium segment, with almost half of the references. Patek Philippe, Audemars Piguet, and Vacheron Constantin make up the remaining portion.

WatchCharts, which analyzes advertised and sold prices on the secondary market, indicates that these prices are considerably higher than what dealers offer. Dealers, after accounting for costs like authentication, servicing, and refurbishing, tend to offer much lower prices. However, good luck getting a Nautilus or Royal Oak from your AD as a first-time buyer. These purchases typically come with a “2 for 1” special where AD’s highly suggest you buy a less desirable model first, and then they will offer you a retail-priced Patek. Of course, this varies, but consider yourself lucky if it only takes buying one not-so-popular model first in order to get your hands on a retail-priced Nautilus or Royal Oak.

Comparing the Big Three with Other Brands

The privately owned 'Big Three' (Rolex, Patek Philippe, and Audemars Piguet) have consistently outperformed brands from publicly listed groups like Richemont and Swatch Group. For instance, Omega's catalog has been heavily discounted on the secondary market, with prices dropping to 28% below retail in June. This decline might be attributed to a global price increase for its new watches that month. Brands under Richemont’s Specialist Watchmakers division have seen discounts drop from 13% below retail in February to 19% in July. However, some watches, like Vacheron Constantin’s Overseas family and IWC’s Big Pilot ceramic pieces, have fared better.

The Future of the Secondary Watch Market

Morgan Stanley's predictions for the future are not very optimistic. They believe that secondary market prices have further room to fall, and I second that. This prediction is based on the fact that inventory levels remain high compared to periods when prices were on the rise. The overall inventory level remains elevated, the number of customers able to buy these watches has decreased, and the median number of days watches stay on the market before being sold has increased. Given these factors, it's highly likely that secondary watch prices will continue their downward trend through the third quarter of 2023.

The Broader Perspective

The luxury watch market is influenced by various factors, including global economic conditions, brand strategies, and consumer preferences. Moreover, the secondary market values of top watches from brands like Rolex, Audemars Piguet, Patek Philippe, and Richard Mille are often seen as indicators of their brand equity and desirability.

In recent years, watches from these brands have become investment pieces, with many models appreciating in value over time. However, like all investments, they are subject to market fluctuations. The current decline in secondary market prices might be a temporary phase, or it could indicate a more significant shift in consumer preferences and market dynamics.

While the luxury watch market is currently experiencing a downturn in secondary market prices, it remains to be seen how brands will adapt to these changes and what strategies they will employ to maintain their prestige and desirability in the eyes of consumers.

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