Is the Luxury Watch Market Turning a Corner?

Luxury watch enthusiasts are hoping that a two-year stretch of plunging prices and sagging demand is nearing an end.

Hard evidence for a rebound is scant: The Bloomberg Subdial Watch Index, a closely watched measure of the secondhand prices for the 50 most popular watch models, is up about 1 percent from multi-year lows hit in early October. A few watchmakers and retailers, including Japan’s Seiko Group and Watches of Switzerland, reported sales growth in their most recent quarters. But sector stalwarts such as the watches divisions of LVMH and Richemont as well as Swatch Group have all reported depressed sales in recent financial reports.

For some beleaguered collectors, mixed news counts as a win. The luxury timepiece category experienced a classic boom and bust since the pandemic, as newcomers piled into the market looking to flip Patek Philippe Nautilus 5711/1As and Rolex Daytonas. But the resale bubble popped in 2022, and as Swiss watchmakers continued to flood the market, demand dried up amid an economic slowdown in China.

While the numerical evidence for a recovery is still hazy, some observers believe watches will see renewed interest from consumers fed up with soaring prices for handbags, designer logos and other “soft” luxury goods. Others are turning to traditional timepieces after growing disenchanted with high-tech offerings. In August, watch analyst Oliver Müller predicted that Rolex will soon overtake Apple as the world’s largest watchmaker in terms of sales.

“There’s something about watches that feels more permanent than other luxury items,” said Brynn Wallner, founder of Dimepiece, a media platform focusing on women and watches. “I get texts once a week from friends being like, ‘Okay I’m finally ready to buy my first big girl watch.’”

Watchmakers are also showing more discipline. In the first nine months of 2024, exports dropped 2.7 percent compared to the same period last year, according to the Federation of the Swiss Watch Industry.

There’s something about watches that feels more permanent than other luxury items.

Still, it may be too soon for the vibes Wallner identified to translate into a sustained recovery. One X-factor: whether collectors burned two years ago will come back.

“When I talk to collectors today, people seem to be much more open to pressing the buy button than a year ago,” said Tim Stracke, co-chief executive of watches resale platform Chrono24.

Here, views differ.

“Watches are staying on the market longer before they sell and consumers are much more patient,” said Charles Tian, founder of WatchCharts. “It’s a buyer’s market … That’s why I’m not predicting within the next three to six months that we’d see broad-based stabilisation.”

There’s more agreement that the changes seen in the tradition-bound watch industry during the boom years will likely outlast the bust.

Many watchmakers have continued to court underserved customers — especially women — and push more extravagantly priced pieces between $10,000 to $100,000, or higher.

Grand Seiko, the premium brand under Japan-based Seiko Group, for instance, plans to expand its offering in the $10,000 to $15,000 range, according to Brice Le Troadec, president of the Grand Seiko Corporation of America, as well in smaller styles targeting women. The brand is continuing its retail expansion in the US after opening new stores in Atlanta and Honolulu last week.

And the appeal of mechanical timepieces in a tech-dominated society remains.

“There’s something intrinsically appealing about watches as a product category as the world becomes more technologically advanced and connected, and as electronics become more disposable,” said Tian. “Luxury watches and mechanical watches are the opposite of that. There’s craftsmanship, art, engineering, brand heritage and history, and the most durable watch will outlast one lifetime.”

All the while, watches have become a larger part of the mainstream conversation around fashion and culture.

“You see people like Tyler, the Creator out here with his Louis Vuitton trunks and luxury cars, but he also has this incredible collection of vintage ladies Cartier watches,” said Wallner of Dimepiece. “Things like this opened a lot of people’s minds about how watches can be worn.”

Watch brands have historically shied away from treating their products like fashion, which runs on trend cycles and cues from culture, and therefore has a far faster life cycle. But lately, the savviest brands have looked to the organic media coverage of watches to inform their product development. As an example, Wallner pointed to Cartier, which rereleased its vintage Baignoire model in 2023 after the watch found a new cult following in previous years.

As with any sector, there are frontrunners outperforming the industry as a whole by remarkable margins. The Swiss industry’s three largest players — Rolex, Patek Philippe and Audemars Piguet — are all privately held. But analysts believe these brands have been able to sustain their growth and retain value on the secondhand market because of their premium positioning. Patek Philippe, for instance, has an average retail price of $76,764 across 98 different SKUs of watches, according to WatchCharts and Morgan Stanley data.

In the spectrum of luxury watches, “the higher you go up in the pyramid, the better,” said William Massena, a watch collector and founder of Massena LAB, a watch brand that often collaborates with other brands such as Albishorn and H. Moser & Cie. “These days, it’s easier to sell a $100,000 watch than a $1,000 watch.”

Brands under the $1,000 threshold, on the other hand, have largely struggled to retain their share of the market against smart watches, Massena said. The latest Apple watch costs about $400 on its own, or about $1,300 for a version with an Hermès-branded titanium case and knit band.

Ultra-expensive watches tend to feature innovative complications, which refer to functions beyond timekeeping such as a time recorder — known as a chronograph — multiple time zones, and phases of the moon. After its successful launch of a chronograph watch called the Tentagraph last year, Grand Seiko will continue to explore the complications segment, said Le Troadec.

These days, it’s easier to sell a $100,000 watch than a $1,000 watch.

With Cartier’s Baignoire as case in point, vintage models are another hot category. “People want the old models, the classics,” said Massena, as well as models that feature materials like lapis, onyx and malachite.

Brick-and-mortar retail in the burgeoning US market is also an opportunity for growth, especially for certified pre-owned sellers. “There’s going to be massive investment in real estate and that will stimulate demand,” said Rob Corder, editor-in-chief of the magazine WatchPro.

Already, retailers such as Watches of Switzerland and Bucherer, which was acquired by Rolex last year, have transformed the shopping experience in the US, he added. Bucherer launched its own certified pre-owned programme in 2019. With great clienteling, these retailers can cultivate customer loyalty and “get people to buy more than one luxury watch in their lifetime,” Corder said.

Finally, insiders agree that the biggest white space in the sector is women’s watches, a historically under-served segment. A survey published last month by Deloitte and nonprofit group Watch Femme found that 85 percent of female respondents said the watch industry doesn’t offer or market enough products they actually want to wear.

But the demand is certainly there. On The RealReal, which has a majority female customer base, watch units sales grew 13.5 percent year-over-year over Black Friday and Cyber Monday.

“People are constantly making their first watch purchases and that’s not getting picked up in the narrative,” Wallner said.