"Watches have demonstrated that they are quite resilient." "Even if some watches lost 30- 40% of their peak value, they are still at a very high valuation: three, four times the normal retail price," he said. Instead, when the crypto buyers vanished the waiting lists just got shorter, said Müller. If Swiss watchmakers had been able to ramp up production to meet the booming new crypto-fueled demand the market would have been flooded with luxury watches with no buyers when that demand suddenly vanished. The same thing that had held the watch industry back from expanding to meet the explosive new demand probably saved it. It arrived! And the Swiss watch industry could take full advantage.Īnd then crypto crashed, the markets crashed and the demand for luxury watches cratered overnight.īut here's where things get truly interesting. A demand increase like this will come along once a century, if you're lucky. Its product was suddenly wildly popular and highly valued, but watchmakers were also leaving billions of dollars on the table.Ī lot of the money that could have been going to Swiss watch companies was going to speculators and middlemen. Stacey Vanek Smith Cyril Fallet is part of the quality control team at MB&F.įor the Swiss watch industry, this was a bittersweet moment. They were a cultural force and a lucrative investment. Luxury watches were no longer a niche product for ultra rich collectors. It retailed for around $50,000 and sold at auction shortly after its release for $6.5 million. One of the most striking examples of this was a watch that Patek Philippe made in collaboration with Tiffany. Speculators were snapping up watches as fast as they could and reselling them for mind-blowing mark-ups. "They revert to a secondary market where they think they might buy, easily and quickly, the watch of their dreams and.the price goes up and up."Īn industry of watch-flippers was born. When a lot of people want to spend a lot of money, you can bet the market finds a way to oblige. "Rich people, if you tell them they can't get something, they're ready to pay any price to get it," said Müller. But in the case of luxury watches, the waiting lists drove them into a frenzy. Waiting lists like that will often discourage would-be buyers. "We had waiting lists of 5, 6, 7, 12 years," said Müller. as in The Holy Grail) sold out many times over. A lot of the most desirable, classic watches (known as "Grail watches". This seemed tragic: the luxury watch industry had this amazing growth opportunity but couldn't grab it because the very thing that made the watches valuable also made them difficult to mass produce.Įven the big players like Rolex and Patek Phillippe started selling out of everything. The little artisanal industry was overwhelmed and couldn't meet the moment. Stacey Vanek Smith Jennifer Longuepez is part of the quality control team at MB&F, it is her job to check each component of a watch before it is assembled.ĭemand for luxury watches was skyrocketing during the pandemic, but supply couldn't rise to meet it. Each part is meticulously checked for quality by a special team before it goes to the watchmaker to be assembled by hand. Each watch has hundreds of parts, many sourced from different, independent makers. Here's the thing about luxury watchmaking: It's slow. This is any industry's dream: an influx of young, wealthy customers sparking a global craze for your product.ĭemand took off. "I can tell you, never ever in the 25 years I have been in the watch industry, we have never experienced experienced such strong growth," said Müller. "They started to buy watches and that's when the market really took off," explained Oliver Müller, an analyst with LuxeConsult, who advises banks and collectors on luxury watches. But in the early part of the pandemic, even as millions of people were losing their jobs, another group was coming into enormous wealth: cryptocurrency investors. Even as COVID was shutting the world down, the luxury watch industry was having a renaissance.įor decades, luxury watches had been a shrinking market mostly catering to older, wealthy collectors. "It's like, the world was collapsing and are we going to launch a crazy watch called the Bulldog that costs $100,000? Right now? Is this good timing?"Īs it turns out, they couldn't have timed it better. "We debated endlessly whether we should launch it or not," said Yadigaroglou. Just as they were getting ready to release the watch, lockdown started shutting cities down all across the world. He says the Bulldog had been in development for years, and had long been set to launch in March 2020. MB&F The Bulldog mechanical watch from MB&F retails for $100,000 and has tiny jaws that open and close.Ĭharris Yadigaroglou is head of marketing at MB&F.
0 Comments
Leave a Reply. |
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |