Is the Luxury Watch Market on the Rebound?

The Resurgence of Luxury Watches: A Market on the Mend

Luxury watch enthusiasts are cautiously optimistic as they sense a potential turning point in a market that has faced two challenging years marked by plunging prices and dwindling demand. While hard evidence of a full recovery remains elusive, there are signs that the tides may be shifting.

A Glimmer of Hope

The Bloomberg Subdial Watch Index, which tracks the secondhand prices of the 50 most sought-after watch models, has recently shown a modest uptick of about 1 percent from the multi-year lows recorded in early October. This slight increase, though minimal, is a welcome change for collectors who have weathered a storm of declining values. Some brands, such as Japan’s Seiko Group and Watches of Switzerland, have reported growth in sales during their latest quarters, contrasting sharply with the disappointing figures from industry giants like LVMH, Richemont, and Swatch Group, which have all reported sluggish sales.

For many collectors, this mixed bag of news is a silver lining. The luxury watch market has undergone a classic boom-and-bust cycle since the pandemic, with a surge of newcomers eager to flip high-demand models like the Patek Philippe Nautilus 5711/1A and Rolex Daytona. However, the resale bubble burst in 2022, exacerbated by an oversupply from Swiss watchmakers and a significant economic slowdown in China.

Shifting Consumer Preferences

Despite the current uncertainty, some industry observers believe that luxury watches may soon regain their allure. As consumers grow weary of skyrocketing prices for handbags and other “soft” luxury goods, there is a renewed interest in traditional timepieces. Watch analyst Oliver Müller has even predicted that Rolex could soon surpass Apple as the world’s largest watchmaker in terms of sales.

Brynn Wallner, founder of Dimepiece, a media platform focused on women and watches, notes, “There’s something about watches that feels more permanent than other luxury items.” She reports a growing number of friends reaching out to her, eager to invest in their first significant timepiece.

Market Dynamics and Consumer Behavior

The watch industry is also showing signs of discipline. According to the Federation of the Swiss Watch Industry, exports fell by 2.7 percent in the first nine months of 2024 compared to the previous year. This restraint may be crucial in stabilizing the market.

However, it may still be premature to declare a full recovery. Tim Stracke, founder of the resale platform Chrono24, observes a shift in collector behavior, noting that people are more willing to make purchases than they were a year ago. Yet, Charles Tian, founder of WatchCharts, cautions that watches are lingering on the market longer before selling, indicating a buyer’s market that may not stabilize in the immediate future.

The Evolution of the Luxury Watch Market

One of the most significant changes in the luxury watch sector is the ongoing effort to attract underserved demographics, particularly women. Brands like Grand Seiko are expanding their offerings in the $10,000 to $15,000 range and are focusing on smaller styles that appeal to female consumers. The brand has also made strides in the complications segment, following the successful launch of its Tentagraph chronograph.

As the world becomes increasingly tech-driven, the appeal of mechanical watches remains strong. Tian emphasizes that luxury watches represent craftsmanship, art, and heritage, standing in stark contrast to the disposable nature of modern electronics. This intrinsic value may be driving renewed interest in traditional timepieces.

Cultural Integration and Fashion Trends

Watches are increasingly becoming a focal point in mainstream fashion and culture. Celebrities like Tyler, the Creator are showcasing their vintage watch collections alongside luxury cars and designer goods, broadening the perception of how watches can be integrated into personal style. This cultural shift has prompted brands to rethink their marketing strategies, with some, like Cartier, reintroducing vintage models that have gained a cult following.

The Luxury Pyramid: A Tale of Two Markets

Within the luxury watch market, a clear divide is emerging. The top-tier brands—Rolex, Patek Philippe, and Audemars Piguet—continue to thrive, largely due to their premium positioning and the sustained demand for their products. In contrast, brands priced under $1,000 are struggling to compete against smartwatches, which offer advanced technology at a lower price point.

William Massena, a watch collector and founder of Massena LAB, notes that it is now easier to sell a $100,000 watch than a $1,000 one. This trend underscores the growing preference for high-value timepieces that offer unique features and craftsmanship.

The Untapped Potential of Women’s Watches

The luxury watch market has historically overlooked female consumers, but recent surveys indicate a significant demand for products tailored to women. A study by Deloitte and Watch Femme revealed that 85 percent of female respondents feel the industry does not adequately cater to their preferences. Retailers like The RealReal and Fashionphile are already seeing increased sales in women’s watches, suggesting a burgeoning market that remains largely untapped.

Conclusion: A Cautious Optimism

As the luxury watch market navigates its recovery, the signs of renewed interest and evolving consumer preferences are encouraging. While the path to stabilization may be fraught with challenges, the industry’s ability to adapt and innovate will be crucial in shaping its future. With a growing focus on inclusivity and a deeper integration into fashion and culture, the luxury watch sector may very well be on the brink of a renaissance.