Not enough luxury watches to sell globally

Sales of luxury watches have skyrocketed during the pandemic as consumers spend money spent on travel and entertainment on luxury goods. After the pandemic, retailers benefited from online and in-person sales when stores were allowed to reopen. Watches of Switzerland’s annual sales increased 40% to $1.54 million. The company expects to bring in between $1.45 and $1.79 million by 2023.

However, the prices of some Swiss brands are starting to stabilize or decline slightly in the second-hand market after a period of sudden growth. Despite this trend, and the impact from the stock market and virtual currency is plunging, demand for Patek Philippe and Audemars Piguet continues to outstrip supply. “Demand for these brands is beyond imagination. We look forward to being able to import more products,” said the managing director of Watches of Switzerland.

When the supply of Rolex, Patek Philippe and Audemars Piguet failed to meet the shopping needs of customers, they turned to other brands. According to a report from Watches of Switzerland, customer demand for Cartier and Tudor increased, causing a new supply shortage problem. “We were unable to import the Santos Cartier watch model and some Tudor devices,” said Hugh Brian Duffy.

Creating each detail takes time and effort, resulting in the production process not producing enough watches to meet demand. This strict adherence to quality is why luxury watch collectors respect and desire to own the brand’s products. “Global demand has increased steadily over the past five years with supply remaining flat, and this creates upward pressure on prices,” said Paul Altieri, CEO of online watch retailer Bob’s Watches.

Over the past two years, the Rolex factory has had to close for a couple of months due to Covid-19, so there is at least some impact on supply.

Rolex wait lists are not an entirely new phenomenon and general interest in watches has been building for many years. “Watch collectors used to be a self-contained community of people very passionate about organizing private meetups and events,” says Joshua Ganjei, managing director of watch retailer European Watch Company in Boston. small. But with the proliferation of internet blogs, watch-only forums and Instagram, the hobby has really spread.”

Luxury watches have become a valued investment object around the world. According to a study by online watch selling platform Bob’s Watches, real estate or other investments were previously considered stable, but now 88% of respondents expect to maintain or increase their spending. luxury watches for the next 12 months.

In a rare statement from Rolex, the brand refuted the idea that they deliberately produced small quantities to increase the price of their products. “Scarcity of our product is not our strategy,” a Rolex representative told Yahoo Finance. “Our current production cannot fulfill existing demand comprehensively, at least without sacrificing the quality of our watches – which we always refuse to do.”

Rolex is special in that they manufacture almost every part of a watch, so if an sourced part or material is delayed or unavailable, the entire line will have to come to a halt. And even simple mechanical watches that tell the time contain more than a hundred small details. However, Rolex is continuing to expand capacity at four facilities in Switzerland “as much as possible, and always adhering to quality criteria”.

Over the past two years, the Rolex factory has had to close for a couple of months due to Covid-19, so there is at least some impact on supply. Rolex does not publicly disclose its production numbers, but in a normal year the company is estimated to produce around 1 million watches (though not all of them fall on its list of coveted models). ).

Meanwhile, the 2021 post of CNBC shows that Patek Philippe’s annual production is 60,000 pieces. Similar to Rolex, Patek Philippe explains that it is impossible to increase production while maintaining quality. Thierry Stern, Owner and President of the brand, says it takes 10 years to train a good watchmaker. That is, the craftsman must be proficient in making the complex parts of a Patek watch.

Earlier in February, Bloomberg reported that Audemars Piguet is expected to produce 50,000 units this year, up from 45,000 units sold in 2021. The training of skilled workers at Audemars Piguet also takes several years. Every watch manufacturing job can be very laborious and time consuming. From part production and decoration to finishing and mechanical testing, there are many meticulous tasks that must be performed.

Not a shortage of watches in general, rather, this phenomenon occurs only with the most famous and coveted models. For example with Rolex the sport steel watch or the “Professional” Rolex such as the Submariner, GMT Master II, Explorer and of course the Daytonas… When a popular version becomes hard to buy, people look for it. When it comes to alternatives they can afford, however, most still regret not being able to land their favorites.Exclusive steel watches like the Patek Philippe Nautilus are in a similar situation.

Source: Compilation