Has the Rolex bubble finally burst? Perhaps it has
Discussion
simon800 said:
Yes surprising to me too! But apparently it's an industry in decline - number of watches sold way down, but masked by cost per unit increasing over time.
It's from the Morgan Stanley "state of the industry" annual report;
"After a steady decline in volume over the past 20 years, with exports reaching an all-time low of 13.8 million wristwatches in 2020, Swiss watch export volume continued to scrape the bottom. The industry exported only 15.8 million watches in 2022, representing an increase of just 49,000 units or 0.3% growth over 2021, whereas in 2000 Switzerland was still exporting 30 million watches per year. In other words, the number of Swiss watches exported has declined almost 50% over the last 23 years.
And the numbers conceal an even grimmer reality. Taking the MoonSwatch out of the equation, the drop in export volume would have been a decline of about 900,000 units compared to 2021. That’s based on our estimates of the MoonSwatch accounting for 950,000 units exported and 1,000,000 units sold globally in 2022.
The decline in volume is largely due to smartwatches, especially the Apple Watch, which have decimated the entry-level segment of Swiss watchmaking, excepting the tremendous success of the MoonSwatch."
Look, I've checked the prices of current watches from AP, VC, PP, Lange and then the lower tier (only talking mainstream, not independents) and am truly shocked at the pricing. Then I saw where Omega, Breitling and Tag are at and this really blew my mind. These are mass produced watches in Rolex's former price range. And don't get me started on Rolex's innovation... so I have no doubt current customer are paying hefty prices for rather average watches. And to get complications, you are paying stratospheric prices. It's from the Morgan Stanley "state of the industry" annual report;
"After a steady decline in volume over the past 20 years, with exports reaching an all-time low of 13.8 million wristwatches in 2020, Swiss watch export volume continued to scrape the bottom. The industry exported only 15.8 million watches in 2022, representing an increase of just 49,000 units or 0.3% growth over 2021, whereas in 2000 Switzerland was still exporting 30 million watches per year. In other words, the number of Swiss watches exported has declined almost 50% over the last 23 years.
And the numbers conceal an even grimmer reality. Taking the MoonSwatch out of the equation, the drop in export volume would have been a decline of about 900,000 units compared to 2021. That’s based on our estimates of the MoonSwatch accounting for 950,000 units exported and 1,000,000 units sold globally in 2022.
The decline in volume is largely due to smartwatches, especially the Apple Watch, which have decimated the entry-level segment of Swiss watchmaking, excepting the tremendous success of the MoonSwatch."
Edited by simon800 on Monday 3rd April 13:35
I only know one person who still buys luxury watches. Everyone else wear Apple Watch/ Garmin. And we all used to wear nice timepieces/ tool watches.
simon800 said:
The decline in volume is largely due to smartwatches, especially the Apple Watch, which have decimated the entry-level segment of Swiss watchmaking,
I guess if you were making a choice between a smart watch or a £500 mechanical watch, the smart watch would win. Watches of Switzerland reckon a 6% growth over the past 10 years.
Have to say it blew my mind to see IWC have priced their new Ingenieur (time only stainless steel sports watch) at £10 500.
That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
NDA said:
I guess if you were making a choice between a smart watch or a £500 mechanical watch, the smart watch would win.
Watches of Switzerland reckon a 6% growth over the past 10 years.
Or you could perhaps open your mind and believe expensive watches are out of fashion and won't be making a come back. Watches of Switzerland reckon a 6% growth over the past 10 years.
Everything has gone up dramatically over the last decade. The MS report speaks to this. And they should also cover service and accessories costs too. These have climbed to rip-off levels too.
Inventories are at an all time high. Stock is completely illiquid as they don't want to annihilate the industry completely - similar to the quartz crises - and the brand clearing strategies of yesteryear - you could buy Day Dates at 40% off not too long ago pre-owned and 25% off from ADs... maybe 30% off if you weren't a tool... which was easily achieved in my time.
The Apple Watch has done so much damage to the luxury watch industry. I can never strap-on another Lange or Laurent Ferrier. Out with the old and in with the new.
Edited by GilletteFan on Monday 3rd April 13:56
simon800 said:
Have to say it blew my mind to see IWC have priced their new Ingenieur (time only stainless steel sports watch) at £10 500.
That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
That's steep. That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
However, if one really sits down and thinks about it for a little longer... it's reasonable as you never actually own an IWC Ingenieur. You merely look after it for the next generation.
simon800 said:
Louis Balfour said:
Is that so. I am surprised.
I cannot help but think mechanical watches will at some point cease to be anything other than curios, though. But wearable tech will need to be self-charging.
Yes surprising to me too! But apparently it's an industry in decline - number of watches sold way down, but masked by cost per unit increasing over time.I cannot help but think mechanical watches will at some point cease to be anything other than curios, though. But wearable tech will need to be self-charging.
It's from the Morgan Stanley "state of the industry" annual report;
"After a steady decline in volume over the past 20 years, with exports reaching an all-time low of 13.8 million wristwatches in 2020, Swiss watch export volume continued to scrape the bottom. The industry exported only 15.8 million watches in 2022, representing an increase of just 49,000 units or 0.3% growth over 2021, whereas in 2000 Switzerland was still exporting 30 million watches per year. In other words, the number of Swiss watches exported has declined almost 50% over the last 23 years.
And the numbers conceal an even grimmer reality. Taking the MoonSwatch out of the equation, the drop in export volume would have been a decline of about 900,000 units compared to 2021. That’s based on our estimates of the MoonSwatch accounting for 950,000 units exported and 1,000,000 units sold globally in 2022.
The decline in volume is largely due to smartwatches, especially the Apple Watch, which have decimated the entry-level segment of Swiss watchmaking, excepting the tremendous success of the MoonSwatch."
Edited by simon800 on Monday 3rd April 13:35
GilletteFan said:
Or you could perhaps open your mind and believe expensive watches are out of fashion and won't be making a come back.
Everything has gone up dramatically over the last decade. The MS report speaks to this. And they should also cover service and accessories costs too. These have climbed to rip-off levels too.
Inventories are at an all time high. Stock is completely illiquid as they don't want to annihilate the industry completely - similar to the quartz crises - and the brand clearing strategies of yesteryear - you could buy Day Dates at 40% off not too long ago pre-owned and 25% off from ADs... maybe 30% off if you weren't a tool... which was easily achieved in my time.
The Apple Watch has done so much damage to the luxury watch industry. I can never strap-on another Lange or Laurent Ferrier. Out with the old and in with the new.
I don’t think they’re out of fashion as such. There will always be demand among the well off for luxury items such as watches. For most blokes they’re pretty much the only jewellery we wear and so for special occasions many have a nice watch. They’re definitely become less of a daily wear though because an Apple Watch is more useful. Apple Watches and the like are surely wiping out the similarly priced mechanical watch market rather than the “luxury” end?Everything has gone up dramatically over the last decade. The MS report speaks to this. And they should also cover service and accessories costs too. These have climbed to rip-off levels too.
Inventories are at an all time high. Stock is completely illiquid as they don't want to annihilate the industry completely - similar to the quartz crises - and the brand clearing strategies of yesteryear - you could buy Day Dates at 40% off not too long ago pre-owned and 25% off from ADs... maybe 30% off if you weren't a tool... which was easily achieved in my time.
The Apple Watch has done so much damage to the luxury watch industry. I can never strap-on another Lange or Laurent Ferrier. Out with the old and in with the new.
Edited by GilletteFan on Monday 3rd April 13:56
GilletteFan said:
simon800 said:
Have to say it blew my mind to see IWC have priced their new Ingenieur (time only stainless steel sports watch) at £10 500.
That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
That's steep. That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
However, if one really sits down and thinks about it for a little longer... it's reasonable as you never actually own an IWC Ingenieur. You merely look after it for the next generation.
GilletteFan said:
simon800 said:
Yes surprising to me too! But apparently it's an industry in decline - number of watches sold way down, but masked by cost per unit increasing over time.
It's from the Morgan Stanley "state of the industry" annual report;
"After a steady decline in volume over the past 20 years, with exports reaching an all-time low of 13.8 million wristwatches in 2020, Swiss watch export volume continued to scrape the bottom. The industry exported only 15.8 million watches in 2022, representing an increase of just 49,000 units or 0.3% growth over 2021, whereas in 2000 Switzerland was still exporting 30 million watches per year. In other words, the number of Swiss watches exported has declined almost 50% over the last 23 years.
And the numbers conceal an even grimmer reality. Taking the MoonSwatch out of the equation, the drop in export volume would have been a decline of about 900,000 units compared to 2021. That’s based on our estimates of the MoonSwatch accounting for 950,000 units exported and 1,000,000 units sold globally in 2022.
The decline in volume is largely due to smartwatches, especially the Apple Watch, which have decimated the entry-level segment of Swiss watchmaking, excepting the tremendous success of the MoonSwatch."
Look, I've checked the prices of current watches from AP, VC, PP, Lange and then the lower tier (only talking mainstream, not independents) and am truly shocked at the pricing. Then I saw where Omega, Breitling and Tag are at and this really blew my mind. These are mass produced watches in Rolex's former price range. And don't get me started on Rolex's innovation... so I have no doubt current customer are paying hefty prices for rather average watches. And to get complications, you are paying stratospheric prices. It's from the Morgan Stanley "state of the industry" annual report;
"After a steady decline in volume over the past 20 years, with exports reaching an all-time low of 13.8 million wristwatches in 2020, Swiss watch export volume continued to scrape the bottom. The industry exported only 15.8 million watches in 2022, representing an increase of just 49,000 units or 0.3% growth over 2021, whereas in 2000 Switzerland was still exporting 30 million watches per year. In other words, the number of Swiss watches exported has declined almost 50% over the last 23 years.
And the numbers conceal an even grimmer reality. Taking the MoonSwatch out of the equation, the drop in export volume would have been a decline of about 900,000 units compared to 2021. That’s based on our estimates of the MoonSwatch accounting for 950,000 units exported and 1,000,000 units sold globally in 2022.
The decline in volume is largely due to smartwatches, especially the Apple Watch, which have decimated the entry-level segment of Swiss watchmaking, excepting the tremendous success of the MoonSwatch."
Edited by simon800 on Monday 3rd April 13:35
I only know one person who still buys luxury watches. Everyone else wear Apple Watch/ Garmin. And we all used to wear nice timepieces/ tool watches.
I have bought some more watches, but they are "vintage" and not Rolexes.
I cannot see myself buying more modern watches any time soon, for the reasons mentioned above. In addition to which, watches have become too big. Patek used to make some lovely dress watches, but their current Calatrava is 39mm. That is Submariner territory and, in my opinion, too spready.
Personally, I don't think the watch market is going to recover to where it has been in the past five years and I think the luxury watch bubble HAS burst, or is deflating. Rolex is obviously included, and in fact it appears to be one of the first brands to be shedding value.
The conditions that allowed the market to flourish - cheap money and COVID being two factors - have passed. If the volume of watch sales has halved in the past twenty years it does not bode well for a vibrant market going forwards, either, especially when one considers the amount of stock that is in the market now.
Edited by Louis Balfour on Monday 3rd April 15:26
Louis Balfour said:
The conditions that allowed the market to flourish - cheap money and COVID being two factors - have passed. If the volume of watch sales has halved in the past twenty years it does not bode well for a vibrant market going forwards, either, especially when one considers the amount of stock that is now.
I agree with the former. The latter I am not so sure about, volume has fallen but the big hit is under 200 swiss francs.
Zoon said:
GilletteFan said:
simon800 said:
Have to say it blew my mind to see IWC have priced their new Ingenieur (time only stainless steel sports watch) at £10 500.
That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
That's steep. That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
However, if one really sits down and thinks about it for a little longer... it's reasonable as you never actually own an IWC Ingenieur. You merely look after it for the next generation.
Catastrophic Poo said:
Zoon said:
GilletteFan said:
simon800 said:
Have to say it blew my mind to see IWC have priced their new Ingenieur (time only stainless steel sports watch) at £10 500.
That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
That's steep. That's CRAZY money for a stainless IWC in my opinion.
It has the exact same movement as their £5700 Mark XX stainless steel watch. About the price I'd expect for something like that from IWC.
However, if one really sits down and thinks about it for a little longer... it's reasonable as you never actually own an IWC Ingenieur. You merely look after it for the next generation.
ks, in light of one the humblebrag posts just upthread... Although I've been wrong before. Around 1998, i think it was.
Carl_Manchester said:
If you believe the structural decline thing then start shorting Richemont shares. There's a whole basket of watch brands in there inc. Panerai and IWC.
Caution here. Management reprice up hard, so their financials improve. They have also shifted business models with tighter controls on arms length distribution. Inventory is piling up. Basic models are being flogged at exorbitant prices. Plenty of capital to support stock price via HFT. The watch market is pretty much dead in the water and the luxury companies are being propped up as the entire industry is in poor health.
Gassing Station | Watches | Top of Page | What's New | My Stuff