Preserving value over time: The art of Swiss watchmaking


Preserving value over time: The art of Swiss watchmaking

Vacheron Constantin, Audemars Piguet, and Patek Philippe are considered the holy trinity of watch brands that have always captured the attention of enthusiasts. However, these watches come with a hefty price tag that not everyone can afford.

In recent years, the prices of these luxury watches have seen a significant increase. The flagship models of these brands such as the Royal Oak, Nautilus, and Patrimony have more than tripled in price over the last five years.

The reasons for this market surge are complex and multi-faceted. Factors such as inflation, which drives investment in alternative assets, and increased demand from emerging markets, play an important role. However, it is important to note that supply remains limited, which contributes to the high prices.

This high demand and limited supply have created a thriving secondary market for these luxury watches. Second-hand retailers have a significant advantage as they can offer these luxury watches at a premium, often higher than the price of a new watch. Additionally, watch brands traditionally do not participate in the secondary market, unlike other industries such as Tesla and Apple.

Recently, Rolex made a major move in the market by launching its own secondary market at the end of 2022. This allows customers to have confidence in the authenticity and condition of the watch they are buying, but at a premium price. Experts estimate that the prices on this secondary market can be as much as 30% higher than market prices. A few years ago, Vacheron Constantin launched "Les Collectionneurs", an offer of perfectly restored antique timepieces presented at events held around the world.

Despite this, the market has experienced a correction since April 2022. Iconic models such as the Royal Oak have lost 25% of their value in recent months. This market correction may present an opportunity for buyers, as long as they seek advice and focus on iconic models that have proven their resilience over the years.

Overall, the market fundamentals, the imbalance between supply and demand, and the emergence of new platforms for accessing the market such as, point to a bright future for the luxury watch market in the coming years. However, it’s important to be cautious and informed when making investments in this market.

Learn more about Diversified