Mini rant…
When I started getting interested in watches almost a decade ago luxury watches were aspirational but importantly attainable. With all the price hikes the watches are shifting to aspirational and not attainable for many.
I find the rate of price increase odd. Surely sales will be impacted? Instead of competition keeping products at attainable prices the opposite is happening in the hope they become more ‘luxurious’. I understand the world of luxury goods is different but even as a once in a lifetime purchase for many they are being priced out…. Surely. On top of this they are coming down hard on discounts offered. Again to retain value in watches.
Other brands like Oris and Christopher ward are moving into the gaps but for many they won’t hold the same cache.
It will be interesting to see sales figures over the next two years.
There are sales figures and profit margins.Originally Posted by Stuno1
If your margins are the same or better but your goods are still selling and becoming more desirable without increasing costs by increasing units made, then that is the holy grail of manufacturing.
I might as well pull the plaster off and mention Veblen Goods in the first reply.
Undoubtably sales are impacted, but brands would prefer to sell one watch for £10,000 than ten watches for £1,000.
With modern production methods I'm certain it costs Rolex/Omega less manufacture a Submariner/Seamaster now than it did 30 years ago yet prices have increased 10 fold, which means profit margin has increased significantly. So selling fewer, at higher margin makes perfect sense. And as much as we don't like it – they're now a superfluous luxury item, whereas 30+ years ago more of a necessity.
It bothers me that medicines, car parts, homes, food and energy are increasing in price. Watches less so.
I've been interested in watches since the 1980s and started to pay attention to the higher end (Omega, Breitling, Rolex) segment from the late 1990s onwards. There was a noticeable price shift in 2009/2010. I think this came off the back of the recession, fuelled by the emerging Asian market and gave rise to brand 'boutiques', more in-house movements to justify huge RRP increases etc. Between that time and about 2018, I think social media and the flaunting of weath on instagram really helped the likes of Rolex. Then from 2018 onwards, we saw the demand increase and supply decrease only made worse by the pandemic. This lead to a big shift from watches being purchases to being investments and trackable assets. The landscape has changed dramatically. I don't think we will be going back any time soon either as it's not in the brands interest and there has been a whole industry that has developed out of it.
I honestly don't think future sales figures will force any reduction in RRP price. Price increases are a one-way street. I can't see Omega or Rolex reversing a price increase - that would be like saying "we aren't worth it". I also don't think we'll see a reversal of secondhand Rolex prices...the supply problem controlled by Rolex will see to that. And I also doubt there will be enough recession panic sellers to flood the market.
I'm well out of the Rolex/Omega game now. Whereas in my 20s/early 30s, I used to think showing some wealth was a good thing, I think it's actually pretty stupid to potentially sacrifice other stuff (like investing in learning a skill or doing something) over owning an object like a watch so my money goes into other things now. Granted...if you can make it work as an investment or you have lots of money thats another thing, but I don't have the spare money to burn or invest. I'm happy in the knowledge that through the period 2004-2019, at one time or another I owned pretty much every sports Rolex model going...and ended up flipping them all, so I know they don't give me enough pleasure to justify spending £10k on one nowadays!
Last edited by Christian; 1st February 2023 at 12:17.
Prices won't stop rising, it's critical to the perception on what makes these brands special. Quality is subjective and party of that is the reassurance that is expensive so it must be good.
I do think the rate of rise has changed the demographic though. People spending "2 months wages" on a watch etc will be dropping down the brand hierarchy.
I agree, after several years of stability from mid- 90s to mid noughties prices started to rise. Over the past 12 years watches have become far less affordable and its difficult for many people to justify spending on an item that simply tells the time. Paradoxically, as conventional watch wearing has declined the prices have continued to climb. In the past it was always possible to buy from grey dealers at a discount too, which made watches more affordable, but that’s all changed.
Best value is to buy vintage, some really nice watches can be had for a few hundred pounds. Factor in a couple of hundred to get the watch sorted out properly and you can own something old and interesting, you can even own a few of them and build a collection! Forget about the new stuff.
I totally agree with you. I find an older watch far more interesting, let’s face lots of brands are reintroducing old models with slight tweaks so why not have the originals
No doubt those companies will be (should be!) manufacturing more efficiently than 10 years ago, but doubt their production costs have gone down.
They've had 10 years of Swiss wage inflation, increases in steel costs, subcontracter costs, energy costs, audit fees, regulations, shipping costs, taxes - you name it, the cost has been going up. If they're lucky they can offset a part of that by more efficient manufacturing, but typically manufacturing gains are 1 or 2% per year, whereas inflation has been much higher.
No doubt there's a large veblen goods / market positioning aspect to this, probably the majority, but cost increases will be a factor. Cost indexes around the world (PPI) suggest that those cost price increases may now have peaked and begun to come down, so hopefully less of a factor looking ahead.
A lot of the increase was due to the rise of the Swiss Franc, which became a 'safe haven' currency after the financial crisis and roughly doubled in value, taking watch prices with it. Just look at the graph below, and you can see when it happened. Perhaps to the surprise of the Swiss watch brands, this only made people want them more. I believe this is when the game changed, as in a globalised market there were enough high net worth individuals that you could simply target the 1% and forget the rest. Luxury brands found they could sell more than enough watches at the new, higher price. Many who previously aspired to buy something special for a significant milestone were priced out, and had to rethink which brands they could wear. Perhaps Sir would like a Tudor instead of a Rolex.
That said, brands like Rolex and Omega still price their watches so that someone with a well paid job can save up for one with just the right amount of pain, it's not necessary to own a yacht with a helicopter on it to buy a Datejust. However things do seem to have been creeping up to the next level lately, just as the UK economy goes in the opposite direction. This may affect sales here, but I doubt it will make much difference to the big brands who are selling globally to stronger economies than ours. You may wonder how GS will fare in this environment, but they only need to find 500 people in the world who will pay £12,450 for their new SBGW295 'Urushi' 1960 Re-creation, and the limited edition will help to sell them. It is slightly painful though for those of use who think £3k might be a good price for a variation on that theme.
It definitely feels tougher to trade interesting pieces with others, as well. Seems like more people are becoming increasingly focused on Rolexes, etc as they are easier to move along - leaving the pool of broader watch nerds a bit more diluted. Maybe it's just me.
Many people were priced out long ago and the brands have always found people to take their place evidently.
Good point, hadn't realised about that.
It definitely feels tougher to trade interesting pieces with others, as well. Seems like more people are becoming increasingly focused on Rolexes, etc as they are easier to move along - leaving the pool of broader watch nerds a bit more diluted. Maybe it's just me.
Agree with this. The focus out there seems to really be on Rolex and I think the Moonwatch...Omega haven't really managed to create the same situation as Rolex across all their range, I suspect because like-for-like, they can't compete...whereas the Moonwatch is unique to Omega.
It’s interesting to see how age influences people’s reaction to the steady, on-going, increase of watch prices. I and the other older guys in my office who have an interest in watches have given up on collecting more expensive brands, especially Rolex. Much as the idea of a new model may appeal, and it does less so and less of late, I can no longer justify the cost or go through the hassle.
The younger guys seem quite happy to spend £9,000/£10,000 + on a pre-owned Rolex and accept the price level and the fact that they are not new.
If you only look at the luxury end of the market, then the prices seemingly bear no relationship to the cost of manufacture, but look at the other end of the market and there are watches with sapphire crystal, 316 stainless steel, quality Japanese movements and 200m WR available for under £100.
Even the Swiss have excellent watches available well under £1000, but there are a lot of people in this image conscious, influencer driven era who will spend big to have the 'right' brand on their wrist, back or driveway.
M
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Breitling Cosmonaute 809 - What's not to like?
Agree with this. I think getting older changed my mind on what I spend money on.
As much as I concur with what has been said above, and also moan at the constant price rise - in a way I do think it's good that the continual price rise of the known high rolling brands creates a bit of a vacuum below them.
I happen to think that 2-4k range has a great range of lovely watches, many of which I would never have considered before and now I have. As these gradually increase in RRP then another crop of mid range watches will take their place I'm sure - otherwise the watch industry will die out.
In terms of my personal frustration: I hate the fact that my most favourite brand (Omega) has jumped on the price rising bandwagon in the hope of getting additional perceived exclusivity through becoming more unaffordable. I expect it of Rolex, never expected it of Omega.
I blame that Stella Artois strap line ''reassuringly expensive''....Rolex/ Omega saw that young blokes were willing to mug themselves off for a pint of old wife beater when there are demonstrably better drinks at cheaper prices and Rolex especially never miss a trick/ geniuses at reading/ leading punters psyche.
Chuck in the force multiplier of social media, influencers, everyone's gotta APPEAR to be someone successful, and Bob's your uncle.
Last edited by Passenger; 1st February 2023 at 15:19.
The social media / instagram aspect is something I don’t get, don’t understand it. I’ve talked to folks who claim it is a significant aspect of younger people’s lives and the kudos of bragging on social media is a real driver to own stuff like expensive watches. Not something I can relate to, apart from TZ I don’t do social media, but it seems to be accepted that it has an influence.
Personally I don’t care what others have or don’t have, it doesn’t fuel aspiration in me, but perhaps that’s a consequence of getting older. Can’t say I find many of the latest watch offerings appealing, most are too big for my taste.
As for the Omega/moon connection, can’t believe they’re still milking it to death, it happened over 50 years ago! I see the appeal of the original design because it was smaller and (for me) a far better size than the 42mm Moonwatch, just forget all the mooncrap and relaunch it at a sensible price!
Imagine for a moment you are not you W, not this urbane, enigmatic, successful former chemist now part time horologist, imagine instead you're still a young buck striving to make it happen, then imagine your phone is an intrinsic part of your life, 24/7 apart from sleep it's with you and always on, now imagine all your mates and even people you don't really know except vaguely, plus probably some people you may not know at all are all busily telling each other what they're about, up to, thinking, doing, where they're going, what they're eating, what they've just purchased, all competing for that little shot of dopamine from getting a like or equivalent...sounds like hell, no? Part panopticon, part marketer/ advertisers dream.
I'm so far out of the circle of new watches that all the prices seem exorbitant to me.
Doesn't seem that long ago that Subs were £1500 used!
I did fill my boots then and recently sold off all my Rolexes for frankly huge profits so they have been a great investment. Wouldn't buy a new one though, can't see the value.
Have to make do with crappy old Omegas now.
Cheers,
Neil.
i just looked at the latest price for an omega dark side of the moon,
it has gone beyond a joke
Yeah, I almost get it if I try hard enough, in the same way I could grasp quantum mechanics but never truly understand it. However, I`ll never properly relate to it. All seems a bit sad to me, almost as if virtual has become greater than reality itself.Imagine for a moment you are not you W, not this urbane, enigmatic, successful former chemist now part time horologist, imagine instead you're still a young buck striving to make it happen, then imagine your phone is an intrinsic part of your life, 24/7 apart from sleep it's with you and always on, now imagine all your mates and even people you don't really know except vaguely, plus probably some people you may not know at all are all busily telling each other what they're about, up to, thinking, doing, where they're going, what they're eating, what they've just purchased, all competing for that little shot of dopamine from getting a like or equivalent...sounds like hell, no? Part panopticon, part marketer/ advertisers dream.
My son has just spent £300 on some secondhand trainers. I’m sure they are no better than my new £60 ones, but logic doesn’t really come in to it. Same with watches, except I can wear my watch for 10 years and it’ll be worth something. I don’t think those trainers will last a year.
Agree with all the comments. It’s just frustrating that even 5k now won’t get you an omega AT or a datejust, or MKXX etc.
These are the brands I have grown up desiring. It just means purchases will become less and less frequent.
Hopefully not from SC
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Yeah I have bought some cr@p watches when p1ssed as well…
But now you can take a step back and look dispassionately at the Omega/Rolex/IWC and see them for what they really are. Nice watches for sure, but ultimately mass produced steel watches which are in reality little better than other watches costing under 10% of the RRP, let alone market values.
Both my GMT and Explorer II were expensive at £3.5k each, they’re certainly not materially worth their current values.
My Seiko SPB143 is every bit as good and cost me £600.
I made the same observation and have decided to dive into the near-vintage market. For example if you look at the 2000-2010 Omega market you can find many amazing pieces at halve of what their new watch equivalent would cost.
Despite the technological advancement I still have a strong preference for the design langauge of watches in the 2000s.
I will be picking up a watch for my 40th birthday this year or next year then stepping back a bit from buying.
- - - Updated - - -
True and I may start playing around in that arena too.
I wonder if the same people complaining about the rise of the Swiss watch prices over the last 20 years are also complaining about their house values growing by the same factor!
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It's nothing other than market forces. Lots and lots of people want these goodies so the price goes up and it has always been thus. If you want some for yourself you just have to stump up and give the seller the market price. He/she is entitled to the market value after all.
If lots and lots of people lose interest the price will crash and those who are unhappy with todays price can dive in and buy to their hearts content.
Watches are no different from other goodies so we just have to live with it.
Hamilton Khaki Field auto on a bracelet, £550 yesterday, £700 today!
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Never mind watches. Have you seen the price of cars!
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That's because all they've known is upward prices so they think that will continue forevermore...which of course it won't.
Plus there are a whole host of other interesting brands filling the void left behind - that's where I think there's some real value for the collector.
The rate of rise may not continue but the RRP won’t come down that’s for sure.
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He will wear them for a year then sell them for a profit.
I quite fancied a Rolex for a big birthday last year but couldn’t justify the faff with the AD or the list prices. Ended up getting a Tudor Black Bay Pro and I’m very pleased with it and felt like reasonable value when compared to similar watches from the big brands. I agree that Omega from early 2000s look like decent value at the moment and there are some cracking smaller independent brands that also offer some value comparatively.
The way he’s looking after them I wouldn’t be surprised.
A loaf of bread averaged 52p at the break of the millennium. Now it's 139p, that's a 270% increase over 23 years, or a tad over 10% a year on the price in the year 2000 (not compounding of course).
Are watches really all that much different?
https://www.ons.gov.uk/economy/infla...ries/czoh/mm23
So should we be buying Jaeger-LeCoultre or Blancpain for example - instead? At least grey deals offer decent discount off MRP for these brands - which are arguably above tier of Omega/Rolex.
(Don't get me started on the price of mars bars and size reduction over time...)
This is bordering on BP territory - but here goes: only goes to 2013 but gives you an idea
Last edited by MartynJC (UK); 2nd February 2023 at 00:03.
“ Ford... you're turning into a penguin. Stop it.” HHGTTG
My thoughts exactly. As we have seen, luxury brands would rather destroy their own stock than devalue the brand by selling it for a price the market will currently support. Not publicly anyway, the most you can hope for is some discrete discounting at ADs, grey prices below RRP on less desirable models, and used bargains due to rapid depreciation. But luxury brands are playing the long game, officially lowering the price of any model would be suicide, and destroy the illusion of desirability and value. They are more likely to introduce entirely different models at a lower price point, or in the case of Rolex an entire diffusion brand. Otherwise they will reduce production, sit tight and wait for the good times to return in the next boom. I do wonder what they would do if CHF ever came back to earth, in theory prices should fall but I have a feeling they'd just take the extra profit.
I don't know how they calculate this data. £1.39 is the price of the most expensive "The Best" seeded loaf in my Sainsbury's Local. A normal white/wholemeal loaf of bread in a bigger supermarket is currently 79p.
Meanwhile, I'm happily paying 1970s prices...I only use bread for toast and buy the reduced ones for 10p to put in the freezer.
I've had a keen interest in higher-end watches since the mid-90s. All I've seen is upward prices and that's 27 years. Extending that, I'd say anyone who bought a sports Rolex in the 1960s would have done very well over a 60 year period...that's a generational timespan.
I agree it won't continue forever, but they aren't going to lose out if, for example, it continues for another 10 or 20 years. I think it's human nature to assume things change more rapidly than they do. You look into the future thinking that a decade is a long time and tastes will rapidly change, when in fact not much changes...there was as much Rolex/Omega talk back in 2013 as there is now, and I reckon we will still be talking about them in 2033.
https://www.hodinkee.com/articles/sw...FxP3q4l305ycYU
Last edited by Christian; 2nd February 2023 at 11:40.
There are plenty of affordable nice / interesting watches.
It's only the mainstream luxury "investment" brands that are accelerating their pricing ... stay away from them and you have plenty of great options. Vintage, microbrands, homages etc ...
But of course we all want the brands ... the marketing department certainly earn their salaries ...
Not just marketing I think, it's human nature. For a significant milestone, many want something that says for example, yes it sucks to turn 50 but now I get to have one of these. We need watches to answer this need, at various increasingly painful price points. Medals awarded to ourselves, for succeeding or just surviving.
Personally I'm tempted to get the appealingly affordable Vulcain Skindiver Nautique in protest at current prices, but it wouldn't hit the spot if you were celebrating winning an Oscar. For that you need to be taken outside of your comfort zone, where the watch embodies a significant effort and new possibilities.
I'm not suggesting for a moment that watches should always work that way, mostly I'm happier buying something beautiful and vintage that I found for a great price and feeling good about that instead, but the luxury milestone watch has its place. The galling part of price escalation is that you may find you're no longer eligible for medal you thought you'd earned.
It's tempting to speculate and snap up a handful of black bay/speedie/seamaster, and shove in the safe and forget about them until retirement.
... but that need has been created by years carefully crafted marketing messages ... we are all suckered by it ... and those who claim they are not are usually the most suckered because they don't realise / accept the situation.
If you were buying a watch on utility and appearance alone you'd never spend ££££ on one of the luxury brands.
I own Rolex, IWC, Omega, Tudor, Zenith ... I have over paid for my watches ...
I can’t keep up with the increases on omega and I’m a fanboy of the brand owner of 6 , I just can’t get my head around why the increases apart from greed, and I don’t get the demand is high increase the price mentality it’s like they want to stop people buying the watches, jeees how much can we charge before people stop buying
Like other things e.g. concert tickets the mantra is what won't they pay? then sell for just under.
I suspect we are getting close to finding out ... but then again maybe not ... prices now are high but there seems to be a small % of people untouched by the current economic situation ...
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