The Big Four Increase Their Worldwide Grip on Watches

[BNA/LION]

Interesting Read...

It has been clear for a while that among the many lots of of manufacturers that make up the posh watch trade, 4 — Rolex, Patek Philippe, Audemars Piguet and Richard Mille — are usually not just like the others.

The manufacturers are wanted by each established collectors and dabblers new to the sector. Their names are often known as sponsors of main sporting occasions, from the U.S. Open (Rolex) to Les Voiles de St. Barth (Richard Mille), and cultural sights, from the Montreux Jazz Pageant (Audemars Piguet) to the Singapore arts middle Esplanade (Patek Philippe). They’re name-checked in track lyrics, flashed on pink carpets and, every so often, stolen straight off individuals’s wrists.

However since 2017, and particularly over the previous 18 months, all 4 watchmakers have strengthened their dominance of the market, and the demand for — and worth of — their timepieces has continued to rise.

Why 2017? That’s when “the ascent began to occur,” stated Yoni Ben-Yehuda, head of watches at Materials Good, a New York-based retailer that carries Audemars Piguet. Demand started to outpace provide, as extra individuals entered the market, with social media enjoying an enormous position. Secondary costs for essentially the most sought-after fashions began to extend, at a price of about 15 % yr over yr, Mr. Ben-Yehuda stated.

And why within the final 18 months? The reply lies in a mixture of provide shortages brought on by the pandemic and cash poured into the worldwide financial system by federal banks, defined Aurel Bacs, the auctioneer whose Bacs and Russo consultancy runs the watch division at Phillips. “All of a sudden we discover ourselves with more cash and fewer watches to purchase. Consequently, costs go up.”

In late July in Monaco, as an example, the watch auctioneer Antiquorum bought a Ref. 5711 Inexperienced Dial Nautilus by Patek Philippe, nonetheless in its factory-sealed packaging, for 416,000 euros, or $492,000, a value that included the public sale home’s 25 % fee.

What made the outcome so noteworthy is that the mannequin had been launched in April with a retail value of $34,890.

“The watches from these manufacturers are common liquid property now,” stated Geoffrey Hess, a world watch specialist at Phillips, based mostly in New York. “After all, they’re all effectively made and recognizable. However there’s consolation for collectors in shopping for from these manufacturers as a result of patrons and sellers will worth their watches as a acknowledged foreign money.”

A significant distinction in regards to the so-called Massive 4: They’re privately owned, whereas most of their rivals belong to publicly held luxurious teams (equivalent to Compagnie Financière Richemont, which owns Cartier, and Swatch Group, which owns Omega).

“These 4 manufacturers don’t reply to shareholders, and none are pushed by fast income,” stated John Simonian, chief govt of Richard Mille within the Americas.

An instance of the Massive 4’s strategy could be Patek Philippe’s choice early this yr to cease producing the Nautilus Ref. 5711/1A-010, a stainless-steel timepiece with a black-blue dial — a watch that some potential patrons had been ready eight and even 10 years to acquire. And therein lies the No. 1 rationalization for the manufacturers’ excessive desirability, trade specialists say: Demand for his or her watches far outstrips provide — regardless of the 4 firms’ vastly completely different annual manufacturing figures.

Rolex doesn’t disclose its output. However in response to Morgan Stanley, which in March printed a report on the Swiss watch trade titled “King Rolex,” it makes about one million watches per yr — although in 2020, that quantity is assumed to have dipped to 810,000. (Even with that decline, the authors wrote, “We imagine that Rolex turned the most important participant in 2020 for the primary time in a long time, with an estimated market share of 26.8 %, versus 24.6 % in 2019,” when the Swatch Group held the lead spot.)

In 2020, the report stated, Patek Philippe made about 53,000 watches; Audemars Piguet, about 60,000; and Richard Mille, about 4,300. The numbers are definitely smaller than in a median yr, nonetheless, as most Swiss factories closed for about two months in spring 2020 because the coronavirus unfold in Europe.

By all accounts, the manufacturers’ retail shows all over the world at the moment are barren — significantly these as soon as stocked with essentially the most sought-after sport fashions, together with the Patek Phillipe Nautilus and Aquanaut, the Audemars Piguet Royal Oak and absolutely anything by Rolex and Richard Mille.

“Only a few months in the past, you would stroll right into a Rolex retailer and see some watches,” stated Dr. Iris Ko, an anesthesiologist in Southern California who has been amassing mechanical timepieces since 2008. “I simply walked right into a Richard Mille retailer, they usually’re bought out for months to a yr. You possibly can’t get any Royal Oaks — not accessible.”

For patrons keen to pay a hefty premium, the one choice is to buy the fashions by secondary channels — auctions, pre-owned websites or personal gross sales — the place the most well liked items are promoting for, at a minimal, 60 % greater than retail.

“The Rolex Daytona in black ceramic has gone up from $22,000 in January 2020 to commerce right this moment at $36,000, a couple of 66 % improve,” Justin Reis, co-founder and chief govt of WatchBox, a Philadelphia-based pre-owned watch supplier, stated on a telephone name in mid-August.

“The Audemars Piguet 15202, the Royal Oak with blue dial — that’s appreciated from $39,000 within the first quarter of 2020 to nearer to $70,000 right this moment, a 75 % improve,” he added. “And the Patek Aquanaut 5167 has appreciated from $34,000 to $55,000, a 60 % improve.”

Mr. Reis stated one purpose patrons had been perpetually driving costs larger on choose fashions was that, due to firms like WatchBox and its quite a few rivals, together with Watchfinder & Firm, Chrono24 and Crown & Caliber, shoppers lastly had entry to organized knowledge. This contains previous pricing for particular fashions, which has taken the guesswork out of the shopping for course of. And curiosity in high-value collectibles has soared through the pandemic, as individuals have seemed to exhausting property to diversify their portfolios.

“No person is aware of the place to place their cash anymore,” stated Maximilian Büsser, proprietor and artistic director of the boutique model MB&F. “If you happen to handle to get your fingers on a metal Nautilus, a Rolex Daytona, an RM 011 or a metal Royal Oak, the day you purchase it at retail, you’ll be able to resell it instantly, multiplying its worth by two and even three. A 100% to 200 % upside.

“What funding on the earth — until you’re a drug supplier — really offers you these returns?” Mr. Büsser added.

The ballooning values of sure fashions really has difficult enterprise for approved sellers, who say competitors amongst patrons is fierce.

“In my 34 years with Wempe, I’ve by no means seen something prefer it,” stated Ruediger Albers, the New York-based president of American Wempe Corp., a outstanding Rolex supplier.

Mr. Albers stated the New York retailer didn’t preserve a ready listing for fashions such because the chrome steel Rolex Daytona with a white dial, its most requested timepiece, as a result of that may suggest there was a chronological order to fulfilling requests. As a substitute, he stated, essentially the most sought-after items go to longtime purchasers who could be trusted to not flip them.

“The artwork is to search out the shoppers who will love the watches, not flip them into monetary property,” Mr. Albers stated.

Whereas the Massive 4 command the lion’s share of consideration amongst right this moment’s investment-minded patrons, a handful of impartial manufacturers, led by the modern watchmaker François-Paul Journe, have skilled related spikes in demand for the reason that early days of the pandemic.

“All of the individuals who ask me for Journe within the final 12 months don’t even know his identify,” Mr. Büsser stated. “However they’ve heard in the event you purchase a Journe, you can also make cash.”

Paul Boutros, head of watches for Phillips within the Americas, stated curiosity in F.P. Journe soared in June 2020, when two of the watchmaker’s early fashions, the Tourbillon Souverain and Résonance, bought at a Phillips Geneva sale for a mixed value of greater than $2.5 million.

“Since then, it gave individuals extra confidence to pay greater than they needed to pay for early Journe watches,” Mr. Boutros stated. “And since the older items are so wanted and costly, it makes the newer items at retail appear to be such nice worth, and drives demand there.”

But the query stays: Is that this all a bubble? It depends upon whom you ask.

William Rohr, an trade veteran and the New York-based founding father of Massena LAB, which collaborates with watchmakers on limited-edition timepieces, thinks it could be.

“It’s weird to a man like me, who’s been round 30 years,” Mr. Rohr stated. “To a brand new man who was unaware of a Journe or a Patek till just lately, perhaps it’s the brand new regular?”

“However I don’t suppose it’s sustainable,” he stated. “Proper now, it’s a vendor’s market, and the vendor is deciding who they wish to promote a watch to. For a purchaser it may be irritating. However wait, issues are going to vary.”


https://www.nytimes.com/2021/09/08/f...ppe-mille.html

[Cwillis0001]

First time I've ever even hear the term "Big Four" when referring to these brands.

[vh2k]

Originally Posted by Cwillis0001

First time I've ever even hear the term "Big Four" when referring to these brands.

[myporsche]

Originally Posted by vh2k

The TRUE big 4

[Cwillis0001]

Originally Posted by myporsche

The TRUE big 4

I wish I had Hetfield's right hand, Mustaine's left hand, King's tattoos, and Ian's goatee. I'd be a GOD.

[Cwillis0001]

Originally Posted by vh2k

Yesssss!!!

[myporsche]

Originally Posted by Cwillis0001

First time I've ever even hear the term "Big Four" when referring to these brands.

I was cringing as I remembered the consulting days (Big4 accounting).

[vh2k]

Thanks for sharing. BTW, looks like quite a bit of editing has occurred from what you posted above. I see quotes have been updated/revised. Maybe NYT accidentally posted an early draft?

For example, The Wempe quote has been noticeably revised.


“In my 34 years with Wempe, I’ve never seen anything like it,” said Ruediger Albers, the New York-based president of American Wempe Corp., a prominent Rolex dealer.

Mr. Albers said the New York store did not maintain a waiting list for models such as the stainless steel Rolex Daytona with a white dial, its most requested timepiece, because that would imply there was a chronological order to fulfilling requests. Instead, he said, the most sought-after pieces go to longtime clients who can be trusted not to flip them.

“The art is to find the customers who will love the watches, not turn them into financial assets,” Mr. Albers said.



Met with Rudy last week... and this is why he runs the gold standard of Rolex ADs! (He sounds a lot like me!) ;)

[JacksonRain]

Thanks for sharing...big Four...sounds right

Sent from my SM-G988U using Tapatalk

[Vipes]

Interesting read. Thanks.

[enjoythemusic]

So it's a good time to be Richemont and the Swatch Group too.

[DavB]

Helpful thread, thank you sharing OP.

[rod727]

On an unrelated note I wonder what % of the overall global watch market the big 4 luxury brands occupies?

[vh2k]

Originally Posted by rod727

On an unrelated note I wonder what % of the overall global watch market the big 4 luxury brands occupies?

By value....

Rolex = 25%
PP = 5.8%
AP = 4.3%
RM = 2.5%

BTW, Omega, Cartier, and Longines have bigger market share value than PP, AP, and RM.

[macrowatch]

My take away is NYT could not stand to be shown up by Yahoo Finance, especially when Rolex took the time to issue an official communication response.

I also like how the NYT used better sources than Yahoo!

[vh2k]

Originally Posted by macrowatch

My take away is NYT could not stand to be shown up by Yahoo Finance, especially when Rolex took the time to issue an official communication response.

I also like how the NYT used better sources than Yahoo!

Spot on observation!

[TimepieceRPP]

Thanks for sharing, very interesting to read.

[thefollandgnat]

Another Big Four, with a useful watch tie-in

Roger, Rolex
Rafa, RM
Nole, Seiko
Andy, Rado

You're probably going to say that Andy's the odd man out here, but it's actually Nole.

[HMHM]

Originally Posted by thefollandgnat

Another Big Four, with a useful watch tie-in

Roger, Rolex
Rafa, RM
Nole, Seiko
Andy, Rado

You're probably going to say that Andy's the odd man out here, but it's actually Nole.

Novak is now under Hublot…. Think he might have done better with AP…