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ANALYSIS

Booming sales of luxury watches could be detrimental in the long term

Posted On June 19, 2022 CPP-LUXURY 0

Swiss luxury watchmakers are making more money and selling fewer watches as the industry shifts away from affordable timepieces, with the focus on specific watch models. For affordable brands, sales are falling. Sales of Swiss timepieces reached a new high in 2021, with their export value topping $21.5 billion. At the same time, industry figures show this record value came from selling half as many units last year as were sold a decade ago.

But targeting the uber rich could be detrimental on the long term. At Rolex, higher-priced models like the Daytona or Yacht Master sell out faster than more entry-level lines like the Datejust or Day-Date, signaling stronger demand for top-line pieces. At

Audemars Piguet, the focus has been on high end versions of the Royal Oak

At Patek Philippe, the Nautilus Ref 5711, which originally retailed for $30,000, but now easily commands six figures. Patek’s president Thierry Stern said “I have still no idea why suddenly, the success [of this watch] came so fast and went so high, but what I know is that I do not want to be a mono-product company. So this is why I stopped the 5711. We made enough of it.”

For all of the beauty and craftsmanship that goes into a $500 Swiss watch, those are generally competing with something that’s both more utilitarian and multifunctional, the Apple Watch.