Patek Philippe

ThomasM
[PuristS]
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The current situation is fairly clear to me...

Hi, Aussie,

I concur with Amanico's comments, both about needing more perspective from you to anchor the discussion, but also the reminder about the preferred "direction" of the discussions on this forum.

That said, I feel the basic topic of your original post is significant and relevant, made more so because of the fear and distortions of the current conditions.

As few observations and "facts" as someone who is in fairly regular touch globally with both "the man on the street;" the "serious collector" (which seems to be a different demographic than the previous); and the brands and their executives (both regional and HQ)

In brief -

Yes, there is no question there is a global slow down, down cycle, whatever you want to call it.

But all is not doom and gloom.  If one takes a more sophisticated view of the high end watch market, one quickly sees that the "lumped together" statistics usually proferred to the layman (and often offered by laymen "experts") is grossly misleading.

The "casual" market sector - those who either were aspirational and really were stretching to buy a true luxury or high horology piece (by brand, or by model) - is now nearly dead. Does tthis surprise anyone?

As is the "speculator" market - those who buy with the principle motivation to flip in a relatively short period of time. (contrast this to the "investor" who plans to "buy and hold" - difference is the event horizon and timeline)

The "serious" market sector - those who are in true love with the item and product category, and are buying to satisfy a consumer demand on their own part - is lower, but still strong.

The "seriously experienced, and financially strong" market sector - those who own multiple pieces, have been in the field for a number of years, have "legitimate" financial resources to indulge their passions (don't have to stretch so much) and have both knowledge and passion - continues to be strong.

This is reflected in the market sell through of the various model lines; in the case of Patek, for example, the high complications continue to be strong and oversold (ie, waiting lists, though maybe not as long as before, but certainly there is more demand than Patek can supply working at full capacity)

I'm not sure what you meant by "history being re-written?"

As an aside,

Most commentators on this topic tend to be either

a. myopic

b. lacking in macro perspective (similar but different to above)

c. vision distorted by vested interest

d. without historical context (similar to a and b above)

e. some or all of the above

first a few "facts" - numbers are numbers and they are the same in any language, though the implication of those numbers is subject to interpretation

US, Russia, and Japan - most recently, during the "boom times" key and among the largest markets in the world - are down a great deal. "up" and "down" are relative, of course, so I'll clarify a little more:

"boom time" I am defining here as approximately 2004 to October 2008. Some might start the beginning a little earlier or later, but interestingly, the end date is fairly universally recognized as anchored by the collapse of Lehman Brothers in the US, which also signified the "beginning" of the crisis, though there are portents of ongoing global financial crisis even before, some would go even back to the collapse of Bear Stearns.

The US and Russian markets really grew, possibly even exponentially, during this time, relative to the period before.

Japan has been in a decades long slump overall economically, and what little "waking up" there was during the "boom time" has disappeared.

On the other hand, Italy, Germany, and UK remain stable (Italy is often interpreted as being more resilient to economic downturns than most other countries, due to their culture of "la dolce vita" - no matter the economic conditions, quality of life holds high priority) and Hong Kong continues to do very well (and by extension, China)

I've heard above "facts" from several people inside Patek over the past few months, from various regions around the world.

They also apply, more or less, to other true high end brands with substance, history, and established "prestige" (versus those which were trendy and riding the waves of tendiness and over-exhuberence)

Have to run, more later if there is interest.

Cheers,

TM