Horological Meandering

Entry level of 14k usd...

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That same $14k would have bought an 18k gold piece from VC. Now, they remove the gold rotor (only a few grams) from the same movement in the Overseas to make an entry level piece. It's unclear how much of these price changes are due to high costs vs. pricing power in a (previously) tight market.

"Profits down" beats the heck out of "losses." At this stage, it's a reality check but not a catastrophe.

We have an adage in Finance about stock markets: "you take stairs when they increase and the elevator when they collapse"

Regarding watch industry, I think companies are at a corner today after 15 years of growth.

Best wishes

Alkiro

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It's idiotic. A phantom. Nothing can grow forever.

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It is just a question of time period but everything is subject to this law.

Best wishes

Alkiro

Best wishes

Alkiro

and it made me think about the luxury watch secondary market. Bit of a reach I know. The truly few great unique Pateks and Rolexes are the AAA that are used to prop up a lot in the range of middling stuff out there.
I do feel sorry for rank file employees and the many watchmakers in the industry because conditions are not at the bottom yet.

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but it is also down in profits. Richemont is simultaneously laying off workers; cutting production; and buying back unsold stock from its ADs.

as basically a family business they can afford that.
Magnus

Things haven't unraveled yet IMO and they will in due time.  It just amazes me what the retail price is on watches these days, especially pieces from the Independents.

Talk about sky high and as what Greenspan said "irrational exuberance" about the financial markets.  My opinion is the same thing for the watch industry today.

My 2 cents,
AT

Best, Thomas

He wrote about a higher demand for luxury goods as prices rise. Why? It shows the others in the ultra-high wealth group that you've got money to burn. Who can justify a R. Mille tourbillon ratrappante at over $1.1MM? Watch industry, including independents, are riding the wave but there are cycles in which this may be undesirable and buyers may demand real horological quality and innovation for non-ridiculous, reasonable prices.

He wrote about a higher demand for luxury goods as prices rise. Why? It shows the others in the ultra-high wealth group that you've got money to burn. Who can justify a R. Mille tourbillon ratrappante at over $1.1MM? Watch industry, including independents, are riding the wave but there are cycles in which this may be undesirable and buyers may demand real horological quality and innovation for non-ridiculous, reasonable prices.

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...here at the watch enthusiasts' playground.

All of us loves watches, but everyone, even (especially?) the heavy-hitters, express almost a sense of schadenfreude at the industry's comeuppance thus far. We couldn't have what we love without the industry, but we've come to resent many aspects of that very industry.

I think this really shows how as consumers and enthusiasts we feel somewhat taken advantage of by the industry, for example:

--ever-increasing prices without commensurate increase in product quality/value.

--abysmal turn-around service times.

--too-often poor quality assurance.

--huge proportion of prices spent on marketing and brand parties which for many enthusiasts doesn't add anything to the end-product or the pride of ownership, and in fact is sometimes seen as a detriment even without considering the dollars involved.

This may be the early stages of a sea-change in the industry, and frankly I welcome it. There will be a wash-out among many fringe players, especially independents.

Cheers,

John

I have being saying this for a while, but got flamed in another forum. Like your three points. I have criticized the ever increasing prices, horrible service time, and poor quality (of my Patek). What I got in return was I don't know watches, and the work goes into it (even though I see more and more machined parts in high end watches). When it comes to service time, the response I have seen is even more ridiculous. From: people who owns Patek should have more than one watch to rotate, or Patek are complicated watches that needs a long time to fix, to if you want to own a Patek, you should accept long service time.

Why would any watch manufacturer improve if people are willing to suffer subpar service?

Anyways, the Swiss watch industry have enjoyed a long and prosperous period, it's time for them suck it up.

Its not just the economy that is in play here. Younger folks are clearly not seeing the fascination with watches and all segments are trending towards "smart" watches of some type. Fitbit is very popular here and surprisingly very small for everyone yet popular. Which companies survive will remain to be seen but clearly none of them positioned themselves for a overall declining market. Given the price point difference a Fitbit is a no brainer.

to learn more details as SG will publish them next week. In particular, I would like to see a breakdown of brands, but certainly of market levels, to see where they get hurt most. This then would give indications as the impact of smart devices.
Thanks,
Magnus

is how I'd describe the industry. This has happened across all watch brands, regardless. They have had it easy until now, people have been buying their products despite the price rises and poor support. Let's hope they'll see where they have been going wrong and put it right. Bring back lower production, better quality and quality control and improved after sale services.

I think the individual companies and their products begin to lose some character.

JerryW

With some veeeeery few exceptions,  the collections from the past let's say 3 or 4 years aren't showing anything exceptional. 

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