Watch prices have moved a lot in 2022. After years of runaway growth, the upper end of the watch market is currently experiencing a reality check as sky-high prices for certain elite watch models such as the Rolex Daytona, the Patek Philippe Nautilus, and the Audemars Piguet Royal Oak start to come back down to earth. Booms don’t last forever; while the luxury industry is typically insulated, it’s not immune to global markets.
The factors at play here are obvious. Inflation rates continue to rise around the world while the war between Ukraine and Russia is ongoing. These events have caused ripple effects through other market indicators, resulting in some corrective pricing for pre-owned watches. But perhaps the biggest protectant for the industry is the sheer growth of the last few years. Overall, watch prices aren’t what they were a year ago, but the continued imbalance between supply and demand means they’re still selling for a premium.
The Watch Market and Inflation
As watch lovers, we’re seeing two major trends in 2022: watch sizes are going down, and watch retail prices are going up. This escalation in retail prices is nowhere near the highs of the secondary market, as it reflects the rising cost of business more than investor enthusiasm.
After the news broke that the Patek Philippe Nautilus 5711 would be discontinued, prices on Chrono24 for the famed timepiece essentially doubled between October 2021 and February 2022. Meanwhile, boutique prices for brands like Cartier, Omega, IWC, and Rolex have risen by approximately 4-7% this year. Zenith, which belongs to French luxury group LVMH, plans to raise prices by 4-5% to maintain long term continuity between manufacturing costs and retail prices.
Rolex, the best-known name in the industry, has increased prices for their lineup twice in 2022, most recently by 4-7% depending on the model. This seems to have done little to slow demand at their boutiques, where people queue up daily to catch a glimpse of display models and add their names to waiting lists. Take the case of the Rolex Daytona 116500LN: Though this model, whose value fell approximately 25% from its peak in March, has become the poster child for declining secondary market values, the average price for a mint condition timepiece still goes for more than double the suggested retail price of $14,550.
The impact of inflation on watch production at the various manufacturers remains unclear. Watch brands are famously opaque, especially when it comes to output data. But there are emerging reports of Rolex’s plan to build a new facility in Switzerland for a projected estimate of 1 billion Swiss francs.
Rolex and Omega: Stability in the Face of Uncertainty
While Rolex garners international headlines as a weather vane for the softening market, one of their chief rivals, Omega, is seeing steady increases in market value. Omega Speedmaster models have held their value despite growing inflation, and a buffet of Seamaster references are increasing in secondary market value month over month. For example, the current production Seamaster Diver 300 M (ref. 220.127.116.11.01.001) has risen by 9.9% since this time last year.
Omega is also seeing increased interest following the frenzy surrounding its launch of the MoonSwatch collaboration with the Swatch brand. Hundreds of shoppers lined up outside stores around the world this spring, hoping to take home one of the dozen planetary models. The demand continues to linger many months later and the MoonSwatch, despite or perhaps even because of its chaotic rollout, has created a new legion of watch fans. Persuading these newcomers to become repeat buyers will prove crucial to the industry as it looks to stormproof against current and future market fluctuations.