Quarterly financial updates from the publicly traded The Watches of Switzerland Group (WOSG) are a treasure trove of insight and information on market conditions, and last week’s investor call suggested there could be relief in sight for customers yearning for the hottest watches from the likes of Rolex, Audemars Piguet and Patek Philippe.
This data comes on top of reports from secondary market players including Chrono24 and Chronext, which have reported that prices have dropped by up to 24% for watches like the Rolex’s Rolex GMT Master II Batman, which could be another sign that the market is expecting shortages to ease.
The Batman has seen some ups and downs over the last twelve months and is off its highest price on Chrono24 by 24% at £12,900, although this is still well above its retail price.
During his investor call, Brian Duffy, CEO of WOSG, made a simple, but potentially important observation when he suggested that the Covid crisis has reduced demand this year faster than supply has dropped with watchmaking factories closed.
“Supply is always our biggest constraining factor,” Mr Duffy says. “But we are seeing a bigger impact on demand than on supply.”
He believes production will be down by around 25% across the luxury watch industry this year.
Even with a slight rebalancing between supply and demand, the hardest to find unicorn watches are certain to remain in short supply.
Mr Duffy says there has been no change to the group’s waiting lists for these watches. “We will not add anybody to waiting lists if we think they will have to wait more than three years. Waiting lists have not reduced this year,” he reveals.