There is little doubt in my mind we will look back on 2023 as a turning point in the story of wristwatches: quartz-based, smart and mechanical.
It has been eight years since Apple unveiled its smartwatch in 2015, a launch that many in the traditional watch world thought would finish the job that the Japanese started with quartz-based tickers taking down Swiss watch maisons that had survived for centuries.
But the arc of this story is incomplete.
A generation thinking there was no need for a watch at all, given they already had the power and omnipotence of a supercomputer in their phones, are finding they want the best of digital and analogue.
So, while Apple, Samsung, Huawei and Google might have thought the world would transition to smartwatches as quickly and irreversibly as people moved from vinyl records and CDs to steaming, they have actually steered us from assuming wristwatches would be consigned to history to a belief today that the heritage and sustainability of mechanical timepieces is a natural counterbalance to the disposable, break-neck speed of an ever-advancing tech world.
Measuring in units, the rise of smartwatches will continue, but there is still a bright future for mechanical timepieces, which appear capable of selling their heritage and brand values at ever-higher prices.
These price rises for mechanical watches, I believe, will have to be curtailed this year.
We have seen cooling demand in the past six months, and this needs to be addressed and hopefully reversed.
Every brand has experienced this downturn in the western world since the summer of 2023, and they must react.
If the watches launching at Watches and Wonders this year do not take into account the broad sweep of falling demand we will be faced with over-priced products that too few people want to buy from authorised dealers.
They will end up discounted or dumped on the grey market. This will have a negative effect on even the world’s best brands and retailers, which are the businesses best equipped to succeed in good times and bad.
This is a significantly different position to where we were at the start of 2023, which we now know was the high watermark of the post-covid boom.
It is fascinating to chart the progress through last year in the news and views aired on WatchPro, which is why a walk through the history of the past 12 months and a look ahead to the whole of 2024 is a valuable exercise.
Here, we look at the most-read articles of 2023 and their significance to the contemporary watch market. We add a little context, with the benefit of hindsight, where we think a useful lesson is there to be learned.
January 2023
We entered 2023 in the expectation that covid restrictions were in our rear-view mirror and the mood was almost euphoric thanks to a world record year for Swiss watch exports totalling CHF 25 million in 2022.
Celebrities were helping to drive demand with Rolexes, APs and Pateks wrapped up in a zeitgeist of rampant consumerism for luxury goods.
One of WatchPro’s most read stories in January was an amusing take-down by Latin pop singer Shakira who roasted a former lover with a tearing that described him as a Casio pretending to be a Rolex.
Although there were obvious storm clouds gathering, not least because of a nine-month decline in prices on the secondary market by the end of 2022, British watchmaker Bremont secured investment of almost £50 million from a funding round dominated by American billionaire investor Bill Ackman.
WatchPro reported that MoonSwatch sales since launch in March of 2022 were on track to shift 1.5 million units. Rolex increased average prices by a mere 2.5%, despite wider inflation nudging towards double figures.
February 2023
WatchPro’s reporting in February was speculating on whether secondary market prices for luxury watches had reached a floor or had further to fall, and how that would impact new watch sales. There was no obvious answer.
There was talk of Europe’s most valuable company, LVMH, buying rival luxury powerhouse Richemont. Nothing, so far, has come of it, but it would not surprise me if there are deals in 2024 — not necessarily for entire multi-billion-dollar groups changing ownership, but for brands within groups finding new homes.
March 2023
The big new ahead of Watches and Wonders in March, and a WatchPro global exclusive, was that Patek Philippe would be reducing its point-of-sale network by around 30%. Some retailers had already learned their fate, but others were waiting in purgatory wondering if they would get the dreaded call.
In a year of huge industry news, this was one of the most important because of its broader implications.
Authorised dealers that might have felt comfortable relaxing on the Patek Philippe gravy train were either axed or given a short sharp shock to improve.
Those that lost the iconic brand had significant square footage in their stores to fill, which created opportunity for rival luxury marques.
At the end of the month we had the new product splurge of Watches and Wonders, with Rolex dominating column inches and social media with the launch of the OP bubble and an ultra-exclusive Day-Date emoji watch.
Oris might have hoped it would steal the show with its Kermit ProPilot, but it was taking a knife to a gunfight.
Morgan Stanley with the help of LuxConsult released its annual report on the Swiss watch industry and showed Rolex extending its lead and, controversially, Audemars Piguet overtaking Patek Philippe for fourth spot in the league table.
This was an estimate of turnover at the headquarters level, and reflected the higher margins AP receives compared to Patek because it sells most watches directly to consumers. At retail, Patek Philippe was still around CHF 200 million ahead.
April 2023
The fallout from Patek Philippe’s ongoing reduction in its global network of doors was still the conversation at and after Watches and Wonders, but there were other significant stories moving markets.
Discontinued watches were a talking point, including Rolex’s Cellini and Milgauss, but even the end of production for such iconic collections could not reverse declining prices at auctions and online marketplaces.
Pre-owned dealers were running out of runway as they hoped for a lift-off in prices that proved elusive throughout 2023.
Watchmaster, one of Europe’s largest traders, went into administration following a major criminal raid on one of its storage facilities. It might have succumbed without that bust because the value of its inventory had been tanking for a year.
For new watches there was a feeling of retrenchment in Europe, although American markets continued to power ahead, and there were signs of life from Asia as onerous covid restrictions began to ease.
May 2023
Although everybody was talking about headwinds for the global watch market, there was little sign of the industry responding and adjusting for weaking demand.
The Federation of the Swiss Watch Industry continued to report record figures, but the situation at the sharp end of retail was deteriorating.
In the UK, following record sales in the first quarter, GfK reported a year-on-year drop. For the next seven months we saw retail sales declining in the UK while Swiss watch exports to this country have been rising.
Yes, the hottest brands had huge waiting lists for watches, but supply exceeding demand for an extended period is not a good place to be for a luxury watch market that is buoyed by scarcity.
June 2023
When the market is soft, the last thing it needs is a major controversy that further erodes confidence. But that is exactly what arrived in June last year when an Omega Speedmaster auctioned by Philipps turned out to be a cobbled-together Frankenstein watch.
Worse still Omega’s own museum was allegedly involved in the scandal, which came to be known as Speedygate.
There are ongoing court proceedings that we would not want to prejudice with additional speculation, but the furore around the Phillips auction was both a symptom of how overheated the market for certain types of watches had become, and a warning that excesses were starting to skew people’s moral compasses.
Another sign that the market had gone mad came from the United States, where an authorised dealer for Patek Philippe was sued because, according to the lawsuit, it had promised a highly prized Nautilus if the customer bought a number of very expensive watches and jewellery pieces.
Again, the legal process is ongoing, but WatchPro came down firmly on the side of the retailer because we have seen various version of this shake-down over recent years.
The retailer may have overstepped the mark in terms of what it could promise a customer (particularly after it had lost the Patek Philippe agency), but sending in the lawyers felt like another type of intimidation that ADs of scarce watches have faced in recent year.
July 2023
Perhaps it was a fallout from the Speedygate scandal, but two of the top three most-read articles on WatchPro.com were about how to spot fake luxury watches.
In the primary market, Razny Jewelers, a powerhouse multi-generational retailer headquartered in Chicago, gave a fascinating interview about how sophisticated back end systems linking brands like Rolex and Patek Philippe have become.
Unappetising as it may seem, a pretty dry subject about customer relationship management software is instrumental in shaping the luxury watch market.
A decade ago, brands simply sold to retailers and let them get on with finding end consumers for their watches. If those watches did not sell, retailers would offer discounts and incentives to customers or, if that didn’t work, offer even deeper discounts to grey market dealers.
Either way, brand values were damaged.
Today, brands have almost perfect oversight over what is selling through from retailers to consumers, and are far better at adjusting supply to demand. They also incentives their sales team more intelligently, so a rush to close a quarter with watches shoved down the throats of unwilling retail partners is less common today.
It will be interesting to see whether this theory holds up in 2024 when publicly-listed groups need to show their shareholders that sales and profits are solid.
August 2023
European, and particularly Swiss companies tend to slow down over the summer, but there was no rest for the media class when Rolex broke the news that is had bought Switzerland’s largest and most historic jeweller, Bucherer. This was the biggest story of the year with potentially far-reaching implications.
It meant that, while Rolex had deliberately steered clear of competing with its hundreds of authorised dealer retail partners, it was now head-to-head thanks to its ownership of the mighty Bucherer, particularly in Switzerland, the United States and Britain.
The industry deliberated whether Rolex would use Bucherer as a bridgehead into bringing retail in-house and jettisoning its authorised dealers.
WatchPro’s editor-in-chief Rob Corder took a different view, suggesting that Rolex had been chosen as a buyer for Bucherer ahead of Watches of Switzerland Group because it did not want a massive retail company to have too much power.
Rolex would prefer a balance between a handful of mega retailers — Bucherer, The Hour Glass, Seddiqi, Watches of Switzerland, etc — and the best family-owned independent retailers.
September 2023
If WatchPro readers were asked to guess the most-read story of the year, few would go with a court case in Geneva that might settle a long-running dispute over the ownership of a Patek Philippe watch owned by John Lennon.
It is a grail watch spoken about with the same excitement as the missing Omega Speedmaster worn by Buzz Aldrin for the very first moon landing. If it ever comes to auction, experts believe it will sell for over $10 million.
More than 250,000 people read our story about the John Lennon watch, proving the importance of provenance when it comes to the desirability of vintage timekeepers.
Swatch Group was hoping to rekindle the hype around the original Swatch X Omega MoonSwatch launch in 2022 with the creation of a Blancpain Fifty Fathoms in the same bioceramic material.
If WatchPro.com’s traffic was a barometer for the success of this initiative, it was a bust. The story did not even make the top 10 most-popular in the month of its release.
October 2023
There was a definite chill in the air as we entered October. Retail sales for watches at all prices had been falling since the spring, and the prospect of a pre-Christmas bounce was looking remote.
As with all downturns, not all businesses were affected equally. Retail partners for brands with long waiting lists could contact people who had been waiting years for their watches and tell them that their lucky day had arrived.
But the mid-market with abundant stock suffered. At the peak in 2022, buying a Breitling, Omega, TAG Heuer or a piece of expensive jewellery from a local jeweller was seen as a great way to move up a waiting list for Rolex. That delusion ended last year.
October was the month when the marketing began for the big autumn auctions. Marlon Brando’s $2m Apocalypse Now Rolex Submariner was put back up for sale by its millionaire Omani owner. Few foresaw the controversy that would engulf that resale when it was handled by Christie’s in Geneva.
November 2023
The Marlon Brando Rolex sold for $5 million, a healthy profit over the $2 million that was paid for it in 2019.
But the owner was not satisfied.
As the year ends, all the watches sold that day by Christie’s have been impounded while a court works out whether they should go to the winning bidders at the auction or returned to the Omani owner.
December 2023
And so we come to the year end, and it is ending as it started with prices falling for the most traded watches on the secondary market. The most-read story so far in December concerns Rolex Submariner prices cratering, but the same correction is being seen across the market for watches that saw prices soar in 2021 and 2022, and then drop.
Ripples from news of a second hand watch trader acquiring historic and venerable jewellers — all of them longstanding Rolex partners — are being felt across the world.
A few years ago it would have been unthinkable for Rolex to give the green light to such a deal. It should just how much the watch world has changed this year.
