What happened to the days when owning a $5,000 Cartier watch seemed extravagant? It used to be owning a million-dollar home was a sign of wealth…today, its a watch.
In an article in today’s WWD, in today’s gilded world, uberluxury is thriving at Switzerland’s top watchmakers. Watches in excess of $100,000 are the new bellwether for the extraordinary.
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François-Henry Bennahmias, chief executive of Audemars Piguet USA, said they sold more than 80 watches priced at more than $100,000 last year. "This year, we’ll sell more than 100 [watches of that caliber]," he added.
Executives said they see no reason for the trend to stop. Industrywide, the Federation of the Swiss Watch Industry said sales of watches through the first half of the year gained 15.5%, with luxury watches growing at as much as twice that rate.
Watchmakers can’t always keep pace with demand due to the intensive labor required to make these collector items. Additionally, it takes years to train new watchmakers, making it difficult to rapidly boost production.
Jaeger-LeCoultre, has an estimated annual output of 50,000. Patek Philippe made 38,000 watches last year, while Rolex produces more than 500,000 watches a year.
"The demand is extraordinary," said Jerome Lambert, chief executive of Jaeger-LeCoultre. "Customers are ready to wait two years to get the watch they want."
Or more. Lambert said an order today for Jaeger’s new Gyrotourbillon watch, a $414,000 at current exchange, supercomplicated piece with a tourbillon mechanism that rotates on a double axis, will be delivered in five years.
Severin Wunderman, the owner of Corum, the luxury Swiss watchmaker, said his firm had sold 22 watches retailing for $1 million-plus through the first six months of this year. Two were sold in the U.S., three each in the Middle East and India, five in Southeast Asia and nine in Russia. "This trend seems to find no end," said Wunderman. "Big sales are the norm for the moment, and not the exception."
Meanwhile, the trend is having a trickle-down effect
to less-expensive mechanical watches by pushing average prices up
across the board. Brands traditionally geared to the midmarket — from
Tag Heuer to Omega — have reported double-digit hikes in average
prices. Executives said it largely reflects market demand for more
sophisticated watches, such as chronographs or watches sparkling with
Breguet Reine de Naples
"We see sales daily on price points that hover around $50,000 retail," said Andrew Block, vice president of Tourneau. "A $10,000 to $15,000 sale is no longer the highest sales of the day. We are witnessing more and more sales made that top the $100,000 mark."
"Only now is the U.S. grasping the idea of high-end luxury watches. They now understand that a watch that costs $40,000 doesn’t exactly mean it’s clunky. It can also be understated, and that the price is linked to the art of the precision movement. There are $300,000 Breguets without a single diamond."