What I Will Keep in mind from 2021 Concerning Watches

2020 has been a tough yr for many people. The mixture of a pandemic and lockdowns has been dramatic for our lives and, since you’re studying {a magazine} devoted to watches, for the watchmaking business. This yr, 2021, has definitely been higher on a number of ranges, however not but ideally suited, as we’re nonetheless dwelling in a world filled with uncertainties. Wanting on the vivid aspect of issues, 2021 has been an incredible yr for MONOCHROME. We’ve enlarged our core crew with new members, we’ve printed extra articles than ever earlier than (over 1,100 articles in whole) and we efficiently launched two collaboration watches – the Montre de Souscription 1 and the Montre de Souscription 2 – that bought out quicker than we ever dreamed of. On this regard, I believe 2021 has been an incredible yr for us. However, as stated, not every part was excellent. As we’re about to show the web page on this yr, I wished to share with you what I’ll bear in mind from 2021, the ups and downs, the tendencies, my emotions on the general watchmaking world.

Enterprise is recovering… however with uncertainties too

information and numbers, we are able to definitely say that gross sales of luxurious watches for the yr 2021 had been good. Actually, and in accordance with the Federation of the Swiss Watch Trade (and its report of November 2021), gross sales are anticipated to be larger than 2020 – which isn’t a shock, contemplating the historic fall in gross sales we’ve seen over the yr, at minus 22%. Extra curiously, gross sales will most definitely be larger than pre-pandemic ranges, with exports which might be about 2% larger for January-November 2021 than the identical interval in 2019. Even higher, the FHS is planning on gross sales that might be near the report ranges of 2014, because the Federation plans on Swiss watch exports of about CHF 22 million, near the CHF 22.4 million reported in 2014. On this aspect of issues, we are able to say that the market has recovered.

However there are 2 feedback to make. To start with, even when the gross sales are good this yr, it’s the results of a correction and isn’t sufficient to compensate for the losses recorded by most manufacturers over the yr 2020. The influence of the pandemic is there, undeniably, and could have a long-term impact on the enterprise, regardless that, let’s be constructive, gross sales in 2021 have definitely been higher than some may need anticipated. 

Second, if gross sales are good, the heart beat of the business remains to be comparatively gradual, and types/teams are nonetheless dwelling in an unsure future. With Omicron casting its shadow, it may properly be that 2022 will begin on tough grounds, as a number of international locations have introduced already some confinement measures and journey restrictions. It will, indisputably, impact the enterprise. 

Baselworld is, sadly, a factor of the previous

The mixture of the pandemic, the cancellation of the 2020 version, and the departure of just about all the foremost exhibitors marked the tip of the most important watch honest as we’ve come to realize it. It’s a reality, Baselworld, the extravagant, outsized, frenetic watch honest that all of us liked is useless. Interval. This function now goes to Watches & Wonders Geneva, which now gathers many of the actors of the watch business – over 40 manufacturers, with heavyweights similar to Rolex, Patek, Tudor, Grand Seiko, LVMH, and all of Richemont’s manufacturers.

But, 2021 gave us two indicators of hope concerning the way forward for Baselworld. Positive, we knew that the format won’t ever be the identical. First, the present introduced its presence in the course of the Geneva Watch Days 2021. The outcome, a darkish occasion, in a basement, with a dozen manufacturers exposing in, sorry for being impolite, horrible circumstances and minimal house, with none visibility. It could be an understatement to say that this pop-up occasion was disappointing. The identify Baselworld deserves higher than that.

Additionally, in June this yr, the group of Baselworld introduced that the present will happen once more, within the historic location, in March/April 2022. What was once a very powerful annual assembly place for the posh manufacturers within the watch world was about to return again, a spot of exhibition the place “smaller watches and jewelry producers and gemstone merchants can current their merchandise and retailers could have environment friendly and quick access to the variety of producers” in accordance with the MCH Group. With a mixture of bodily and digital presence, the idea was not excellent on paper, however at the least promising. 

Nevertheless, as introduced lately, the 2022 version of Baselworld has been, as soon as once more cancelled. “Organizers have determined to take extra time for the launch of the brand new idea. Baselworld, scheduled for spring 2022, will due to this fact not happen,” is what you may learn on the web site. The long-lasting present has been struggling and will definitely wrestle once more. Sadly, as I liked this second of the yr and the everyday environment of the present, pretty completely different from the luxurious corridors of the SIHH.

2021 was not a yr of audacity and information creations… however of conservatism

This example is comparatively straightforward to grasp. Understanding that the enterprise was solely recovering and that uncertainties are nonetheless current, most manufacturers have been taking part in on the protected aspect this yr. I’m not saying that we haven’t seen many new fashions – actually, there have been a whole lot of latest launches in 2021 – however most new watches had been evolutions of present fashions, new SKUs (new dial color, new materials, addition of a complication to a set…) Creativity wasn’t the key phrase for 2021 and I consider that innovation – whether or not when it comes to design or concerning technical and mechanical content material – has to return again in 2022. 

Certainly, this wants investments and risk-oriented administration (which isn’t essentially a standard factor in giant teams…) however it would repay. Being in a wait-and-see coverage gained’t deliver vitality to the market or to the gross sales. So pricey CEOs and product managers, please be inventive, please take dangers, please innovate, and produce contemporary designs to the watch business. That may solely enlarge the scope of your clientele and enhance the eye in the direction of this business. 

Auctions and Second-Hand markets are booming

Whereas the pattern isn’t new, 2021 confirmed as soon as once more spectacular development for the public sale and second-hand markets – that are definitely completely different, but additionally are the 2 sides of a coin, each advertising largely used or classic watches. 

First, auctions. The watch departments of the 2 principal auctions homes, Phillips and Christie’s, each reported report revenues in 2021. Unfold over 3,213 tons in the course of the yr, Christie’s achieves USD 205 million gross sales in 2021, in comparison with USD 80 million in 2020 and USD 130 million in 2019. This marks a 50%-plus enhance in comparison with the pre-pandemic degree, numbers which might be reinforcing the concept that development is and might be discovered on this portion of the market. In the identical vein, Phillips watch division introduced that it achieved its most profitable yr but once more, with an annual public sale whole of over USD 209 million, a report for the home however the first time this sale whole has been reached by any public sale home. It represents a rise of income of 57% in comparison with 2020. Notably, the rise is generally seen with the rise of on-line bids, comprehensible understanding the internationalization of the market and laws on travels. 

Concerning second-hand watches, it’s more durable to measure the precise measurement of the market – it’s enormous and unfold over 1000’s of actors. But, the tendency is clearly on development, with a market that’s estimated at about USD 20 billion in accordance with CNBC. The explosion of the market is pushed by on-line gross sales – due to main actors similar to Chrono24, Watchfinder, Watchbox, Chronext, and even eBay lately – and likewise by the scarcity of latest watches. As such, McKinsey (an American consultancy agency) estimates that pre-owned watch gross sales might be about half the dimensions of the marketplace for new watches by 2025 (round USD 30 billion), whereas it represents a few third of the market as we speak.

The rise of contemporary watches and impartial watchmakers at auctions

Up till very lately – take into consideration a few years in the past – data at auctions had been largely regarding classic, extremely necessary uncommon watches – stainless-steel Patek Philippe chronographs, distinctive Breguet pocket watches, Rolex prototypes… Whereas these timepieces nonetheless maintain an necessary share of the gross sales at auctions, there’s a brand new pattern coming and that’s necessary and uncommon fashions from high impartial watchmakers. And this covers watches that, for the most important half, have been produced post-quartz disaster, if not post-2000. 

In 2020 and 2021, we’ve seen already necessary names like Philippe Dufour, F.P. Journe, De Bethune, Derek Pratt, George Daniels and Roger W. Smith, Richard Mille (to call a couple of, however this pattern considerations many different nice names) reaching a lot larger costs than a few years in the past… and even surpassing some necessary watches produced by established manufacturers. The outcomes achieved by a few of these indie watchmakers at Solely Watch 2021 are additionally confirming this pattern. 

The watches that had been already unattainable in 2020 are much more unattainable in 2021…

Certainly, the state of affairs that we defined already on a number of events, concerning sports activities Rolex, the Audemars Piguet Royal Oak, or the Patek Philippe Nautilus, is getting fully out of fingers. Merely, the watches that had been already unimaginable to accumulate at retail value in 2020 are actually much more unattainable and are coming with insane premiums – suppose 200% over the retail value or extra. 

A Rolex Daytona ceramic bezel will value you about EUR 35,000. A Royal Oak 15202ST… That’ll be a simple 100k euros. And a easy blue dial Nautilus 5711 (bear in mind, it’s a metal sports activities watch with a time-and-date motion) will come at about EUR 130,000. And don’t even get me began on the Olive Inexperienced model, which is coming at irrelevant costs.

However this example is true for a lot of extra fashions, with a fabricated shortage (who’s responsible, this can be a very advanced query, with no straightforward reply). There are Rolex Oyster Perpetual 124300 with mild blue dial (which is NOT a Tiffany watch) now listed for EUR 70,000, and even way over that… And that got here simply after the sale of the Nautilus Tiffany by Phillips. The place is the rationality? I don’t know anymore.

…And a easy Nautilus can value greater than essentially the most difficult wristwatch ever made by the exact same model

Speaking concerning the Nautilus Tiffany-Blue dial, whereas we’re at it, and to finish this column on a lightweight (not that mild really) be aware, how is that even potential {that a} metal sports activities watch can value greater than the model’s most complex wristwatch ever created – the Grandmaster Chime, and its variation, the 6300G – a watch with 20 problems, and listed for about USD 2.2 million?

I do know the Tiffany-Blue 5711 was bought for a charitable trigger, however nonetheless, I typically have a tough time understanding the ins and outs of the market… Fortunately, and in case you learn MONOCHROME frequently, you’ll see that the watchmaking business has way more to supply than these overly-discussed fashions. 

From your entire crew of MONOCHROME, we’d wish to thanks for studying this journal and for sharing your ardour for watches with us. We want you and your households all one of the best for the vacation season.