A high-end watch is today the unequaled symbol of your status. It really represents who you are and what you stand for. It defines you.” So says Paul Kupelian, chief operations officer of retail operations at Holdal, part of the Abou Adal Group, which represents such luxury watch names as Patek Philippe, A. Lange & Söhne and Vacheron Constantin.
Watches are big business. Just pick up any print media — from the International Herald Tribune to the Financial Times to the glossies — and you will notice just how much ad space is devoted to luxury — and even the not-so-luxury — timepieces. Indeed, three years ago, Rolex, arguably the most famous watch brand on the planet, bought the front page of the Herald Tribune to advertise its new GMT Master II. Go figure.
These ads sell many ideas. There is heritage: the father-son bonding narrative that tells us we never actually own a Patek Philippe. Or endeavor: the sporting achievement ads from Rolex, TAG Heuer and Longines that equate success to privilege. Finally, there is glamour: Omega’s dreamy celebrity shots of George Clooney in Venice and Nicole Kidman wrapped in diamond watches. There are things for all of us to buy into.
And we do it with gusto. According to the latest figures, in 2012, the Swiss watch industry exported around 28 million finished timepieces with a value of SF21.4 billion ($23.5 billion) — 10.9 percent growth year-on-year.
While Europe showed the highest growth in demand, China for the first time surpassed the United States as the leading market for luxury watches. “Blancpain almost doubled its turnover in China along with Longines and Omega,” says Mher Atamian of Atamian Freres, a Lebanese agent for all three marques.
In the global battle of the brands, Omega, once a mid-range market player with a huge heritage, is now the world’s best selling luxury watch brand. In response, Rolex has come out fighting, strengthening its position in Europe and launching new models of its timeless classics.
Meanwhile, brands that were not so mainstream but are watch royalty nonetheless, such as Patek Philippe, Vacheron Constantine and Jaeger-LeCoultre (JLC), have all picked up in popularity as customers recognize the high level of craftsmanship and the fact that these watches by and large retain their value and can become genuine heirlooms for future generations. “Patek Philippe is today the most admired and respected watch brand in the world,” says Kupelian. “Consumers understand the high quality, the craftsmanship, the complications and the exclusivity behind every Patek Philippe creation.”
They are also among the most expensive — the most affordable is a ladies’ Twenty-4 that costs around SF11,800 ($12,600). Opinions differ, but the basement entry into luxury watch ownership cannot realistically be lower than $1,000, with the main battle being fought in the $5,000 to $30,000 range.
According to World Watch Report, Omega’s Seamaster, Rolex’s Submariner and Daytona hold the position of the most popular men’s status symbol watches across the globe. Not far behind are TAG Heuer’s Carrera, Jaeger-LeCoultre’s Reverso, Audemars Piguet’s Royal Oak and Cartier’s Tank.
Basle in Switzerland plays host to the world’s most prestigious annual watch fair, an event where the watch industry’s big hitters unveil their latest creations and set the trend for the next 12 months.
“This year we saw a lot of navy and in some brands denim was used, as well as a lot of other innovations in colors and color mix,” says Simone Tamer from Tamer Freres’ agent for Audemars Piguet, Breitling, Montblanc, Omega and Swatch.
“There has also been a move toward black carbon and black PVD. We are [also] seeing a lot of two-tone on the dial with customizations in pink and yellow gold. This not only adds a nice retro aesthetic but makes the watch more affordable and understated, keeping the gold effect on the watch.”
Tamer also said that innovation has played a big part in many of the brands’ latest offerings. “When it comes to advances in calibers, movements, power reserves and complications, 2013 is the year in which a lot of the research and development is paying off.”
Kupelian agrees, confirming a move toward slimmer watches as well as complications such as tourbillons, perpetual calendars, chronos and craftsmanship. “The new trends are for more complicated watches for men and women and much thinner cases. Most of the big watch brands are showcasing their inherited craftsmanship such as diamond setting, enameling and guillochage engraving.”
But what of the new models? Among the highlights of this year’s show was the unveiling by Rolex of a blue face and brown bezel platinum Daytona Cosmograph to commemorate the 50th birthday of the iconic chrono. Rolex fans will also have welcomed the new Yachtmaster II with a blue Cerachrom bezel and the GMT Master II with one-piece, two-tone black and blue bezel, a first using Cerachrom.
Rolex also has a new range of unfussy day-dates in six colors. “I think ever since the recession we have seen consumers more aware of what they buy and how they flaunt it,” explains Ziad Annan, Rolex’s agent for Lebanon and Cyprus. “In these tough times, it is perhaps better to wear something a bit understated.”
Tudor, the brand that was once seen as Rolex’s poor cousin, has had another good year with most demand from the Asian markets, especially China, where there is a waiting list for the Pelagos and Black Bay Heritage models. The star of Basle was the dramatic Black Shield, a nod not only at Tudor’s logo but also a pointer in the creative direction in which the brand is heading.
Overall, the buzzwords appear to be modernization and improvement. “The manufacturers have made a big effort to produce unique pieces,” believes Atamian.
“You only have to look at Breguet’s Hora Mundi and the JLC Gyrotourbillon. IWC has upgraded its Ingenieur, while TAG Heuer has added to the Carrera range on the occasion of the watch’s 50th birthday. Omega is putting the coaxial movement in more watches, while Glashütte and Blancpain have strengthened their ladies’ lines. A lot of manufacturers are using ceramics, IWC especially — a move into an area that was generally reserved for ladies watches. Finally, it is good to see JLC making more noise.”
Meanwhile,on the home front
Back in Lebanon, a country that is never out of the top five Middle East markets for luxury watches, a man’s watch is almost, if not more, important than the cut of his suit and all the major watch importers in Lebanon recognize the discernment of the Lebanese consumer, who they feel is now moving away from traditional comfort zones.
“The knowledge and expertise of some [Lebanese] collectors or [the] watch-passionate is really amazing,” says Kupelian, who has noticed that, while traditionally it is the male consumer who opts for the complications, the limited series or innovations, more and more women are becoming watch collectors, appreciating more complicated watches.
“Consumers are more discerning,” agrees Tamer. “They know what they want. Now, we are seeing greater openness and interest in movements and complications. Take Audemars Piguet. We have clients who are on long waiting lists to receive their limited editions, which are a separate and very distinguished niche. I must say that the Lebanese consumer has good taste.”
Atamian agrees. “We have a lot of collectors who know and appreciate watches. They go on forums and read the blogs. They often know more than I do.”
But with such discernment comes greater demand for an all-encompassing retail experience. This is a factor that is not lost on Lebanon’s watch agents. In a local market that has seen tourism affected by political instability and confidence over security, Rolex’s Annan believes now more than ever the priority is to focus on customer care and improve service both in the showroom and with after sales maintenance. “Integrity has to surround everything we do,” he says.
Every clock face tells a story
So let’s assume you have earned a decent bonus and want to blow part of it on a luxury watch, one that will hold its own in almost all situations. This was a simpler choice 20 to 30 years ago. A man would own one watch — which the vast majority still do — and wear it on all occasions, whether it be formal, smart or casual, and if it weren’t waterproof to 1,000 fathoms, he would take it off before swimming or showering.
Now all bets are off. “Each brand has its own image that is reflected in the lifestyle of the client buying it,” explains Tamer, adding, “Breitling for example has always been the watch for professionals, such as deep sea divers and especially aviators.”
The appropriate size of a watch has also increased. There was a time when a 34mm to 36mm diameter was considered a perfectly manly size. Not any more. “Today, 39mm to 42mm is the ideal size. Forty-four mm is the maximum,” says Atamian.
Size is not the only concern. Does one choose steel or gold in all its various shades? Does one go for a simple plain face or a busy Chronometer or a GMT function? Does your watch need to be waterproof to a weedy 300 meters or a skull-crushing 1,000 meters? Will it have an “exhibition” back in which you can see all the parts whirr pleasingly as one? And then there is the issue of movements. Is it in-house or is it a generic movement made by the Swiss giant ETA? There is a lot to consider.
Which brings us nicely to the subject of those hugely popular watches that are nonetheless sniffed at by watch snobs, because they either don’t have the heritage or are too closely associated with jewelry or fashion. Well, they too are adapting to the demands of the market and greater consumer awareness. Panerai, Cartier and Hermes have all developed in-house movements, one of the benchmarks of being taken seriously. Panerai, the Italian sports watch, knew it had to back up soaring popularity with credibility and now has its own hand-wound and automatic movements, while Cartier with its Calibre de Cartier and Hermes with its Caliber H1837 have also gone down a similar path.
“There is no right and wrong,” advises Kupelian. “The right watch is the one you like; the one that makes you feel good, authentic and tasteful. The rest is left to each person’s personal taste and preferences. The best thing is to take the time to learn about each and every brand and understand their respective values and then choose.”
All that glitters
Meanwhile, gold watches accounted for more than 6 percent of total Swiss watch exports by units. In revenues, gold watches accounted for SF7.3 billion ($7.81 billion), an increase of 20.5 percent compared to 2011. But the question we all might ask is what happens to the price of gold watches if the price of gold drops dramatically as it did earlier this year from a January high of around $1,700 an ounce to the current price of around $1,300? The answer is not a lot, so anyone who thinks that a Patek Philippe Calatrava or a Vacheron Constantin Patrimony will be that much more affordable is going to be disappointed.
“I can’t see a manufacturer leveraging this situation,” says Annan. “Certainly Rolex, which is the only manufacturer to have its own smelter and lab to develop its own formulas, would never do it. We never want to make the customer feel he is being squeezed by market pressures.”
In fact, according to Kupelian, the real force behind rising prices is the commitment to value and innovation, such as increasingly complicated mechanisms and more artwork. So now you know.
And what about all this talk of watches holding or in some cases appreciating in value? Like with art one should buy what one likes, not what one assumes will appreciate in value. When it comes to watches, the right brands, especially certain models by Rolex, Patek Philippe, Jaeger-LeCoultre, Vacheron Constantin and in particular Panerai, which produces lots of limited editions, can do well.
“As consumers become more aware of the value of a ‘real watch’, they are willing to spend higher budgets, especially when it comes to brands and models that increase [in] value with time,” says Kupelian. “These are perceived as an investment and a heritage for future generations.”
For example, a well-maintained Rolex GMT from the early 1970s, which probably cost around $600 at the time, could easily fetch $5,000 at a specialist auction.
Look out for updates of iconic models and try to buy an original before a re-release. The most famous price spike in recent years was experienced by the original 1970s version of the Tudor Heritage Chrono, of which relatively few were made, soaring from $3,000 to almost $15,000 overnight after its updated model was released in 2010.
And for those who are buying with an eye to the future, keep everything — bag, outer box, inner box tags and especially the receipt. To collectors, provenance is everything… and time, these days, really is money, in more ways than one.