Have we reached Peak Watch?

Wibbs

I've been musing lately on the current landscape of the watch world and about this hobby that went from very obscure and small scale to very much in the mainstream. I have seen in many sources a concern about a price bubble in the vintage market, which is one aspect(and one I'd believe is a bubble). Another aspect might be the increase in prices for new watch models from most of the recognised brands, coupled to increased service prices and increasing part supply restrictions to third party watchmakers. Outside of wider economic trends is there a case for saying we have reached peak watch?

On the vintage collector front there are all sorts of changes that have gone on in the last few years. Availability of stock of good pieces has dropped right off and prices have gone through the roof in many areas and brands. Sales are quite stagnant too, outside of outlets like Hodinkee, which is a subject all of itself and the market has been looking for every more obscure brands and watches to try and fill the need. I also know of a few long term collectors that have been quietly selling off their collections, because they kinda want to get out now and just hold onto two or three of their most treasured pieces(and not always the most expensive).

Thoughts?

titan18

Not sure we've hit peak, or have we gone past it, as Swiss watch exports are down pretty much year after year lately. China stopped buying as much, and even Hong Kong quietened. Apple will probably kill the likes of Fossil too even if I don't think they'll compete at the mid to high end market for a while, but they can definitely devour the lower end.

Btw, where do you buy vintage watches?

Wibbs

The new market seems a bit deflated alright. At least in previously booming sectors like the Far East. The vintage market is another animal, but there's definitely the sting whiff of overheating about it all. The blue chip pieces have gone crazy money, the "lesser" pieces and brands have also hyperinflated in value.

titan18 wrote: »

Btw, where do you buy vintage watches?

Used to buy them in "junk shops". house auctions and the like, in the last ten years pretty much online, mostly eBay. Though the latter coughs up fewer and fewer interesting watches and far fewer actions compared to buy it now sales. There are far more people looking for a dwindling supply of vintage watches.

Maybe it'll go like the classic car market? It's not so long ago that an old car, was just that, an old car. I've a couple of UK car mags from the early 1070's and cars like used Ferrari's(at least the "everyday" ones, Dinos, Four seaters, non competition two seaters) could have been bought for similar prices to new mid range Fords. Maserati's and the like were even cheaper. As Jay Leno notes about one of his Lamborghini Muira's, he got it for free back in the 80's. The owner didn't want to spend money to fix the problems it had, so just wanted rid. Million+ car today, a busted one would be at least 500,000.

Investors got on board first and drove up prices, but that was relatively static and actual car nerds were most of the market, up until the internet garnered wider interest and now the real blue chip stuff, the Chrome Era cars are pretty much only the scope of millionaires. Because of that what were seen as lesser cars and marques are being brought into the market to supply demand. Peugeot 205 GTi's from the 80's hitting near 50 grand kinda thing. Prices that were once the range for the lower end Italian machinery. Not so long the Top Gear trio had one of their "challenges" which consisted of buying Italian exotica "supercars" for under ten grand sterling. Those same three cars today would likely require more like 100,000 to play the game, or not that far off it.

We're seeing a similar trajectory with vintage watches I feel. Now the car market has been around for longer so might be more informative when it comes to this sort of "hobby" or "investment" and there have been"corrections" in vintage cars. One in the 90's was one such. Signs of it coming were a slowdown in the wider economy. Much more public awareness of the notion of "investment" in classic cars. Lots of big ticket high profile sales and auctions on a near monthly basis. The same cars changing hands regularly. Dealers buying up any stock they could get their hands on to get on the gravy train and more dealers than buyers kinda thing. Lesser quality cars selling at crazy prices, just because they were a particular classic. Public perception saturation was reached. Generation Babyboom were most of the people driving it, having hit that time with enough spare cash to splash. The real collectors had the collections they wanted pretty much(and stopped selling) and as prices rose the newbies hadn't the cash to jump in or simply didn't want to spend that cash. Within a matter of months prices halved or more across the board and took near a decade to recover. I see a lot of similarities with the vintage watch world of today. If anything with the interweb it's more acute.

blue5000

You've been at it a lot longer than I have Wibbs. But things have changed a lot in two years. Markets are fickle, always were, always will be. It's the herd mentality.

Watches are a bit like vintage cars but they're a lot easier to store/transport/service and sell or buy, so almost any joe soap could buy a vintage watch whereas vintage cars are more of an elite market.

I think you have to break down your opening post into smaller pieces. Namely Swiss/ rest of europe/ Asia. You probably deliberately didn't mention any brands. But ETA have attempted to limit the whole spare parts availability etc, I think this may have back-fired on them. They were caught on the hop when the Chinese market calved. Now they've had to jack prices to maintain margins. I can't comment on Rolex, I simply don't understand the whole phenomenon.

On the vintage side good quality bargains are gone IMHO. If you find one now it's pure luck. But there are still bargains out there, my brother got a working vintage seamaster in a car boot sale recently for €20 the jammyblastard :mad:

Are the long term collectors just getting old and cashing in? Or are they maybe disillusioned by the whole thing?

Just my 2 cents, and I haven't really answered the watch peak question. But I think we hit watch peak in the early 70's before the quartz bomb and ever since the industry has been teetering on the brink. The rise of the internet gave the vintage market a boost, but I think that may have plateaued now for most brands.

Maybe you should have asked it in AH:D We're too biased here.

Deep Thought

I think a lot of the problem is down to the like of hoodkinee and similar sites.

As you alluded to, there are no real bargains anymore (well very few)

As good as these sites are, the average Joe can log on, see what they are talking about and then try to purchase, and because everyone else has also seen it, the prices go up as they all think if its a 1000 now..then in 5 years could by 1300/1400.

Even on known Forums, people are now as a minimum getting back what they put in. I'm not saying you should take a big loss - but it was always about the watch and not the money.

Watches are now being seen as an investment and not as a time pieces. This can be seen when people are selling and the watch isn't even worn.

The like of Rolex and Omega are also regularly putting up prices, and then at the same time restricting sales of spares etc to independent watchmakers, which means the cost of servicing goes up.

So, I think for me anyway Peak Watch has been reached or already exceeded

Wibbs

blue5000 wrote: »

Just my 2 cents, and I haven't really answered the watch peak question. But I think we hit watch peak in the early 70's before the quartz bomb and ever since the industry has been teetering on the brink. The rise of the internet gave the vintage market a boost, but I think that may have plateaued now for most brands.

I suppose it also depends on viewpoint too B. If you take things from the Swiss side, the (late)70's were bad, but from the Japanese/Asian side they were very good. For a time they were pretty good for the Americans too. Then it got good again for the Swiss in the 80's with the Swatch, which essentially saved their industry from complete collapse. I'd reckon that because of the rejuvenation of the Swiss mechanical industry we tend to think only of them and their fortunes, or losses.

Different markets could have quite different sales for brands too. If you read watch reviews from say 1940/1950's America, lots of American brands figure and quite a few Swiss brands don't. Rolex an obvious and surprising one. Pretty much nowhere to be seen in the US market until the mid 1960's. They were more a British commonwealth brand. There's a reason why 60's Daytonas are thin on the ground, they just didn't sell very many. Heuer another brand that sold very little into that market. In some years if they sold 50 they were lucky. Omega were in the market alright, but at nowhere near the brand recognition of today. Brands like LeCoultre, Longines were much more popular.

The vintage side of the market is really a modern phenomenon. Pre say 1990 it barely existed at all as a hobby. The rebranding and rejuvenation of the mechanical watch drove its wider appeal , but even then it was small fry. The internet drove it and it really started to climb from the mid 2000's onwards, with auction houses catching on(and the Swiss seeing it as way to add even more "authenticity" into the mix).