As Demand Declines, Watch Prices Continue to Rise

New York Times

12-02-2025

The ball had barely dropped in Times Square when Rolex kicked off the new year with price hikes.
In the first days of January, watch industry news was dominated by the fact that prices on Rolex's 2025 list were up by as much as 18 percent, with precious metal timepieces leading the surge.
But there was a larger reality. In 2024, Switzerland's watch exports fell far below the lowest levels of the past two decades (pandemic years aside), pushing the industry to rely heavily on ultraluxury timepieces to make up some of the lost revenue.
And that reliance has produced a landscape in which rising prices have become to the watch industry what death and taxes are to life: inevitable.
'The industry has opened up to more competition, something you can see at the G.P.H.G. where many awards are handed out to brands that are not Swiss,' said Karine Szegedi, a partner at Deloitte who specializes in the watch industry. (She was referring to Le Grand Prix d'Horlogerie de Genève, the annual watch industry awards event). 'For the Swiss watch industry to be credible and have a future, watch brands are playing in the territory of high-end watches.'
According to figures from the Federation of the Swiss Watch Industry, export values fell by 2.8 percent in 2024, to 25.99 billion Swiss francs (or $28.5 billion), while the number of watches exported fell to 15.33 million, 9 percent less than the 2023 total.
Oliver Müller, the founder of the Swiss watch consultancy LuxeConsult, agreed that competition from overseas manufacturers had bit into Swiss watch exports, but he added that they also had been affected by smartwatch sales and the younger generations' lack of interest in traditional watches.
'In two decades, the industry has steadily increased its average selling prices in order to offset the lost volumes,' he said. 'At the same time, it has moved further into niche territory.'
What did he mean by niche? 'A good comparison is with the auto industry,' he said. 'What would happen to the industrial fabric if the auto industry focused solely on producing Porsches and Ferraris?'
Ms. Szegedi observed that the industry also faced risks beyond its balance sheets. 'They need steady production to keep their pricing, expertise and experience intact,' she said. 'You can't train a watchmaker in just six months; it takes a decade to become an enameler.'
Industry costs also have continued to rise, boosted by a strong Swiss currency, the expense of producing watches in Switzerland and the all-time high value of precious metals. Gold, for example, was $2,777.40 per ounce on Jan. 25; for comparison, its highest price in 2011 was $1,922 per ounce.
'In this context,' Mr. Müller said, 'watch brands have two options: absorb the higher production costs by reducing margins or raise prices.'
But the trend has some analysts wondering if there may be other ways to boost sales and sustain the industry.
A New Line
In October, Patek Philippe chose to introduce its new sporty wristwatch model, the Cubitus, with a higher price than a comparable predecessor, the Nautilus.
At the introduction in Munich, Patek's president, Thierry Stern, expressed confidence that clients would accept the Cubitus Ref. 5821/1A version in stainless steel at 35,000 Swiss francs — even though that was 30 percent more than the price of the Nautilus Ref. 5711/1A when it was discontinued in 2021.
'We set 35,000 francs as an entry-level price,' Mr. Stern said. 'It's a big number, but for Patek Philippe, it is not out of place.'
Mr. Müller said the strategy was a considered approach. 'Raising prices when launching a new product line allows a brand to keep production volumes steady while justifying higher retail prices with the 'newness' of the collection,' he said.
At the LVMH Watch Week presentations last month in New York and Paris, Hublot unveiled the new Big Bang Tourbillon Automatic Green Saxem, an 18-piece limited-edition model at $231,000, almost twice the $121,000 cost of the Big Bang Unico Green Saxem, a 100-piece limited edition chronograph introduced last year.(The word 'Saxem' stands for sapphire aluminum oxide and rare earth mineral, an alloy of aluminum oxide, which is a raw material resembling synthetic sapphire developed by Hublot.)
'The new price reflects the difficulty in developing Saxem and in producing a clean block in an intense emerald green color,' said Raphael Nussbaumer, Hublot's chief product and purchasing officer.
The brand's annual production is 50,000 watches. 'Twenty-five to 30 percent of our watches are limited editions intended for specific clients,' Mr. Nussbaumer said. 'Those clients expect innovative products and are prepared to pay for the uniqueness of the models.'
Long-Term Strategy
Since establishing its watchmaking studio in 1987, Chanel has steadily enhanced its watchmaking expertise, beginning in 1993 with the acquisition of the G&F Châtelain Manufacture in La Chaux-de-Fonds, Switzerland.
According to Morgan Stanley's annual report on the watch industry, the fashion house is estimated to produce 75,000 watches per year with sales of 400 million Swiss francs, thanks in part to leveraging the capabilities of specialists it has invested in, including the movement supplier Kenissi and watchmakers such as Romain Gautier and F.P. Journe. Its latest move, announced in August, was to acquire a 25 percent stake in MB&F, the independent brand created by Maximilian Büsser.
At the time, Frédéric Grangié, the president of Chanel Watches & Jewelry, said in an interview with the French daily newspaper Le Figaro: 'This announcement is part of our long-term strategy to continue preserving, developing and investing in specialized skills and expertise, reaffirming our position in high-end watchmaking.'
The strategy seems to be bearing fruit. Working with Les Cadraniers de Genève, a dial maker owned by F.P. Journe, Chanel produced a one-off 37-millimeter Chanel Boy.Friend wristwatch in stainless steel with a diamond-set bezel and an enameled dial featuring an image of a bejeweled Coco Chanel. It sold at a charity auction in December in New York for $220,250. For comparison, a 34.6-millimeter diamond-set Boy.Friend in steel is $10,350 on Chanel's website.
'Chanel invests in métiers d'art and mechanical innovation because watchmaking, like high jewelry, continues to integrate highly innovative expertise,' said Corentin Quideau, an independent consultant and global jewelry brand strategist in Paris.
'Watchmaking at Chanel, like its haute couture division, operates as a structured niche,' he said. 'It is an established division, designed not to create the occasional special piece for a one-off client, but to produce exceptional products as a purposeful and strategic direction.'
Leveraging Expertise
Since 2023, Louis Vuitton has elevated its own watch offerings with sophisticated timepieces at higher price points. 'We want to value the savoir-faire of all our artisans throughout our collections,' Jean Arnault, the company's director of watches, told The Times in 2023, when it introduced its revamped Tambour, starting at $18,000.
This year, a new model, the Louis Vuitton Tambour Convergence, powered by the new in-house automatic Caliber LFT MA01.01, was offered at significantly higher prices: the pink gold version at $33,500, and the platinum with diamonds at $60,500.
Louis Vuitton has leveraged the technical expertise of La Fabrique du Temps, its watch design and production operation, to support two brands it has revived: Gerald Genta and Daniel Roth. Watches they introduced in 2023 were priced at six figures, with a Roth model starting at 140,000 francs and Genta's Mickey Mouse for the Only Watch charity auction at 170,000 francs.
Seasoned collectors familiar with the luxury watch market may be accustomed to price fluctuations as part of the evolution of the market, and less sensitive to price hikes or factors like rarity, craftsmanship and brand value that usually drive up prices. But newer entrants to the industry are far more likely to feel their impact.
'It's very well to make expensive watches but we shouldn't forget about entry level clients and younger, aspirational collectors,' said Edouard Meylan, the chief executive of H. Moser & Cie, in a video interview from its headquarters in Neuhausen am Rheinfall, Switzerland. 'They are the future of our industry.'
In October, Moser introduced the Pioneer Retrograde Seconds, a model featuring a distinctive complication that measures 30 seconds before snapping back to its starting position. At 19,900 francs, the model was deliberately priced less than Moser's retail average of 40,000 francs, he said.
'The Pioneer Retrograde offers interesting value at a more accessible price point,' Mr. Meylan said. 'Sure, 20,000 francs is a lot of money, but not for a complicated piece made by an independent Swiss brand.'
But the allure of independent brands alone cannot lessen the threats to the Swiss watch industry.
'The production of all the Swiss independents combined is only about 2 percent of the industry's volumes,' Mr. Müller said. 'What we need is to rethink the way we sell our watches.'