Market Update: Luxury Watch Market Makes A Powerful Rebound; Rolex, Cartier Watches, Audemars Piguet Take The Biggest Games Home
If you keep yourself even remotely updated about the luxury watch business, in the last couple of days your conversations and social media feeds have most likely been saturated with ‘Morgan Stanley’, ‘Rolex’, or even ‘8 Billion CHF’.
If a friend has gone as far as to yell in excitement, “the Swiss luxury watch market is back with a bang” and you are yet to catch up, let’s quickly help you share that excitement.
What’s The Hype About? – Morgan Stanley’s Annual Watch Sector Report
Each year, the financial services mogul, Morgan Stanley publishes an annual watch sector report. The report is not only one of the most respected but also highly anticipated ones by the global watch industry.
This year, Morgan Stanley published the report in collaboration with LuxeConsult, popular advisors to the Swiss watch industry. The report titled ‘King Rolex’ has, to put it mildly, caused a stir in the luxury watch sector, announcing the brand’s unprecedented revenue inflation since its recorded history.
After a rather demoralizing run in 2020, this report, along with the export statistics provided by the Federation of the Swiss Watch Industry, has provided a welcome relief to the investors and collectors in the luxury watch industry.
Exports of Swiss luxury watches are up by about 31% since the dip in 2020 and 2.7% higher than the pre-pandemic era in 2019. All in all, the luxury watch sector has regained its bearings and has set itself up for accelerated growth.
What Do The Numbers Mean? – Rolex Keeps Winning, Audemars Piguet Gives Patek Philippe A Run For Its Money
Rolex, with a turnover of about 8B CHF in 2021, has managed to keep its crown with an expanded market share of 28.8 %. This is as much as the next five brands combined!
Rolex is only the first of the five major brands which also include Cartier Watches, Omega, Audemars Piguet, and Longines that make up more than 50% of the total market share.
What this basically means is that the buyer behaviour favours favouritism in the luxury watch business. A handful of brands, despite increasing prices and fluctuating sales, are attracting more profitable purchases than the entire rest of the industry’s cumulative.
It’s interesting to note here that two major brands – Cartier Watches and Audemars Piguet – have managed to dislodge years of established supremacy of Omega and Patek Philippe respectively.
Nevertheless, Rolex, Audemars Piguet, Patek Philippe and Richard Mille are named as the biggest winners, not only because of their weights in the market polarization but also because of their phenomenal distribution of margins. These brands may record 41% of the total market share in sales, but their operating margins sum up to a whopping 62%, making them almost unbeatable in terms of profits.
Big boys aside, independent brands like F.P. Journe, Greubel Forsey, Voutilainen, MB&F, and Laurent Ferrier are also outperforming themselves in the new, pre-owned, as well as grey market segments.
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