News & Drops
It seems the media embargo is up, with seemingly dozens of publications publishing their Apple Watch Series 5 review today (The Verge and Hodinkee being perhaps the best). But, I always look to Jonathan Gruber’s Daring Fireball for the best and hottest Apple takes. He’s particularly adept at explaining his experiences with the Apple Watch from the perspective of a self-professed watch lover. He’s talked about his love affair with his Rolex Submariner before, explaining that, even as an Apple fanboy, he prefers analog watches. Read More
Over at Horolonomics, Economics Professor Brendan Cunningham offers perspectives on the watch industry that only an economics professor could. This time, he’s taken on the “watch safety net,” proceeding to answer the question of why so many of the rich and famous (especially those engaged in dubious affairs) seem drawn to parking significant sums of money in luxury timepieces. Read More
While there’s plenty of places in Chicago to go shopping for watches (see my list here), there’d always been a certain lack of brand boutiques that meant Chicago could never compete with cities like New York, London, or even Miami or Los Angeles as a watch shopping destination. In almost an instant, that’s changed, with the opening of three boutiques from Richemont’s stable of brands.
IWC, Panerai, and A. Lange and Sohne have all announced the opening of brand boutiques at 11 E Walton Street, in the Waldorf Astoria hotel. Read More
This is our first partnership post, from our friends over at NOMOS Watch Club. We’re always looking for fun and interesting partnerships, so if you’re interested, please reach out.
Our friend Christopher over at NOMOS Watch Club recently paid a visit to Berlinerblau, the Berlin-based in-house design and marketing firm of Nomos Glashutte. Berlinerblau is home to about 40 Nomos employees, all of whom are singularly focused on created the “Nomos look”, perhaps the finest modern execution of the Bauhaus aesthetic, in watches or elsewhere.
Christopher sat down for an interview with Nomos product designer Thomas Höhnel, who provided some insights on the watch design process, working at Nomos, and the future of the Glashutte watchmaker. Read More
Swatch Group reported sales of 4.1 billion Swiss francs (CHF) for the first half of 2019, down 3.7% compared to the year previous. Meanwhile, net income of CHF 415 million was down 11.3% compared to the previous year, while net margin also shrank slightly.
As I covered in the Swiss watch exports report last week, the Hong Kong market saw significant declines due to political turmoil, which Swatch Group was not immune from, though it did report growth in all price segments its other major markets (U.S., mainland China, Japan). I highlight the “all price segments” language because the Swiss watch industry as a whole has experience a continued decline in sales in the low- and mid-price segments. It’s interesting that Swatch is reporting growth in all of these price segments in these major markets, showing that there is not just demand for high-end luxury timepieces, at least in the major markets. Read More
Swiss watch exports dropped 10.7% in June 2019 compared to the year previous, totaling 1.7 billion Swiss francs (CHF) for the month. Units sold was down 17%. The first half of 2019 ends with an increase of 1.4% over the previous year, with total exports at over CHF 10 billion. It’s a slow down from the first quarter, when exports were up 2.9%.
In short, the story of June was a few less purchases of high-value precious metal (or two-tone) watches that allow the industry to report top line growth while in reality much of the market outside of the high end is struggling. Read More
Luxury online consigner The RealReal (TRR) has gone public on the Nasdaq, raising $300 million in an initial public offering, valuing the company at $1.6 billion. The IPO comes just days after sneaker marketplace StockX raised a new round of funding at a $1 billion valuation. and brought in a grown up to be the new CEO (sorry, backwards hat guy). The pre-owned, used, retail, whatever you want to call it space is heating up, and investors have been taking notice.
The RealReal, along with Poshmark and Thred Up, are the leading players in the resale sector. TRR offers a diverse selection of luxury items, including clothing, jewelry, art, home goods, and yes, watches. The company, founded in 2011, seeks to separate itself by authenticating every item that it consigns on its site. To consign goods on the site, you schedule an appointment with one of their authenticators, who checks out your goods and makes sure they’re legit. Read More
Exports in the Swiss watchmaking rose 11.4% in May to just over 2 billion Swiss francs (CHF). Much of the increase was driven by the “other products” category, which is so often ignored — it was up 62% year-over-year — apparently people bought a lot of alarm clocks and small clocks last month. Growth in wristwatches was up 8.6% in terms of Swiss francs, but down 9% in terms of units sold. This continues the trend to selling fewer, higher-priced precious metal and two-tone watches.
The numbers are a positive rebound for the industry after it saw exports drop 0.4% in April; this was after exports grew a steady 2.9% in the first quarter of 2019. Read More
Just for Fun
Lately, I’ve noticed that there seems to be a real lack of watch auction coverage around the internet. When I wrote my preview of Christie’s spring 2019 auction, there wasn’t much else out there covering the offerings at Christies, or the competing spring auctions from the other large auction houses, namely Sotheby’s and Phillips (I even tried to cover Antiquorum’s auction in our weekly newsletter because it seemed like no one else was). Sure, the sale of Andy Warhol’s Rolex garnered some headlines, but that’s little more than clickbait.
Say what you want about watch auctions, but they still bring some much-needed transparency to the market, help identify and define trends, and help advance scholarship, especially on rare and unique watches. And on a selfish level, learning about watches up for auction forces me to take the time to understand these new pieces and argue why one is worth highlighting in an article over another.
So, I’ll be making a concerted effort over the rest of the year to cover all the watch auctions I have time for. The first step in this is gathering up all the auctions from the various houses to make sure they’re on my radar for the second half of 2019 Read More
Probably the most important question about a watch is its provenance. Where did it come from, and can you prove that it came from where you say it did? For centuries, this has meant having a watch’s “box and papers” to sell alongside the timepiece itself. These box and papers are thought to provide proof that the watch is legitimate, and that the buyer can proceed with confidence.
In reality, there’s not a full-proof way to be sure that the box and papers being offered alongside the watch are legit. These papers can be forged, faked, or tampered with, and with the money to be made in vintage watches, the motivation certainly exists.
Vacheron Constantin is hoping to use blockchain technology to chain that. A blockchain, by design, is an open, distributed ledger that can record a transaction between two parties in a verifiable and permanent way. Read More
Shares in Britain’s biggest watch retailer Watches of Switzerland Group Ltd rose by as much as 15% on their debut on the London Stock Exchange on Thursday. Shares climbed to as high as 315 pence per share, from an initial price of 270 pence. On its second day of trading, May 31, shares stabilized a bit, closing the day at 308 pence.
The listing of 34% of the company was set to raise around 220 million pounds ($278 million), valuing the retailer at 647 million pounds. The 270 pence initial price was already at the top end of the range initially targeted for the deal, suggesting strong demand for the retailer which accounted for half of all Rolex watches sold in the UK in 2018, in addition to being the UK’s largest retailed of Patek Phillipe, Cartier, Omega, TAG Heuer, and Breitling. Read More
After a strong first quarter of 2019, Swiss watch exports slowed in April, down 0.4% compared to April 2018. It’s a dose of reality for the industry, after exports grew a total of 2.9% throughout the first quarter. April’s low sales bring growth through 2019’s first four months down to 2.1%.
The total value of exports in April was still higher than that in March, but growth was down because of a strong comparison base to April 2018. The trend toward precious metals and two-tone (gold-steel) timepieces continued, with the categories up 4% and 5.2%, respectively. Read More
At Swatch’s annual general meeting a couple weeks back, Swatch Group CEO Nick Hayek teased that the company would be opening a drive-through store for its namesake Swatch products in the next few weeks. The shop will be located next to the company’s headquarters in Biel, Switzerland, a town of about 55,000. It’ll be just across the street from the Omega Museum and nearby Omega boutique, surely serving mainly as a tourist attraction.
This little drive through experiment seems to indicate that Swatch still sees brick-and-mortar shops as a key part of its future, an assessment I agree with. In fact, Richemont reported in its earnings that it saw solid bricks-and-mortar retail growth, with a net positive number of stores opening. Interestingly, Richemont seemed to emphasize the growth of its directly-owned stores (as opposed to franchise stores). I’d bet Swatch’s strategy is similar. No matter if it’s selling online or in bricks-and-mortar shops, cutting out the middleman is the name of the game today. Read More
Shares of luxury goods group Richemont closed higher on Friday as it announced strong sales growth amid weaker profitability in its 2019 fiscal year, which ended March 31.
Last year, Richemont purchased online pre-owned watch retailer Watchfinder, as well as online luxury destination Yoox Net-a-Porter. It also recently announced a joint venture with ecommerce giant Alibaba, though it continued to provide few details on that arrangement on its earnings call. With the acquisition of the online retailers, 16% of Richemont’s sales are now online.
Total watches sales in 2019 reached €5 billion. Read More
Less than a week after rival luxury conglomerate LVMH posted a strong first quarter of 2019, sending the stock to record highs, Kering barely matched expectations. Kering shares fell 6 percent on Thursday after signs of slowing growth from the Q1 earnings. And while watches and jewelry aren’t a large part of Kering’s business, the group’s earnings may point towards the general trend of slowed growth in luxury goods. Read More
Swiss watch exports had their strongest month of 2019 in March, growing at 4.4% with a value of 1.7 billion Swiss francs (CHF) for the month. Total exports for the first quarter of 2019 totaled CHF 5.1 billion, a 2.9% increase over the first quarter of 2018. The total value of exports was significantly boosted by a steep rise in precious metal and bimetal watch exports. Read More
It’s not every day that the fashion and legal worlds truly collide, but that’s what happened yesterday when the Supreme Court heard oral arguments in Iancu v. Brunetti. The case involves California skate/steetwear brand “Fuct.” So as a lawyer, I had to write about it. Fuct, founded by Erik Brunetti in 1990, has been a fixture of skate and streetwear culture since its founding. Brunetti’s lawyer, John Sommer, who also happens to be general counsel at Stussy, promised that any references to “vulgar terms” would not be necessary during his oral argument, or if necessary, “the discussion will be purely clinical, such as when medical terms are discussed.” Read More
Moet Hennessy Louis Vuitton (LVMH) shares hit record highs after announcing strong earnings on April 11. In the first quarter of 2019, LVMH’s revenue rose 16 percent to 12.5 billion euros ($14 billion). Revenues were up 11 percent on an organic basis, which takes into account mergers, acquisitions, and currency fluctuations. Both numbers surpassed analyst forecasts. Read More
In a decision in Swiss court that can’t be surprising, Swatch prevailed over Apple in a long-running dispute over Swatch’s “Tick Different” watches. The watches are no doubt a direct reference to Apple’s Think Different ad campaigns from the 1990s and 2000s. The Swiss Federal Administrative Court said Apple’s slogan was not well enough known in Switzerland to warrant protection. Read More
Reporting from Baselworld, Reuters quoted a number of watch industry executives who said they expect to continue to see strong growth in 2019. This is despite a slow start to 2019 in which Swiss watch exports have risen just 2.1 percent in the first two months of the year. In 2018, Swiss watch exports rose 6.3 percent. Read More