The record, as it stands, is approximately four and a half minutes. That’s the amount of time a collector—just introduced by telephone—took to ask me if I, or anyone else I knew, could help him secure a 5711. The experience, which feels not unlike being hit on, is a sign of the times. Collectors’ appetites have been whipped up by a small handful of “it” models—like Patek Philippe’s 5711 Nautilus—and without any mores to regulate the frenzy, well, why not skip the foreplay?
The exchange, like so many things in the watch world, was primarily (but not completely) engineered in Switzerland. For years the financial performance of new watches was an issue that simmered out of sight among a far less interconnected community of collectors. Manufacturers could mask the effects of supply and demand by dumping unwanted product in foreign markets and lay issues like discounting at the feet of retailers they labeled as unscrupulous. One can imagine their horror two years ago as the oversupply of watches from shrinking markets in Russia and China played out like a low-speed train wreck on trading sites like jomashop.com where discounts fluctuated live like a 1929 ticker tape.
This is the background to many months of extraordinary activity in the watch industry. Over the last 18 months, we have seen massive traffic and record price increases in vintage watches, and a similar jump in new initiatives and sales in the pre-owned market. All of a sudden, value retention has become the defining issue across a broad swathe of the watch-buying public. It’s bad news for companies that were once content to imply that their watches were an investment without ever having to demonstrate performance.
The ones that can, such as Patek Philippe and Rolex, have been quick to seize the initiative by exerting ironclad control over their production and distribution in ways the group-owned brands cannot. In visiting the highly restricted inner sanctum of Rolex’s New York office late last year, one authorized dealer (who requested anonymity) was struck by the levels of stock in the company’s Kardex storage, which were the lowest he had ever seen. With demand spiking thanks to the auction of the Paul Newman Daytona, and a number of well-planned and relevant product refreshes, the company is keeping an astute and firm hand on the tap.
Thus, certain companies are the authors of the “it” watch phenomenon. The movement has gained traction as pecuniary-minded collectors (along with quite a few dealers) learn that hunting down these pieces is not only profitable but also fun, in a punishing sort of way. Rather than give your gains to some grinning auctioneer, why not experience a little thrill of the chase in pursuing these hard-to-get models? It’s a new twist on an age-old collector’s psychology, with all the spoils shareable on Instagram.
The reality, of course, is not quite so easy. Authorized dealers, who now have to vet an enormous number of calls from around the country, are directing almost all of these pieces to strategic customers. The few pieces that do make it into other channels, you can be sure, are fully marked up.
Many of the watch companies offer muted complaints about the difficulties the extra demand has imposed on their networks while doing nothing to change the market conditions that imposed them. And why should they? The added prestige is something every watch executive team will soon be required to produce. And since it appeals to our very basic emotions, this little mutation to our culture is likely to be with us a long time.