Nobody asked, but the luxury watch market is doing just fine. Valued at nearly $24 billion globally in 2020, it’s expected to grow at a compounded annual rate of 3.25 percent through 2026. Those aren’t Amazon or Wal-Mart numbers, but they’re not bad, especially in an industry besieged by smart watches and other digital competitors.
Still, there’s a lot the industry could do to accelerate growth. I was thinking about this recently while reading the history of the Patek Philippe Nautilus model, an iconic watch designed by Gerald Genta in the mid-70s. At that time, the watch industry was under assault by the rise of quartz movements, which powered cheap, reliable watches that kept precise time. And all you had to do was change the battery once a year. In response, Genta designed the famous Royal Oak for Audemars Piguet, which was bolder and sexier than standard watch design at the time. He then moved to Patek Philippe, where he famously designed the Nautilus on the back of a napkin at an industry convention. You can make the argument that these designs helped kick-start an industry that otherwise might have withered away.
The rest, as they say, is history. Today, a stainless steel Nautilus sells at retail for around $32,000. But try getting one. The supply is so limited that pre-owned models are fetching more than $100,000. Shark Tank’s Kevin Leary waited 8 years to get one from a dealer and practically climaxed when he received it, which you can watch here. My Scottish grandfather would have one word to describe the economics of this market: daft.
It’s hard to give a rational explanation for a market that is driven by equal parts of obsession, passion, and compulsion. It’s best described by the phrase that J.E. Lawrence originated in the Nebraska State Journal in 1949: “It is what it is.”
The market is fetching these prices, of course, because of scarcity. As demand increases, watchmakers keep the supply low, ensuring higher prices. Patek president Thierry Stern understands this. When asked recently if the company might increase production of the Nautilus to satisfy demand, he basically responded, “Why would I do that?”
But this ain’t a sustainable model. Over time, limiting production to inflate prices will drive buyers away from the brand. I mean, who wants to go talk to the snob at the party who never listens to you and with whom you have nothing in common?
To stay relevant and keep in touch with a wider market, watchmakers need to be a little more realistic and occasionally show empathy with buyers. One of the best ways to do that is by opening up their design vaults and doing expanded production runs of legacy models — at more approachable prices.
To paraphrase Henny Youngman, take Rolex. This is a smart company, dating back to 1908, that is a case study in brand management. Rolex founder Hans Wildorf realized in the 1940s that his watches were becoming out-of-reach for the mass market and he created a new brand, Tudor, to produce more of an entry-level watch with the same reliability as a Rolex. Partly inspired by Tudor’s success in releasing modern versions of legacy watches, other brands started to do the same. Breitling, Longines, Oris and Seiko have all been on a tear recently, launching mass-produced, modern versions of classic old watches from their vaults.
Rolex should do the same. OK, let’s say it can put a moat around the Paul Newman Daytona model, limiting production and pushing up prices on the secondary market to $25,000 and above. We’ll give ‘em that one; they earned it. But if Rolex wants to retain old customers and win new ones, the company should unbutton its collar, pour a martini and revive the following legacy models — all in stainless steel, all in large (though limited) production runs, and all at an approachable price. (BTW Rolex, you can send samples to me and I’ll be happy write about them!)
THE CUSHION CASE
In the 1920s, Rolex revolutionized the watch world by creating a waterproof model it dubbed the “Oyster.” It was arguably the world’s first “tool” watch because it could be worn in more robust conditions. The early Oyster models were designed with a cushion case, a more-or-less square case with rounded, tapering edges. Rolex movements powered early Panerai models that were famously defined by a cushion case and it’s now a standard design element across many different brands. But reviving some of these early Rolex models, in a larger format (e.g. 40mm), would reclaim a vital piece of Rolex history. Plus, they’re gorgeous.
In the 1970s, Rolex contracted with the British military to produce a watch for everyday use. It was a version of the hard-working Submariner with slight changes, such as the minute marks that are continued all the way around the bezel. It’s a good reminder of the sanctioned ability of Rolex watches to operate in extreme conditions (such as Omega’s Speedmaster, the legendary “Moon Watch,” designated as the official watch of NASA). It would also be cool to come out with a version of very early Submariners, such as Ref. 6200 from the 50s that used the Explorer 3-6-9 dial layout.
This is a legendary model from 1950 — a triple calendar and a moon phase function, with stars for indices and sword hands. The version here was made from yellow gold, which developed heavy patina over the years and earned this piece the nickname “Dark Star.” The revival of course would have faux patina on steel, but don’t lose the man in the moon!
THE “SPLIT SECONDS”
This piece is extremely rare. Dating back to 1942, only 12 pieces were made for racing team owners and drivers that Rolex sponsored at the time. A split-second chronograph, as everyone knows, allows the user to time two different events simultaneously, such as the time of a lap and the time of the overall race. The original version was 44mm at the time, so no need to enlarge the new model! Caveat: the split-second movement may be even more complicated than a minute repeater or a tourbillon, so it might be difficult to make the prices of this model “approachable.”
THE “MONTY PYTHON” (AND NOW FOR SOMETHING COMPLETELY DIFFERENT)
Back in the day (the 1920s) Rolex was still a regional brand and sometimes it allowed its watches to be cobranded with more well-known local brands. Serpico and Laino was a leading watch retailer in Caracas, Venezuela in the 20s so to reach that market, which was quite affluent at the time (oil money), Rolex allowed them to add their stamp to the dial. This Oyster is a very rare Art Deco style that Rolex used for a short time. But it was used to great effect. This piece has so many elements going on yet still retains such an elegant simplicity. It evokes a different time, almost a different universe.
So come on, Rolex, let’s shake up a second martini and talk about release dates. Your customers will love you for it!