Last week I was on a business trip to Dubai, Rob Corder writes, and it gave me a chance to check out how far and wide shortages of luxury Swiss watches have spread.
The answer, interestingly, is not very far at all.
Recent financial reports from the likes of Swatch Group, Richemont and LVMH have described how production was hit in 2020 by covid restrictions.
This has been used by marketeers to suggest there are shortages of watches far beyond the usual suspects of Rolex’s steel sports watches, Patek Philippe’s Nautilus and Audemars Piguet’s Royal Oak.
The reason marketeers like this narrative is because it nudges people towards buying now rather than later when shortages may be even more acute.
There is much to unpack here.
First, it is true that lost production has cleared up the channel to some extent.
However, rather than creating shortages, for most brands, and particularly for core collections from big players like Omega, Cartier and TAG Heuer, production cuts have merely led to less over-supply, which has been helpful to retailers.
Secondly, brands have created artificial shortages. They make limited editions and they often only sell them through their own boutiques so the watches appear to be hard to find.
In reality, there is no significant supply shortage for 99% of watch brands, there is just an unusually healthy alignment between supply and demand.
And another thing
One final thought. Dubai airport had dozens of brands represented, but only the Rolex cabinets were empty. Specifically, there were three watches on sale from five large Rolex cabinets while most other brands had one cabinet each, all filled with watches.
This is far worse than a year or two ago when there would at least have been Rolex watches on sale in precious metals, particularly diamond-studded ladies’ pieces.
What is happening now (and this is happening all over the world, not just in Dubai), is that dealers will only sell the most popular watches to people who also buy the least popular models from Rolex or other brands or expensive jewellery.
Oftentimes flippers are doing this in one go, spending six- or seven-figure sums on bundles of watches that include pieces on which they can instantly double their money.
The ladies’ DateJusts and Day Dates are swept into these bundles even though there is no profit in them, and that is why you do not even see these watches for sale anymore.