Rolex prices rose by 0.33% in August, according to the Bloomberg Subdial Watch Index, which tracks the top 50 most traded watch references.
Meanwhile, California-based Watchcharts reports that Rolex prices fell by 0.8% last month in a gloomy trading update.
Both use similar methodologies for their price tracking indexes: they ‘scrape’ data from a number of marketplaces around the world for advertised prices, then apply additional algorithms designed to get their figures as close as possible to actual prices when a watch is sold (advertised prices are almost always higher than sold prices).
One difference is that Subdial is a UK-based business specialising in trading luxury watches while Watchcharts is a subscription-based data business with no interest in trading timepieces.
Widening the field of vision beyond just Rolex, the Bloomberg Subdial and Watchcharts indexes again disagree.
Subdial says prices for its tracker rose by 1% in August. Watcharts registered its largest monthly drop so far this year in August, losing 1.0% of its value.
This is the first time Watchchart’s index has lost more than 1% of its value in a single calendar month since November 2023.
So, who is right?
My money is on Watchcharts’ more gloomy report being closest to the mark.
Second hand watch dealers I have spoken to in both the UK and USA have said the market has changed beyond recognition since the giddy heights of 2022 and is heading towards a point where very few watches sell for above their retail price and there is deep discounting for less popular models that never traded at a premium.
If correct, there is still a significant distance to go before prices find a floor.
Speculators who thought they could make a killing in the boom times have all-but vanished from the market, leaving a more discerning customer base where collectors are buying and selling more than five years ago, but they are much more discerning about what they buy and more knowledgeable about prices, which makes it more difficult for professional traders to maintain profit margins, particularly when prices continue to fall.
So, demand is dampened by fewer and less active customers at the same time supply on the secondary market has never been higher. It is a classic buyers’ market, and sellers holding large amounts of stock are suffering.
We have been here before. In fact, it is entirely normal during challenging economic times.
Ten years’ ago, every watch bar the odd Daytona or Richard Mille was selling second hand at a discount to its retail price.
In fact, most could be bought brand new at a discount from an authorised dealer with a bit of negotiation.
If we are not there already, we will be over the coming year.
And there is a danger things will get significantly tougher if new watch manufacturing does not slow down faster than appears to be the case when I look at Swiss watch export figures.