Forecasting what will happen to the watch industry this year is complicated by the current levels of omicron infection across the globe, but some trends are decoupled from the pandemic, and a long term shortage of unicorn watches from the likes of Rolex, Audemars Piguet and Patek Philippe looks certain to continue suggests Danny Shahid, CEO of London-based watch trading company DWL.
The luxury watch sector simply cannot make enough watches right now to satisfy demand.
This is partly due to the difficulty of increasing supply with so many people off sick and a global shortage of skilled watchmakers, but the current imbalance is not new, it has been the case for the past five years for models like the Royal Oak, Daytona and Nautilus.
What is new is the ever-growing list of references that are now selling on the secondary market for over official retail prices.
Over retail prices means everybody piles in, making shortages even worse.
This situation is not likely to end any time soon.
What other trends might we see this year?
Watch aficionado Danny Shahid, whose operates out of his DWL boutique in London, predicts where the market is heading in 2022.
A trend that will undoubtedly continue this year is the brands and public’s love of green and blue dials, with the Patek Philippe Nautilus green dial variant and latest Tiffany blue collaboration attracting significant attention.
For Rolex, Audemars Piguet, Patek and other investment-grade brands, this trend will likely spill over into other bright dials such as reds and yellows as customers and collectors seek out watches with a bold look.
Green and blue dials will continue to dominate the market and command the highest prices, experiencing the longest waiting lists at retail.
However, brands including H. Moser & Cie, Oris and others are expanding their repertoire with red dial variants.
Established collections including the Rolex Oyster Perpetual are helping to put eyes on red as a dial color that is fresh and rather underrepresented on the market at the moment.
One of the most likely trends to continue is the frustratingly low supply, relative to demand, that has gripped the watchmaking world since late 2016.
With supply chain shortages and now the ongoing pandemic disrupting watchmakers’ production output and delivery schedules, it is safe to assume the global supply of high-end luxury watches at retail will remain low, with demand likely to continue its ascent skywards.
We can therefore comfortably predict that the price of watches will continue to increase this year with very few brands, if any, experiencing depreciation.
With supply so low at retail, it is very unlikely that brands or authorized dealers will provide discounts.
In turn, prices on the secondary market for watches are likely to exceed current values.
For investment-grade watches with established secondary markets such as Rolex, Richard Mille, Audemars Piguet, Patek Philippe and also low-production independent brands, it is difficult to see anything but rampant appreciation.
Price consolidation at current levels is the best hope for new market entrants, although this is unlikely.
Watchmakers are becoming increasingly willing to collaborate with the watch media, retailers, celebrities, artists and even other watchmakers.
This is likely to continue as brands seek to leverage their combined brand equity and, historically, collaborations have been vital to the industry’s development.
With the recent media hype regarding Patek Philippe x Tiffany & Co. Nautilus, more significant partnerships are likely to emerge this year.
Modern collaboration pieces will continue to fetch hefty premiums on the secondary market and vintage, and even neo-vintage, collaboration pieces will see healthy levels of appreciation.
Models likely to yield good returns include the Rolex Domino’s Pizza Air-Kings, Royal Family-signed dials and retailer-signed timepieces.
About the author
Danny Shahid’s flagship DWL shop is in Mayfair’s Burlington Arcade. For more information, please visit www.diamondwatcheslondon.com and to find out more about Danny Shahid, follow @excellencebydanny on Instagram.