Rolex and Patek Philippe shortages push customers further upmarket

Rolex at Laings

A shortage of steel sport watches from Rolex and Patek in the States has given retail sales of precious-metal watches a huge boost in the first half of this year.

In an article posted by Hodinkee, using information provided by the NPD Group, data showed that sales of gold watches rose by 19% in value over the same period on the year before while sales of two-tone watches jumped 18% and platinum by 33%.

Reginald Brack, NPD’s watch and luxusry industry analyst, told Hodinkee: “The higher end is doing well. We’re reporting that U.S. sales for watches above $1,000 are up 13% year-to-date in value. This is primarily due to men’s watches with MSRPs [manufacturer’s suggested retail prices] above $3,000. That segment is up 16%.”

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However, it is not only men’s watches that have shown this growth. Watch sales in the women’s sector with MSRPs of $5,000 and above also increased by 16% in the first six month of 2019.

To gather the data, NPD collects point of sale data from thousands of retail stores in the US.

Asked by Hodinkee about the jump in gold-watch sales, Brack said: “The shortage of many steel models has had a positive impact on precious-metal models. We’re seeing a continued demand for steel sport models from many of the leading luxury watch brands, which can’t keep production at a high enough level to meet overwhelming consumer interest.”

Adding: “Speaking with retailers of certain brands, they verify that, when consumers are frustrated and can’t find the steel sport model [they want], and it’s nowhere on the horizon, they many times gravitate to precious metal. So, the shortage of steel models helped to benefit precious metal. It’s not the only factor making gold and two-tone perform well, but it is definitely a factor.”

The watch site went on to report how the trend reinforces the continued Rolex and Patek Philippe dominance.

An NPD estimate in 2018 detailed how the brands account for a 70% dollar share in the $10,000 plus price segment and in an era when watch brands are shifting to direct-to-consumer distribution models via e-commerce and brand boutiques, Rolex and Patek continue to rely entirely on a traditional wholesale network of retail partners in the U.S.

NPD’s sell-out data confirms Swiss watch industry sell-in data indicating that the U.S. is in the second year of a solid recovery for luxury watches.

Total Swiss watch exports to the U.S. fell in value in 2015, 2016 and 2017 but, last year, the tide finally turned, jumping 8.2% to CHF2.22 billion while, through the first seven months of 2019, exports to the U.S. are up 7%.

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Tags : npd grouppatek philippeReginald BrackRolex
Alex Douglas

The author Alex Douglas