As we enter a brave new world in the big wide world of watches, new ground is being broken at the same time personnel are being let go of in the Swiss watch industry, as the haemorrhaging of cash has NOT been stemmed. I'm not on my high horse crowing "I told you so", however the economic shift that has occurred in the past 9 months, has accelerated the change that had to occur. Too many "mechanical" watches were being produced for the market to absorb, retailers were being forced to take more inventory; "You must have a good representation of the brand" & "Replenish what you've sold" was the mantra for the past 5-8 years. Well all that came home to roost, wonderful deals are available to those with cash as retailers and the watch companies are forced to "move" product, gone are the days of holding the line on "No discounting Patek or Rolex". I know of a retailer recently forced to take back a couple of Patek's sold at "No discount" because the client found them for considerably less money elsewhere.
What does this mean for the aficionado? How does it effect the collector?
Well for starters, great opportunities to acquire rare pieces are coming about. Many pieces that in good times would never be offered for sale, are coming out of the woodwork. Less competition for those few new "Art pieces", meaning the Dufours, Voutilainens, etc. will be available.
The new watches that are relatively common, meaning many have been made and more are on the way, will be available at big savings to the tune of 20-30% less than they were a year ago. What a bonanza for those with cash.
Another aspect is, that while many a collector I know sell or trade existing items to help afford a new piece, they will find the value of what they have to "trade-in" is also not going to be in the range they previously thought. This will come as a shock to many, who had banked on the value of second-hand pieces remaining strong in "desirable pieces", and the expectations will have to be re-adjusted if they are to continue playing in the fine watch world with this game plan. I think it is a great way to afford the new compelling pieces, one can only wear so many watches...Having said that, if you don't need to sell, don't. This is very much a buyers market, and like real estate or anything of value, buyers are in the driving seat when it comes to negotiating prices.
As Bob Dylan sang, "Times are a changing" and this will be seen more and more in the coming months as watch companies cut back production, retailers disappear, and collectors re-adjust their buying patterns. The value proposition and buying experience will by key and IMHO will separate those successful companies from those that will inevitably suffer and go the way of the Dodo. There is only so much money to go around, despite what the politicians all over the world do to "stimulate" the economies. I understand in Switzerland, the govt. under some sort of scheme, was "supporting" the watch industry by helping out companies with money to keep employees on at reduced working hours, un-employed Swiss watch industry workers are not good for the country's image!!! However this madness can only go on for so long before the money runs out and the reality of the bigger picture dawns. There are too many watches being produced for the market. This is why in recent days stories of 30-35% workforce cuts are beginning to filter out of Switzerland. Yesterday in speaking with watch industry colleagues, one number that stood out, 50% reduction is production capacity of one high end old traditional watch company that has been around a couple of hundred years!
I do see good times ahead for those watchmakers producing truly compelling watches of high quality, that cannot be considered commodity items, which is what the industry should be about rather than the way it seems to have gone these last few years in the over heated market place. A compelling reason should be made by each watchmaker/company as to why one should spend their hard earned money on their products rather than someone else's. I'm here to herald those Independent Watchmakers that don't have the budgets to splash images all over the place, but rather endow a collector with a timepiece of value with long lasting quality and a lifetime of enjoyment as the world of Independent Watchmaking is revealed over time!
