In an episode of the hit HBO show Succession, one of the main characters gives a Patek Philippe watch to his future father-in-law Logan Roy, the fearsome patriarch of the media empire.
‘It’s incredibly accurate; Every time you look at him, he tells you how rich you are,” jokes Tom Wambsgans, played by British actor Matthew Macfadyen.
The problem is that criminals know it too.
Some dealers suspect that knife-wielding gangs, such as the ‘Rolex Rippers’ in London, who carry out a series of thefts of expensive watches, may have contributed to a slowdown in sales of luxury watches and a collapse in value. of second-hand watches. on the gray market.
The Metropolitan Police reported a 60 per cent increase in watch thefts in London in 2022, with the capital accounting for more than half of the 12,000 reported in the UK that year.
Easy wins: The Metropolitan Police saw a 60% increase in watch thefts in London in 2022, with the capital accounting for more than half of the 12,000 reported in the UK.
Burglaries have dropped dramatically since then after a series of undercover operations in the West End.
But for the lucky few who have the money, there is little point in spending money on a wildly expensive “watch” (“Pateks” range from £14,000 for a basic model to over £1 million) if they are too afraid to show it off. turn it off in public.
Watches of Switzerland, the UK’s biggest luxury watch retailer, has seen its shares fall by almost half since the start of the year after it warned in January that it expected to generate 10 per cent less sales than it had forecast. previously after a difficult Christmas. .
Meanwhile, Bloomberg’s Subdial Watch index, which tracks the 50 most traded models by value on the secondhand market, has fallen 40 percent since the market peaked about two years ago.
Some, unsurprisingly, have called it the “Rolex recession.”
“People are definitely more aware of watch theft these days, especially in big cities like London,” said Christy Davis, co-founder of London-based second-hand watch trading platform Subdial.
He said the market continues to grow, but the most popular and recognizable luxury stainless steel sports watches, such as Rolex Daytonas and GMTs, have lost some of their appeal because they are easily targeted by thieves.
The dramatic drop in the value of second-hand luxury watches has shaken a growing army of collectors and hobby investors.
Patek Philippe: Logan Roy, the fearsome patriarch of the hit HBO series Succession, is played by Scottish actor Brian Cox
Before the start of the “Rolex recession” in the first half of 2022, the most popular models had been increasing in value for years, exceeding the returns available on the stock markets.
This fueled rapid growth in the second-hand market, which is worth an estimated £2 billion in the UK and £24 billion worldwide. The fact that this has coincided with the rise of smartwatches makes it even more impressive.
For obvious reasons, luxury retailers are not very interested in spreading the risk of their customers being mugged.
But they are aware of the problem. Swiss watchmaker Audemars Piguet, best known for its Royal Oak model, broke the mold last year when it introduced a guarantee to replace or refund customers if their watch is stolen within two years of purchase.
But retailers such as Watches of Switzerland argue that “challenging macroeconomic conditions” (including inflation and interest rates) are to blame for the dent in sales, not the threat of crime.
During the pandemic, wealthy customers, who couldn’t spend their money on restaurants and vacations, splurged on luxury watches.
However, successive rate hikes began to make potential watch buyers think twice about spending money as they were worried about the recession.
But Davis said there are signs that the market may be starting to stabilize as inflation falls, and investors anticipate interest rate cuts next year.
However, like other luxury retailers including Burberry and Mulberry, Swiss Watches has also been affected by Prime Minister Rishi Sunak’s decision to scrap VAT refunds for tourists in 2021.
The retailer revealed in a trading update in January that there had been a “minimal return on tourist spending due to a lack of VAT-free shopping”.
CEO Brian Duffy alluded in the update to the company’s post-Covid hangover, but did not mention the crime.
The retailer, which has 222 showrooms in the UK, Europe and the US, has stressed that demand from customers putting themselves on the waiting list for popular brands remains “strong”.
All things considered, luxury watch sales have held up quite well, falling just 1 percent in the 13 weeks to January 28, compared to the same period last year. While jewelry sales fell 18 percent.
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