The luxury watch market exceeded $48 billion in 2023. Second-hand watches from leading brands appreciate by 20% annually
When you ask someone what comes to mind with the mention of Switzerland, they will likely say: watches. Perhaps chocolate or even banks might also come up. The Swiss national identity is closely tied to these exquisite time-measuring devices that adorn wrists worldwide.
And for good reason. The Swiss watchmaking tradition traces its roots back to the 17th century. Although timepieces were crafted between the 14th and 16th centuries, they couldn't rival those of neighboring powerhouses like France, the Netherlands, and England. However, in the late 16th century, the arrival of skilled French refugees in the Geneva area spurred the creation of small, prestigious watches, often engraved and intricately decorated. Over time, as they connected with other industries and trade networks, the specialization in watchmaking flourished.
In the 20th century, the Swiss watch industry successfully navigated the challenges of two world wars. During the interwar period, specifically in the 1930s, it formed an alliance to counter growing competition from the US. U.S. By the 1960s, Switzerland produced 60% of the world's watch products. However, the emergence of Japanese quartz watches in the subsequent decades presented a new challenge. The Swiss industry responded by merging, allowing it to adapt to the evolving market demands.
Today, Switzerland is home to three major watchmaking groups: Swatch Group, Richemont and LVMH. The country also boasts six watchmaking schools, and the craftsmanship in this sector has been recognized as Intangible Cultural Heritage by UNESCO.
The quartz revolution also paved the way for the rise of high-end watchmaking, where the skill, perception, and intuition of the craftsman remain crucial. In recent years, investing in luxury watches has become increasingly popular.
A market of interest for investors
High-end watches are produced in limited quantities, and this scarcity, combined with strong demand, grants them a level of exclusivity that makes them appealing investment assets. In 2023, this market reached $48.1 billion.
This surge isn't confined to new products: according to a report by the Boston Consulting Group, the prices of second-hand watches from the three most prestigious brands—Rolex, Patek Philippe, and Audemars Piguet—rose by 20% annually between 2018 and 2023. Other brands worth noting include Omega, Richard Mille, Vacheron Constantin, and Breitling.
The top brands frequently release limited editions. These limited editions are particularly appealing to investors due to their higher potential for appreciation. With only a few pieces available for each product, collectors are acquiring treasures they can easily profit from in the future.
Move forward, at your own pace
Returns of up to 20% per year
Investments in high-end watches intended for resale typically range from $5,000 to $20,000 per item. However, unique pieces can reach prices over $50,000.
To optimize your investment, patience is key when selling them. In the short term, between 1 and 3 years, value increases are generally not significant, considering market fluctuations and transaction costs. The best returns usually come between 5 and 10 years. Annual returns on these transactions typically range from 5% to 15%, although some models have appreciated by up to 20% per year.
So, where can luxury watches be bought and sold? Like other collectibles, auction houses remain a primary channel. You can also visit specialized watch fairs or explore online markets. Additionally, as in any sector, private sales are possible if you know someone with whom you can negotiate a transaction.
Although Rolex CEO Jean-Frédéric Dufour mentioned a couple of springs ago that he dislikes "people comparing watches to stocks. We make products, not investments", these luxury and precision instruments consistently capture the interest of investors. This will continue in 2025 as well.