The Year Of Living Incrementally

How a slow year presents a powerful opportunity for watchmaking.

The Vacheron Constantin Berkley Supercomplication: the watch as cultural object

In the wake of Watches & Wonders 2024 there was with some justification, talk of 2024 being at best a year in which dynamic growth is off the table – year over year, in March Swiss watch exports were down 16.1%, per the latest industry statistics, and the general mood now that we’re into the second quarter of the calendar year, seems to be one of caution. Just before the show, Rolex CEO Jean-Frédéric Dufour gave a rare interview to Neue Zürcher Zeitung, in which he said, in part:

“2024 will be a challenging year. It marks the end of a phase in which all manufacturers have been doing well. In good times, production tends to be too high. When markets weaken, as is the case now, retailers come under pressure to cut prices. This is extremely problematic because discounts damage emotional products like ours.”

The prognostication reflects the convergence of several trends. One of these is the trend across the industry towards higher and higher prices, which, however you feel about it philosophically and in terms of price charged for value given, necessarily means a shrinking group of potential clients, from which it follows that the client base becomes inherently more volatile. The second is less easy to diagnose without the sort of large scale polling for which Split Seconds is ill equipped to say the least, but as the FT reported in December of last year, we’re seeing a softening of consumer appetite for luxury in general and there is no reason to think that fine watchmaking is immune. And there is of course, the cyclical nature of interest in watches in general – after the overheated market of the couple of years leading up to the correction that began in 2022, it’s easy to understand why consumer interest in luxury watches is cooling off.

I should qualify what I mean by “cooling off.” I think that everyone in the industry – manufacturers and press alike – recognize that the COVID bump was also a convergence of several trends, including an overheated cryptocurrency market, restrictions on luxury experience spending, and on top of everything else a genuine peak in interest in fine watchmaking on its own merits. Having seen several peaks and valleys since beginning to take an interest in watches several decades ago, it seems to me that there is a tendency in the watch world as in any other to believe to a certain extent, that when times are good they will always stay that way – we all tend a bit to turn into fiddling grasshoppers and nobody sees the point in being an industrious ant until the snow is already deep on the ground. This is only to say that every business has its ups and downs and watchmaking of course is subject to the same cyclical demand as any other market.

However, with some of the cooling off comes an opportunity, at least it looks that way to me. As the demand for watches has exploded over the last decade, I think we’ve all become a little hung up on prices – this is partly due to auction records being set, and then broken, and then set and broken again and there is undoubtedly a certain fascination to seeing just how high things can get. It’s also partly due to price increases, pretty much across the board; it seems as if the entire industry is trying to migrate into the premium sector, with the few exceptions only going to underscore just how ubiquitous the premiumization of watch brands has gotten. And in the last few years of the pandemic, it seemed as if, with prices in the pre-owned market marching steadily upwards, that there were potentially huge profits to be made there as well. In other words, what was once at least a conversation about watches turned in just a few years, into a conversation about money – as Roberta Smith wrote (presciently, as it turns out) for the New York Times in 2013, of skyrocketing prices in the art auction market, “Art is hard to see through the clutter of dollar signs” and as it turns out, watchmaking is too.

But I think the cooling market actually represents one of the biggest opportunities fine watchmaking has had in a long, long time. Buying a watch for investment purposes or simply because it’s a hype watch – which invariably means a highly liquid one – has very little to do with the qualities of a watch as a watch, and very little to do with the amount of actual craftsmanship, historical importance, and ingenuity and originality in design that a watch represents. And here’s where the opportunity arises.

One symptom of where that opportunity lies actually appeared at Watches & Wonders in an interview Time & Tide’s Andrew McUtchen did, with of all people, Ricardo Guadalupe, CEO of Hublot, at, of all places, the Hublot stand at Watches & Wonders. McUtchen noted right at the top of the interview that Hublot’s stand this year was noticeably less over-the-top than in previous years, and Guadalupe had an interesting response.

“Hublot is always wild and crazy and colorful … but not so much this year, it’s a bit more subdued,” McUtchen remarked. Guadalupe replied, “Hublot wanted to do something different, you know … we’re unique, different, and the first in everything we do, that’s our philosophy. So this year, we wanted to focus on watch substance, on showing that Hublot is a real, verticalized manufacture and, we wanted to do the storytelling and the promotion around our own movements.”

As McUtchon notes in the interview, this is a story that is not told, at least historically it has not been one that Hublot has told with any great consistency and detail from one year to the next. However, if ever there were a year to start, I think it’s this year. If there is a lowering of the volume of the conversation about money, investment value, and scarcity, it’s probably a very healthy change for the industry, which after all creates products which ultimately have to have some intrinsic value. It’s not even a matter of justifying costs. Watches are as we all know, unnecessary; they are luxuries to the same degree they’re superfluous. You can’t even argue that they’re conveniences and if they aren’t ultimately viable as investment vehicles for the people who collect them, they why should anyone buy one at all?

The answer obviously is that watches are interesting. Mechanical watchmaking represents an attempt to solve, in the form of a working precision mechanism, some of the most basic and essential problems in classical mechanics, over around five hundred years and they also (obviously) are vehicles for expressing personal taste, different design languages, and a whole plethora of arts and crafts – in some cases, more than one, in the same watch. They touch on an almost limitless range of different domains and over those five centuries, they have been everything from indispensable aids to navigation, to expressions of whimsical mechanical fantasy, to keepers of personal time, features of sports of all kinds, and even the world of crewed space exploration. They are in fact, a part of this wonderful thing we have called culture, and ever since the first mechanical clocks began ticking hundreds of years ago, they have been a part of the evolution of every aspect of human culture, the arts and sciences alike.

And every once in a while, it is salutary for us all – industry, enthusiasts, retailers, pre-owned watch sellers, everybody – to remember that. As Yuri the Retired Russian Wrestling Coach, who had a stand selling vintage watches at the 26th Street Flea Market, once remarked to me, “It’s always nice to buy a watch that keeps its value.” The value that makes a watch worth buying and owning, however, is not just its commercial value. The real value of a watch is to be found in what it represents as a cultural object; as René Beyer said to Nick Foulkes back in 2021, “Watches are not just a product, they’re a cultural object.” In the same interview with Neue Zürcher Zeitung in which he said that 2024 would be a challenging year, Rolex CEO Jean-Frédérique Dufour also closed by saying, emphatically, “We sell dreams!” It’s true but as Delmore Schwartz wrote, in dreams begin responsibilities. To get back to basics and tell the true, authentic stories of quality and cultural meaning that it has to tell is the best way for the watch industry to fulfill that responsibility – not just to its clients and those whose enthusiasm has supported it, but to itself as well.