High-ticket watches are booming as women and Gen Z shell out

This article is part of our Advanced Membership package. To enjoy unlimited access to The Long View from Vogue Business, The Fashion Exec's Guide and bi-monthly Market Insights Reports, sign up for Advanced Membership here. When Morgan Stanley and LuxeConsult released their hotly anticipated annual Swiss Watcher report in late February, one statistic stood out among the wave of data. Watches with a retail price tag exceeding CHF 25,000 ($27,000) accounted for 69 per cent of growth in the Swiss watch sector in 2023 — and accounted for 44 per cent of the total value of Swiss watch exports. The premiumisation strategy adopted by many brands is clearly paying off. It’s a trend that helped the sector to a strong performance in 2023. According to the Federation of the Swiss Watch Industry, the value of exports was about CHF 26 billion ($28.7 billion), representing a 7.7 per cent increase on last year. The number of watches exported totalled just under 17 million units, 7.2 per cent up on 2022. This represents a big slide in the volume of sales since 2000, when exports peaked at 30 million units. But since then the value has almost tripled, highlighting how the sector has shifted evermore upmarket. That said, the post-pandemic luxury watch boom is over and executives speaking in advance of watch fair Watches and Wonders (Geneva, 9 to 15 April) speak cautiously and prefer to emphasise a process of “normalisation” in the market. Ilaria Resta, the new CEO of Audemars Piguet, has made it clear in interviews that she is going to be driven by quality rather than growth. The Morgan Stanley report says: “Ms Resta’s mission is to stabilise the brand and capitalise on the major shift the brand has undergone over the last decade, transforming Audemars Piguet from a watchmaking brand to a luxury house.” Jean Arnault, watch director at Louis Vuitton, is also introducing a vigorously high-end vision for the brand. Speaking to Vogue Business last summer, he said implementation of this strategy is a top priority. The brand’s new-iteration Tambour has a starting price of about $20,000, a significant increase on older quartz models at around $5,400, positioning the average price of Louis Vuitton’s watches above Tag Heuer, Hublot and Zenith — at the top of the LVMH watch brand portfolio. Iconisation and entry-level products Iconisation — whereby a product assumes icon status through accumulated cultural capital — is another ongoing trend. And this is not necessarily confined to the premium sector. The success of the Omega X Swatch’s MoonSwatch capsule, released in March 2022 with an accessible price tag of $260, proves the point. “There are trends that also present opportunities for growth and success,” says Breitling CEO Georges Kern. “Iconisation plays into the hands of a brand like Breitling with an incredible back catalogue and 140 years of history.” This strategy underpinned Cartier’s relaunch of fan-favourites such as the Pasha (2020) and the Panthère (2017) that were previously discontinued. The same approach has prompted Piaget’s reintroduction of its 45-year-old Polo 79 this year and Breguet’s marketing push around updates to the Reine de Naples, based on the original bracelet watch dating back to 1812. Despite all the talk about premiumisation, the market for entry-price watches is reassuringly stable. With 3.3 million units exported last year, the segment was up 3 per cent on 2022. The category has proved a beloved playground for luxury players to lure aspirational consumers. Dior launched La D de Dior (2003) and Gem Dior collections (2021), starting at $4,000 and $4,900, respectively, while Cartier continues to evolve its Tank range, with models starting at $4,000. This price category has been Breitling’s strategic focus since Kern took to the helm in 2017, boosting sales to CHF 870 million, becoming the ninth brand by sales last year, gaining 10 positions since 2017, according to Morgan Stanley’s report. Meanwhile, a new cohort of independent brands, such as Nivada Grenchen and Vulcain, specifically target the watch segment below $1,000. “We’ve hit the sweet spot regarding the price segment ranging from CHF 3,000 to CHF 30,000 and above,” says Kern. “In the past few years, we’ve broadened our offering with a wide range of new products, from the sporty Endurance Pro, our collection’s entry-level, to the more refined and complex Premier and Super Chronomat lines.” Inflation, together with the strength of the Swiss Franc, has prompted increases across all price points. However, brands are careful to maintain competitive entry-level and mid-level pricing. Growth? Women, young people Historically, the watch industry has offered women scaled-down versions of men’s watches (with a sprinkle of diamonds). Yet, self-spending female customers and influential social media figures such as Dimepiece’s Brynn Wallner and YouTuber Jenni Elle have helped reshape the conversation, spotlighting the diverse tastes of womankind. An increased presence of women in leadership positions is supporting the shift. Speaking to Vogue Business last June, Ginny Wright, chief executive of the Americas for Audemars Piguet, said the company is targeting Gen Z and Gen X female entrepreneurs and executives with a goal of reaching 30 per cent female self-purchasers by 2024. This year, Audemars Piguet and Breitling have enlisted female fashion designers Tamara Ralph and Victoria Beckham, respectively, to design watches with the female consumer in mind. These partnerships underscore the growing significance of the women’s watch market, which, according to Allied Market Research, was worth $23.7 billion in 2019 and is projected to rise to $26.7 billion by 2027. Sarah Willersdorf, global head of luxury at Boston Consulting Group, remains somewhat frustrated. “Unfortunately, I still need to remind many people about the significant, unexploited growth opportunity for females in the watch category. Female watches represent a significant portion (30 to 40 per cent) of the overall luxury watch market. Women are growing interested in previously male-only, high-complexity mechanical luxury watches.” Another opportunity lies with teenagers — who consider the Omega X Swatch MoonSwatch a must-have accessory. At last year’s Watches and Wonders, 25 per cent of public ticket buyers were under 25, with the overall average age of attendees being 35, says Matthieu Humair, CEO of the Watches and Wonders Geneva Foundation. Brian Duffy, CEO of the Watches of Switzerland Group says, “There is a significantly younger cohort positively interested in buying luxury watches due, we believe, to digital marketing, brand innovation and elevated retail.” “At one of the latest clients’ dinners we organised in Singapore, the youngest guest was 17 years old. At 37 years, I was among the oldest guests,” says Matthieu Haverlan, managing director of Ulysse Nardin. “The average age is falling. It’s true to some extent in Europe, it’s true in the United States, and it’s very true in Asia — in China, the average age of our consumer is 30.” The rise of independent watchmakers The dominance of the big brands remains overwhelming. Between them, the ‘Big Four’ — Rolex, Patek Philippe, Audemars Piguet and Richard Mille — hold a 43.9 per cent share of the market. But independent brands are emerging to challenge established brands with their innovative designs and storytelling, intriguing seasoned and amateur collectors alike — and attracting investment from high-profile individuals. Hollywood star Leonardo DiCaprio took a stake in startup ID Genève in 2023. Don’t ignore niche players, says Oliver Müller, founder of LuxeConsult and co-author of the Morgan Stanley report, who sees an opportunity for them. “Strong clusters are creating a pull for niche brands to find clients who might want something more exclusive. The challenge for those brands is then to scale the business despite dominant actors in the market,” he says. The Morgan Stanley report highlights 50 niche watchmakers, with production ranging from a mere handful to several hundred timepieces annually and annual sales from under CHF 2 million to around CHF 100 million. These niche brands contribute less than 2 per cent of the Swiss watch industry’s overall revenue, but strongly influence the industry through their appeal to serious collectors. Three niche creators have broken into the top 50 for the first time: FP Journe at 37th with CHF 98 million ($108 million) in sales, H Moser & Cie at 38th with CHF 93 million, and Greubel Forsey at 49th with CHF 50 million. The drawing power of these independent watchmakers demonstrates how the upper levels of the watch market are behaving like the art market. While the focus is on the best works of blue chip artists, collectors are always on the lookout for so-called “red chip” artists — the rising stars and possible must-haves of the future. “One of the best PR campaigns we ever had was when we announced we were becoming independent,” says Haverlan of Ulysse Nardin’s separation in 2022 from Kering. The separation has certainly pushed sales of Ulysse Nardin’s eccentric Freak model, with starting prices north of $31,000. Peter Harrison, CEO of Richard Mille, draws similarities with the art market. “As an independent brand that makes about 5,500 watches per year with an average price of €285,000, we are closer to the art market than the watch market,” he says. “I am an art collector myself, and collectors see different things in different watches as well as in art. They are guided by their taste and the macroeconomic environment doesn’t affect their spending patterns.” Key takeaway: Premiumisation is still providing the blueprint for growth, but there are unexplored opportunities among female and teenage clients. The segment for luxury watches priced between $1,000 and $5,000 has been stable for over 10 years, and deserves attention. Niche brands are becoming a force to be reckoned with in the higher end of the luxury watch market — a space akin to the art market. 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