Q&A: Future of Retail, Roger Dubuis Insight, and Homage Pieces
I’m going to answer some questions about the future of high-end watch retail, Roger Dubuis, and some great homage watches
State of the Watch Industry in the Next 5–10 Years
A good question from my first episode: what will the state of the watch industry be in the next 5–10 years in terms of retail pricing?
Great question!
Where’s the watch market going? How are these watches going to be priced? It seems like lately pricing has climbed through the roof.
Some high-end watches are retailing at around $26,000 today — compared to $11,000 around ten years ago! They’ve more than doubled in the last ten years.
Here’s my take on things.
There are a couple of factors at play here. Obviously, inflation, cost of material, cost of labor have all gone up (and will continue to go up). All of these things need to be taken into consideration, especially if you’re talking about 5–10 years.
With only these factors, you can probably expect growth in the next 10 years to look similar to the past 10 years.
However, it may look very different because of how much the watch industry has grown.
There’s a reason the majority of watch companies allow guys like myself to sell their stuff online. It’s because of the exposure!
It’s because of the Internet boom in the last 15 years that the watch industry has grown.
It used to be that an average joe was intimated to walk into a watch boutique. Now, it’s accessible!
You pull out your phone, pull up a website, and have hundreds of watches to peruse (that are being sold at a discount). It’s a lot more accessible. It’s kind of like shopping at Amazon these days.
But what is going to keep the prices at bay? Some of the manufacturers are trying to cut out Authorized Dealers and brick and mortar stores.
They are trying to shift the business focus onto their own boutiques.
[bctt tweet=”The average manufacturer sells their watches at 6 or 7 times the price of manufacturing.” username=”luxurybazaar”]
If they manufacture a watch for $100, they’ll sell it for $600 or $700.
This doesn’t mean they make $600 for every watch they sell since they have marketing, boutiques and other overhead costs. Then the dealer will turn around and sell it for about double — so $1,400 at retail.
That is the amount of money that the manufacturer is leaving on the table.
As manufacturers turn to this model, it will simultaneously put more money in their pockets and keep the prices at bay.
Another factor impacting the future pricing of watches is currency.
When the Euro was at $1.60 (vs. $1.17 today) it was a big deal.
Prices kept climbing (especially because the market was hot).
This was a particularly big deal in 2008 with the market crash. I don’t foresee us having a huge crisis like in ’08 in the near future, but it could affect retail prices dramatically.
Any insight on Roger Dubuis?
Here is the full question from Steve Muzz:
“Any insight on Roger Dubuis? I used to be a big fan and then they did the massive switch up and discontinued their popular models and came out with an insane price increase. Secondary they are taking a huge beating, however, I still want to get a double tourbillon but fear I will be married to it forever and then if the company folds service will be pretty much near impossible. Normally I play it safe with AP however the Roger Dubuis model in question is pretty interesting.”
Here’s the thing about Roger Dubuis.
When I first started out in the business, I remember attending my first trade show. I had someone come to my case offering a trade with Roger Dubuis watches. I went for the deal.
I found out a couple of years later that this distributor hadn’t done what he was supposed to do.
Instead of building the Roger Dubuis brand by working with authorized dealers and new partnerships, he took the quick route. He put up the money for a larger order from Roger Dubuis, then turned around and started selling them through the back door. In the process, he made a quick buck on his investment and devalued the brand.
It took Roger Dubuis a long time to get their image back. But at the end of the day, Roger Dubuis makes incredible watches.
The quality of the movements is great.
In fact, the diver chrono watch has the same movement as the Patek Philippe 57 watch.
The fact is they have gorgeous looking watches. The ladies’ pieces are also wonderful!
Although they are still trying to get over the misconception that Roger Dubuis watches don’t keep their value, today, they’ve come back down to earth.
They’ve come up with a new skeleton model that retails for a reasonable price.
You’ve got the Lamborghini limited editions that are flying off the shelves. Everybody wants them, and they’re actually affordable!
There’s no failure in the formula that they’re moving forward with.
Better looking watches, same great movements, better retail prices.
Going back to Steve’s question: should he actually buy the double tourbillon? My short answer would be “go for it!” You’re getting 35–40% off on the brand new piece.
Let me tell you my projection: Roger Dubuis is not going anywhere.
But even if it does, just because a manufacturer doesn’t exist doesn’t mean you can’t get your watch fixed.
There are plenty of talented watchmakers out there. It’s much cheaper and more effective than sending something to the manufacturer.
What do you think about homage pieces? Do you think they’re just blatant copies or great pieces to own?
Well first, let me say that you just have to buy what you like first and foremost.
There are two ways you can look at homage pieces.
One, that they’re actually paying homage to a watch that was made 50–100 years ago.
Two, they ran out of new ideas and want to build hype about a new limited edition.
But all that matters is how you feel aesthetically about the particular watch.
With that said, you don’t have Rolex or AP doing homage pieces. These brands may come out with an anniversary piece, but they will be a brand new watch.
I actually like homage watches because vintage watches appeal to me.
Take the Jaeger Reverso — made as a homage to the original Reverso made back in the day. I actually did an episode of What’s on My Desk on the Reverso if you want to check it out.
Bottom line is I think all watches are great, including homage watches.
For those that like the history behind watches, homage watches are great. They represent your interest in the history of a particular manufacturer.
If you like homage watches, there’s nothing wrong with it.
Thank you for joining me this time around! That’s it for now — leave a comment on the YouTube video to get your question answered next time!
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