The core message of the Bloomberg article on the Swiss watch industry was hardly news: Swiss export was declining in every month of 2016. However, what caught me by surprise was this bit: according to the Federation of Swiss Watch Industry, watch manufacturers have bought back USD $1.3 billion worth of stock from their authorized dealers! Clearly, the manufacturers would rather buy back the stock and fill in their storerooms than to tempt dealers to discount. This is a surprising new strategy that will prevent a price drop but it will also further reduce production output. Rest assured that whoever decided to scramble serial numbers (and prevent buyers finding out the manufacturing date) is now regarded as a true industry visionary.
On the contrary, readers’ feedback to Bloomberg's article was less amusing. In essence, general wisdom revolves around two points: a) luxury watches don't sell because millionaires are frugal and b) not only do smart millennials no longer need watches to tell the time, but they are averse of showing off their status by wearing expensive watches. As far as I am concerned, both explanations are equally inaccurate.
While some millionaires are indeed misers and penny-pinchers, the majority of them actually do enjoy their life. The overwhelming majority of millionaires travel business and first class, not economy. Many of them live in luxury homes and love their hobbies, and don't mind spending their hard-earned cash on the things that give them pleasure. However, what makes them stay millionaires is the ability to delay the purchase and completely ignore the 'urge for instant gratification'. Millionaires rarely buy goods at the retail price level and would never pay a premium. They are simply waiting for that very special deal - whether it is a house or their favourite stock, a car or a watch - and are ready to close the deal when it suits them. They also have that very special power: the ability to instantly recognize the true (intrinsic) value of a goods or service and know the difference between value and price.
The myth that youngsters are no longer interested in fine timepieces is equally pathetic. I am yet to see a person - of any age for that matter - who is blasé, indifferent or apathetic once they strap on their wrist a 'live' ticking marvel of mechanical engineering and learn about its history. "I LOVE it" is the most common reaction, and often, that very timepiece becomes the first of many in a journey of sophistication and appreciation. The reason why millennials prefer iPhones to Pateks is that most of them simply have no disposal income and have not yet been enlightened and exposed to the wonderful world of horology. Youngsters have their priorities, and rightly so; education, family, mortgages and travel should always have the priority over investing in depreciating (yet so enjoyable!) assets. I say: give them enough time, and most of them will eventually 'get there'.
I for one am waiting for the Swiss watch treasure chests to fill in, flow over, spill out and to reach the grey market, and then to reach us, the ordinary people.
The sooner the better!