Have We Reached Peak Steel Watch?

“If you look at the Nautilus, it’s a very, very soft bracelet, a soft case. It’s a discreet, discreet, sport-elegant watch. What’s not prudent is how many people think of owning one.” are interested. That’s a different matter.”

As the problems mount, it’s almost as high-class: Thierry Stern, president of Patek Philippe, finds himself in a position to create the world’s most desirable sports watch. The Nautilus is a integrated case and bracelet watch designed by Gerald Genta and introduced by Thierry’s father Philippe in 1976. For most of its life, it has served its function as the watch for the Patek Philippe customer who did not want to wear out its opulent complexity. Perpetual calendar, chronograph or minute repeater while swimming.

Patek Philippe Nautilus Ref 5711

But by the time this odd-looking watch reached its 40th birthday, it had become a hot watch. That was in 2016, and temperatures have been rising ever since, until last year when Thierry Stern decided to retire steel ref 5711. A final series with a subtle green dial was announced, and a run of the 5711 was announced at the end of the year. A Tiffany-blue dial was made for the retailer of the same name.

The 5711 was at risk of becoming a dog with a wagging tail. Patek Philippe is a watchmaker active in all fields, from the highest complications to the simplest dress watches, yet the craze for Nautilus, with waiting lists for years into the future, was becoming a distraction.

However, the announcement sent a jump in prices in the secondary market. As recently as June, Philips sold the regular production 5711 for $170,000 (nearly five times that of official retail).

Audemars Piguet Royal Oakey

Audemars Piguet Royal Oakey

Rolex Oystersteel Daytona

Rolex Oystersteel Daytona

The situation is far from unique for Patek. Secondary market value of the Genta-designed Audemars Piguet Royal Oak, which is 50 years old this year (Christie sold the 15202ST for just over HK$1mn – around £114,000 – in April), and an almost all-steel Rolex, in the past Fast forward two to three years. Instead of selling, retail workers now find themselves in the business of managing expectations. “We have had to spend a significant amount of time training our store teams to manage frustrated consumers,” says Brian Duffy, CEO of Watches, Switzerland. Meanwhile, the conspiracy theories became so obscure that Rolex issued a public statement about the shortfall. “The scarcity of our products is not a strategy on our part. Our current production cannot fully meet the current demand, at least not without reducing the quality of our watches – something we refuse to do because the quality of our products should never be compromised.

Line chart of the watch market index (£,000) showing the rise and fall of the all-time classics

But prices in the secondary market have cooled in recent months, as observed by Danny Pizzigoni, founder of The Watch Club. “I believe steel sports watches are still a cornerstone of any collection, but we have seen phenomenal growth, especially in the last two to three years, which pushed ‘steel sports’ into a separate category There’s been a much-needed improvement, and sales aren’t what they were six to 12 months ago.” He uses the Rolex chronograph example: “A brand new ‘Panda’ in the spring The 116500 Steel Cosmograph Daytona hit £45,000 when it was placed on the secondary market; Some vloggers estimated it to reach £100,000. But today it sells for £35k to 37k – that’s 20 percent down, but still 200 percent above RRP, and still 20 percent more than what we were asking for the same watch two years ago. These über-collectible steel watches have had a blip, as they went uphill too fast, and were not durable. ,

This price improvement has highlighted the emergence of the contemporary and modern steel sports watch as a discrete area of ​​watchmaking with particular appeal to younger collectors. “The initial attraction of steel sports watches for younger collectors is being able to purchase them at relatively low retail prices,” says collector Shari Rahman. “Provided, of course, they can be found in retail, which is becoming increasingly difficult, if not impossible.” Wearability, especially as dressing becomes increasingly casual, and durability in terms of sturdiness and water-resistance further add to the appeal, while their online identity enhances their status-convention powers. “Today’s generation thrives on instant gratification in many ways with the unprecedented impact of social media,” says Rahman. “Gathering in general is no longer limited to just being a hobby, but a means to be able to establish yourself as an authority and increase your credibility over all that collects in the social media-filled metaverse! “

“Demographic is different, this is a young, social media-aspirated market that impresses with Ed Sheeran wearing a Nautilus, or Jay-Z from the front row in his skeleton Royal Oak,” agreed Pizzigoni.

Among less experienced collectors, the ability to identify a watch from social media posts is often confused with actual knowledge and understanding. “Vintage watches require very little expertise or research, unlike vintage watches, which require patience and research to find the perfect example,” says Silas Walton, founder of specialist watch sales platform A Collected Man. “From an investment perspective, ‘blue-chip’ vintage Patek Philippe does not offer the same perceived financial returns in the short term. Steel sports watches can be compared to bullish technology stocks, while ‘blue-chip’ vintage Patek Philippe is more May represent a mature, long-term, good investment.

There was of course speculation and risk taking. Anecdotally I heard from an auction house expert that he was getting calls from a group of three or four people who wanted to buy a Nautilus using a credit card, purely for investment; Given that credit-card interest runs at around 20 percent APR, this would mean that expectations were running extraordinarily high.

Of course, this is not an actual watch-collection. But while rash speculators entering the commodized steel sports market may be at a disadvantage, rare pieces, whether an older complication, the green-dial Nautilus or the Paul Newman Daytona, are less volatile. “We’re not seeing the same improvement with rare pieces,” said one dealer.

Meanwhile, Brian Duffy is actively welcoming the secondary market cooling. “Irrational price premiums are unhealthy and unhelpful for the genuine watch-lover and authorized retailer. Our waiting list is expanding. We are adding ROI [registrations of interest] As fast as we are supplying watches and more sales spread across many brands. ,

He’s seeing that customers troubled by secondary-market premiums and long waiting lists are finding there’s a growing choice of interesting steel sports models from other brands: Chopard has experienced a hit with its Alpine Eagle; Vacheron Constantin’s Overseas has been rediscovered; And Bulgari’s Octo Finissimo is a contemporary classic. If they don’t appeal, how about Odysseus from A Lange & Sohne or Zenith’s Defy Skyline? The horizon is expanding.

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