The luxury Swiss watch market has been experiencing continued price declines, according to a recent report from Morgan Stanley and WatchCharts. The secondary market for Swiss luxury watches saw a 2.1% quarter-over-quarter price decline in Q2 2024, marking the ninth consecutive quarter of declining prices since Q2 2022. All three of the big-name brands – Rolex, Patek Phillippe, and Audemars Piguet – suffered declines in Q2 2024.
The report also highlights broad-based weakness in the market, with nearly all brands experiencing price declines. LVMH brands underperformed in Q2 2024, and Richemont brands also faced significant declines earlier in the year. Reduced market speculation for Rolex watches has been observed, which may be easing primary market demand.
Furthermore, the report indicates high inventory levels for the Big Three brands on the secondary market, signaling a persistent oversupply from the aftermath of the speculative bubble burst in March 2022. Absorption rates, or inventory turnover, remain significantly lower than 2021 levels for the Big Three brands, suggesting that watches are taking longer to sell on the secondary market.
The expansion of the Rolex Certified Pre-Owned program, along with disappointing sales reports from industry giants like the Swatch Group and Richemont, paints a challenging picture for the Swiss luxury watch market. While the secondary market for Swiss luxury watches is showing signs of a slowing decline, it has yet to stabilize. Given the current market conditions, secondary market buyers may need to exercise caution, retailers could face prolonged inventory challenges, and consumers might encounter less favorable value retention on their purchases. The industry's troubles are not over, and it remains to be seen how the market will evolve in the coming months.