In an episode of HBO’s hit show Succession, one of the main characters gives a Patek Philippe watch to his future father- in-law Logan Roy, the fearsome patriarch of the media empire.
‘It’s incredibly accurate; every time you look at it, it tells you how rich you are,’ Tom Wambsgans, played by British actor Matthew Macfadyen, jokes.
The problem is that criminals can tell too.
Some dealers suspect that knife-wielding gangs – such as the ‘Rolex Rippers’ in London – carrying out a spate of robberies of expensive watches may have contributed to a slowdown in luxury watch sales, and a collapse in the value of second-hand watches on the grey market.
The Metropolitan Police reported a 60 per cent rise in watch thefts in London in 2022, with the capital accounting for more half of the 12,000 reported in the UK that year.
Easy pickings: The Metropolitan Police saw a 60% rise in watch thefts in London in 2022, with the capital accounting for more half of the 12,000 reported in the UK
Thefts have fallen sharply since then after a series of sting operations in the West End.
But for the lucky few who have the money, there is little point splashing out on a wildly expensive ‘timepiece’ (‘Pateks’ range from £14,000 for an entry level model to well over £1million) if you’re too afraid to show it off in public.
Watches of Switzerland, the UK’s biggest luxury watch retailer, has seen shares slump by almost half since the turn of the year, after it warned in January that it expected to generate 10 per cent less from sales that it had previously forecast after a difficult Christmas.
Meanwhile, Bloomberg’s Subdial Watch Index – which tracks the 50 most traded models by value on the second hand market – has dropped by 40 per cent since the market peaked around two years ago.
Some have predictably dubbed it the ‘Rolex recession’.
‘People are definitely more conscious of watch theft nowadays, especially in major cities like London,’ said Christy Davis, co-founder of London-based second hand watch trading platform Subdial.
He said the market is still growing, but the most popular and recognisable stainless steel luxury sports watches, such as Rolex Daytonas and GMTs, have lost some of their allure because they are so easily targeted by thieves.
The dramatic fall in the value of second-hand luxury watches has provided a jolt to a growing army of collectors and amateur investors.
Patek Philippe: Logan Roy, the fearsome patriarch in HBO’s hit show Succession is played by Scottish actor Brian Cox
Before the onset of the ‘Rolex recession’ in the first half of 2022, the most popular models had been soaring in value for years, beating returns available in stockmarkets.
This fuelled rapid growth in the second-hand market, which is worth an estimated £2billion in the UK and £24billion worldwide. The fact this has coincided with the rise in smart watches makes this all the more impressive.
For obvious reasons, luxury goods retailers are not too keen to broadcast the risk of their customers being robbed.
But they are aware of the problem. Swiss watch-maker Audemars Piguet, best known for its Royal Oak model, broke the mould last year when it introduced a guarantee to replace or reimburse customers if their watch is stolen within two years of them buying it.
But retailers like Watches of Switzerland maintain that ‘challenging macroeconomic conditions’ – including inflation and interest rates – are to blame for dented sales, not the threat of crime.
During the pandemic, wealthy customers, unable to spend their money in restaurants and on holidays, splurged on luxury watches.
However, successive rate hikes started to make prospective watch buyers think twice about splashing out as they worried about recession.
But Davis said there are signs the market may be starting to stabilise as inflation falls, with investors anticipating interest rate cuts in the coming year.
However, in common with other luxury retailers including Burberry and Mulberry, Watches of Switzerland has also been hit by Prime Minister Rishi Sunak’s decision to ditch the VAT refund for tourists in 2021.
The retailer revealed in a trading update in January there had been ‘minimal return of tourist spending due to the lack of VAT-free shopping’.
Chief executive Brian Duffy alluded in the update to the company’s post-Covid hangover, but made no mention of crime.
The retailer, which has 222 showrooms across the UK, Europe and the US, has stressed that demand from customers putting themselves on the waiting list for popular brands remains ‘strong’.
All things considered, sales of luxury watches have held up pretty well, down just 1 per cent in the 13 weeks to January 28, compared with the same period last year. While jewellery sales were down 18 per cent.
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