Watches & Jewelry

Warren Buffett Sees the 2021 Luxury Watch Market Quite Robust

What could be more fitting for luxury homes and goods outlook than the Global Luxury Landscape 2021? This is the title of an annual report by Berkshire Hathaway HomeServices with an outlook ahead. Berkshire Hathaway is of course the conglomerate led by none other than Warren Buffett. The feature report has a major focus on the luxury housing and real estate market trends, but the report also shows how the 2021 luxury watch market remains quite robust.

This should be enticing for collectors of luxury brand watches, and perhaps for investors who buy watches as well. The global pandemic changed the way people collect and invest in watches according to the article, but the watched above $3,000 saw only a 0.1% dip in the fall of 2020.

Philips Watches, a Swiss luxury brand with a London based branch, was candid about auction increases throughout the pandemic. December 12, 2020 the New York flagship auction titled: “The Racing Pulse” brought in $27.6 million with 136 watches, contrasting the Geneva auction which was the first live event of the year. The highest single auction sales occurred at the Geneva watch Auction May 8-9 2021 totaling $42,000,000.

Berkshire Hathaway HomeServices also featured the CEO of Craft & Tailored. The view there was that as businesses shuttered and foot traffic dried up (in the pandemic) that they leveraged social media and technology. Their YouTube channel traffic rose 436% and buying and selling were both stimulated in positive ways. Customers he’s never met were buying $500,000.00 and $600,000.00 watches from around the world.

Collectors Dashboard evaluates collectibles as an alternative asset class. This means collectibles are attracting the same capital that could have been invested into stocks or bonds. Many collectibles now cost thousands of dollars (or much more), and that is easily the case among luxury watches.

There was a reference that those who are patient could buy a Rolex Submariner for $8,000 retail and walk down the street to sell it for $12,000. If this is the case, then there is a game for investors. So much for our theory of no such thing as watch arbitrage.

We wanted to include some other annual views and upcoming events or trends that would either compare or contrast to the data from the prior luxury outlook. A brief search of the web generates dozens of new articles and announcements from every luxury watch brand available.

Brands such as Rolex, Patek Philippe, Chopard, Tudor, Cartier, Omega and many others continue to see sales in-store, online and in auctions.

WatchTime New York is returning to in-person panels and reviews that center around the large base of collectors loyal to the show, which is entering its 6th edition. Here is a list of upcoming brands that will unveil exclusive or limited edition watches to the world for the first time live on the WatchTime show floor: Lange & Söhne, Armin Strom, Arnold & Son, Bell & Ross, Blancpain, Bovet, Breguet, Carl F. Bucherer, Chopard, Czapek, De Bethune, G-Shock, Glashütte Original, Grand Seiko, Greubel Forsey, Jaquet Droz, Laurent Ferrier, L. Leroy, Massena LAB, MB&F, MeisterSinger, Montblanc, Norqain, Oris, Seiko, Vulcain, and Zenith.

Watchpro.com has an article from September 27, 2021 titled: Pent-up post-lockdown demand eases as retail growth slows. The article suggests that the initial surge (which was highlighted by Berkshire Hathaway HomeServices earlier) is not a permanent trend. Their view is that the interest from collectors and buyers is unable to maintain the auction or retail performances. People returning to stores in greater numbers was at a higher rate from pre-pandemic numbers. Factors that Watchpro attributes to these trends are the wedding season being in full swing, and the need for office formal wear as people return back to the office.

A constant steady trend for the last five years is the trend of independent watchmakers. Berkshire Hathaway HomeServices expressed that the surge in luxury watch sales may remain once the pandemic ends on a conditional basis. That is to say that the trend of annually younger collectors and enthusiasts continue to pursue a status symbol.

And before thinking that Warren Buffett’s own Rolex Day-Date played a huge role in this, it is probable that Buffett himself has not even read this full luxury outlook report. That said, Berkshire Hathaway’s full list of companies includes smaller luxury brands such as Ben Bridge Jeweler, Borsheims Fine Jewelry, Helzberg Diamonds, NetJets and more.

(Image below courtesy of Heritage Auctions)

Rolex Day-Date