Watches to look forward to

This steel Seiko SLA017 is a reinvention in the Prospex collection of their first (and Japan’s first) diver’s watch from 1965.

Oris rereleased a watch that they made a century ago.

We are going into the second half of the year, and we have seen big changes in the watch world. Last year saw some significant upheaval, such as when the Hong Kong market lost its strong position in terms of being the biggest and most important market in the world. Remember though that a lot moves through the HK market outwards, so clearly these aren’t just buyers living in the former colony. Also, note that it is in the interests of distributors and retailers to have as many sales as possible attributed to them so that they can get a better allotment of pieces. More boutiques, for example, should mean better access to the special limited editions and such. Anyway, Hong Kong was moving down. The United States was actually moving up. Europe was in general down. The Philippines? Everyone’s baby, a small market that was growing at a very impressive rate. This has its risks though, everyone moves quick money (in terms of financial markets and investments) in but that money can move out and the process can mess with consistency.

This year we are hearing unconfirmed news that HK has turned around a bit. We can’t be sure of course, but anecdotal comments seem to be supporting this. On the other hand, the Richemont Group (Richemont SA is owner of brands like Cartier, IWC, Vacheron Constantin, A. Lange & Sohne, Mont Blanc, etc.) as a publicly traded company must make certain public declarations, and has recently released a report declaring a 4% drop in sales and a 46% drop in profit. We think the the first figure is pretty conservative and even the second surprisingly low. The company also declared that their stock price dropped 5% but their dividends increased by 6%. All this occurring not just during a tumultuous time for the industry but also at a time when the company had a buy-back program for their shares of stock (which just ended.) There is no question that the company has strong leadership as well as a strong position in the market, so all this may well be seen as a buying opportunity. Which incidentally we have been saying about the right watches as well for the last year or so.

In the Philippines we can look at two brands and how they have moved over the last few years. Casio and their G-Shock became a big mover, with buyers and collectors coming more and more from those that never before paid attention. The secondary and gray markets exploded and prices shot up. Then they somewhat corrected, but the end result is that more people are paying more attention to what’s on their wrists. This happened again, both locally and globally, with Seiko. Note that Seiko was pretty far behind in terms of those that appreciated the brand and that was great for those of us that really did see it for what it was. Seiko has caught on, and the moves last year telegraphed those for this year. Their model lines are now positioned for growth far more effectively, and their prices have begun to rise. There have been warning signs that Seiko prices were moving higher more than they should, and local groups even began chastising people for making prices spike somewhat artificially as people were looking for profit rather than piece. I also warned of this, but at the same time noted that certain pieces were truly undervalued and should be snapped up whenever possible. Then Seiko made its moves and formally announced changes in a very entertaining press conference at Baselworld. So yes they basically moved the price bar up themselves. They are in a position of being a value brand with still unappreciated strength. And they are tapping both the collectors and those that want to jump in on the market. For those of us that spent much time before in watch shops and repair shops, the fact that the generally lethargic local Seiko shops started to display Grand Seikos was actually not believed by most of us until we saw it with our own eyes.

Mont Blanc released a Limited Edition Timewalker Rally Timer 100.

All this is positive for the industry, because it is creating appreciation and demand at basically the beginner level but it is starting with brands that have real value. Having said that, there is the saying that once things go mainstream they go downhill (in the finance world, the story of shoeshine boys and hotdog vendors who start entering the stock market as a precursor to a fall.) But again, these aren’t marketing-only brands that have jumped in to make a quick buck. They have been around forever, they stick to their core idea and move somewhat slowly but surely, and the basic product is good and solid. So on one hand everyone that knew nothing a year ago is going nuts over the latest PADI this or that, the truth is that they are all pretty nice watches and priced less than a strap or service session for many upscale brands. This does, in our opinion, really provide the building blocks for a pleasant horological future because it concentrates on the areas, the watches and the consumers that too many brands forgot about for a while.

IWC is going back to the conservative and classical

This Grand Seiko Platinum re-edition