Editor’s Note
The luxury watch market’s post-pandemic correction signals a return to long-term fundamentals after an exceptional boom. This analysis examines the sector’s cooling trajectory.
After a COVID-era surge, the luxury watch market is mired in a hangover that could last years. High-end watch prices have tumbled from their latest peak, with most brands seeing a dip. Analysts say the pandemic watch boom was a once-in-a-lifetime event that’s unlikely to be repeated.
After what looked like an unstoppable rally in watch prices at the tail end of the pandemic, the market for high-end timepieces has cooled. The corner of the luxury consumer space could also be sluggish for years, with low single-digit growth that pales in comparison to the pandemic era, industry analysts told Business Insider.
That relative decline has been triggered by a few factors. While people have less time and money on their hands, less flashy, more austere fashion trends rooted in “Quiet Luxury” are also having an impact, watch industry insiders said.
Secondhand prices in the luxury watch market have dropped sharply from their highs during the pandemic. The WatchCharts Overall Market Index, a gauge of secondhand luxury watch prices, is down 33% from its peak just after the pandemic, though it is up about 5% over the past year.
High-end watches were the worst-performing luxury category last year, according to Claudia D’Arpizio, a partner at consulting firm Bain & Company.
Revenue growth in the broader online jewelry and watch business has collapsed from its 2020 peak. Growth is also expected to remain near zero through the end of the decade, even lower than the average growth rate in the years leading up to the pandemic, according to an estimate from IBISWorld.
Oliver Müller, a longtime consultant in the luxury watch business and the founder of LuxeConsult, said he believed 2021 and 2022 were likely the best-ever years for the watch market, with the industry unlikely to achieve a similar growth rate in the foreseeable future.
He attributed the post-COVID bubble to a unique cocktail of circumstances that pushed newcomers into the watch market — mainly, people having extra time on their hands to get into new hobbies, and the fact that crypto markets and meme stocks were delivering big gains in very little time for many traders.
Andrew Morgan, another watch consultant, said he believed the market reached its zenith in 2022.
The pandemic-era watch vibe was marked by “flashy” styles and special edition models that flew off the shelves, D’Arpizio said. The buying spree was largely driven by ultrawealthy clients who were sitting on big gains on their investments and were willing to splurge.
Many speculators in the market at the time also seemed to be interested in integrated or stainless steel sports watches, styles that tend to be associated with “over wealth.”
A few things changed.
Crypto markets crashed. Bitcoin entered a brutal bear market in 2022, a decline that hurt crypto investors who were also in the business of flipping luxury watches, Müller said.
US consumer slowdown. A combination of return-to-work, people having less time on their hands, a spike in the cost of living, and new developments like tariffs has consumers less willing to shell out on wristwatches, Bain’s D’Arpizio said.
China’s slowing economy. China, one of the world’s largest luxury consumers, sank into a property crisis and recorded its worst GDP growth rate in about half a century in 2022.
For luxury watches, it seems to have kicked off a new era: one defined less by excess and more by refinement, D’Arpizio and Morgan said.
Though there are exceptions, the worst-performing models on the market tend to be integrated and stainless-steel sports watches, Morgan said. While models from leading brands are still reaping a “mild” return on the secondary market, models from most other brands face a “significant depreciation” the minute they’re sold, he said.