RECESSION AND THE WATCH INDUSTRY?

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koimaster
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RECESSION AND THE WATCH INDUSTRY?

Post by koimaster » November 30th 2020, 11:27pm

As the global economy faces a recession once again, those of us in some way invested in the watch industry are beginning to wonder how it can affect our business and our hobby. On March 30th, 2020 the S&P 500 sat at $2,565.91, the Dow Jones was at $21,699.45, the Nasdaq was at $7,588.65, and the TSX was at $12,615.24.

In general, the consensus is that the dips in productivity and consumption due to the coronavirus outbreak are the cause of the economic recession, but in some cases, like Canada, some theorize that the outbreak was simply a catalyst for something that was long coming. As far as the watch industry goes, watches and their derivatives are luxury goods – and as such have elastic demand. In other words, watches are non-essential goods (at least to most people) and people should buy less of them in a recession. This is mainly the reason for which people have already started to notice (or rather be hopeful for, dips in the prices of vintage watches, Rolexes, and others – for example), as vintage watch/grey market dealers find themselves first in line. The questions for us to answer today are two-fold: how have recessions (the Great Depression and the Great Recession) affected the watch industry in the past and how could a global recession affect it today?

There are two recessions everyone knows and they ironically have very similar names, the first being the Great Depression which lasted from 1929 to 1939, leading into World War II. And the second was the Great Recession from 2007 to 2009.


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Re: RECESSION AND THE WATCH INDUSTRY?

Post by DocKlock » December 1st 2020, 7:50am

Just my two cents.
I'm 76, live by myself, house paid for, car paid for and I have no debt, other than normal bills.
That all being said, I have 'pulled in my horns' when it comes to buying anything of substantial value/cost.
With the wacko governors shutting down their states -- thereby assuring they will be in deeper debt with little sales taxes generated; schools going to "virtual learning"; landlords not being able to collect rent and can't evict non-payers; people out of work on a grand scale, etc. etc.
Government printing money 24/7; 365. Most news channels selecting the "news you need to hear".
Throw in the uncertainty of the new president, his/her cabinet, WH mouthpieces and direction the 'far left' may steer and you have a "perfect storm" for either a depression or a recession.
Will the Covid vaccine work?? Or will the disease mutate into a variety that the new vaccines won't be as effective??
So, one of the last things I need right now is another watch.
Maybe it's just me, but, I'm going to 'hunker in the bunker'.
And NO, I'm not a gloom and doom guy, but I do have common sense.
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Re: RECESSION AND THE WATCH INDUSTRY?

Post by biglove » December 1st 2020, 1:52pm

^^^We are 52 and both work full-time in healthcare.

Bills get paid, bought a new house 3.5 years ago. We have taken advantage of interest rates to decrease our monthly bills by $700+/month. We are well insured and hope we can survive this to grow old together.

We have enough food on hand for several months and space to take in our kids/grandkids if that were ever necessary.

But we spend our spare cash on whatever we want. I refuse to be a miser and will buy what we want as long as we can afford it. You can't take it with you and if this pandemic has taught me anything, it is that any of us may be leaving quicker than we had ever thought.

We eat steak frequently, we buy our kids treats and give them cash. We help those less fortunate and we help out neighbors, co-workers and friends.

You only live once.
My best friend from college shared his secret to his huge financial success, "I fell out of the right vagina."

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Re: RECESSION AND THE WATCH INDUSTRY?

Post by 3Flushes » December 1st 2020, 2:38pm

I do a lot of the things Doc does - I try to do the things I need to do to stay well and to protect my family, but, I'd hate to catch this bitch, or CVA out, or, whatnot, and pegger with a bunch'a my old man money in the bank saved for nothin'. Right now I'm treating myself to some new glass to better document our times for those to come. I'm certain I'll find a watch I can't live without after that, ever on the lookout for a couple, but I can't do both- and depending on aq couple'a choices in glass, the watches may have to be chea reasonable.
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Re: RECESSION AND THE WATCH INDUSTRY?

Post by TemerityB » December 2nd 2020, 9:27pm

From what I've been reading of late, just a handful of the most popular luxury brands, such as Rolex, are hot as well, almost insanely (this is true: My favorite pre-owned store locally got ahold of a bunch of new Rolex models somehow, which means you don’t get the authorized Rolex warranty; even so, they’ve been selling and getting $10,450 for new 41mm Oyster Perpetuals – which is only $4,550 over list price!) But that is just a handful of the really collectible stuff that’s actually selling. Breitling is a mess, and the others of that status are just laying around collecting dust.

Things are so desperate that brands like Piaget, Panerai, JLC, Vacheron Constantin, and Grand Seiko have really turned on a dime, shifting their focus (finally) to direct online sales. From what my friend at the big T tells me, salesmen are practically blowing customers to get them to buy as much as a Tissot or Baume & Mercier, the middle tier.

Meanwhile, Apple Watches have never been hotter. They're cheap, and they work.

So many people have put their lives on hold because, well, they have to. How this affects the watch industry, as much as I enjoy it? Frankly, there are so many bigger fish to fry right now, and I don't give a rat's ass. I don’t like to see anyone in any business suffer, but when so many families are suffering like never before either through sudden unemployment or illness, I’m finding it really hard to care even slightly about Nicola Andreatta’s P&Ls. Those guys in the ties at the retail shops struggling not to get fired is who I'm concerned with... not to mention watch buyers pushed to the sidelines thanks to pure need in their lives.
Best of luck to all my longtime friends here. Please stay safe, always.
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