Passing the test of time

Most don’t deliver great investment returns, and a raft of digital developments continue to challenge their standing, but demand for high-end wristwatches continues to grow. So what’s the appeal of watches to the wealthy?

Picture the scene. It’s 1962. A handsome man is walking along a Caribbean beach talking to a bikini-clad blonde he’s just met. “What’s your name?” she asks. “James,” he replies. They are actors Ursula Andress and Sean Connery, starring in the classic James Bond movie Dr No. And, prominent on Connery’s wrist throughout the scene, is a Rolex Submariner watch. 

From iconic films to ads in glossy magazines and collaborations with daring sportsmen, the world’s top watch brands have long been adept at turning time-telling devices into desirable luxury items. 

Even in an era where our phones, computers and smartwatches tell accurate time, demand for high-end mechanical watches continues to grow – the sector was worth $6.9bn in 2018 and is expected to expand in the coming years.

So how did luxury mechanical watch brands – think Rolex, Patek Philippe, Cartier, Tag Heuer, Breitling – become such a must-have item that people are willing to spend anything from £3,000 to more than £50,000 on them?

Should they be treated as an investment – like a bottle of fine wine or a piece of art? And what is the future for these mechanical devices? 

Story of the wristwatch

For millennia, people have tried to measure time – the earliest attempts to do so involved sundials, water clocks and hourglasses. Mechanical clocks became increasingly common from the 14th century and were gradually miniaturised over the next 200 years. 

By the 16th century, pendant time pieces were popular among aristocrats, although they were often highly inaccurate and were largely treated as jewellery. Later, pocket watches were popularised, after Charles II of England introduced a fashion for waistcoats. Ornamental pendants were flattened and curved to fit into a pocket. 

There are various claims about who first strapped a watch to an appendage, but many historians say that the first wristwatch was created in 1812 for the Queen of Naples. 

For much of the following century, wristwatches were a feminine item. But this gradually changed as military men began to realise the benefit of a time-telling device that they could check while riding a horse and swinging a sword. 

It was the First World War that really popularised wristwatches among men, however. All officers were expected to wear a wristwatch to coordinate attacks – if you saw the recent World War One film 1917, you may have noticed characters wearing them.

After the war ended, soldiers kept their military issue timepieces, and wristwatches became the norm. 

Over the next few decades, mechanical watches became ever more sophisticated and accurate, with various household-name brands leading the way in design and innovation. 

Impressively, the most high-end products rode out serious challenges from new technologies – be that the arrival of cheap, accurate electronic quartz watches in 1969 or the explosion of digital devices at the turn of the century. So how can this enduring interest in mechanical watches be explained?

“I personally know someone who bought a vintage Rolex for himself, and who now claims it was left to him by his grandfather,” recounts Nastaran Norouzi Richards-Carpenter, Director of an MA in Luxury Brand Management at Richmond University. 

For Richards-Carpenter, “status is the main factor when it comes to purchasing a luxury watch”. The world’s best-known watch brands have developed highly successful branding models that ensure their products remain desirable – and motivate people to do things like pretend a watch they’ve recently bought was part of an inheritance. 

She notes that there are subtle differences between the ways that specific brands market themselves. “If you look at Patek Philippe’s branding, they strongly emphasise the idea of family and ‘old money’.

"Compare this with Rolex, which tends to associate itself with a successful person and meritocracy. Even someone with David Beckham’s background, for example, can wear a Rolex as a symbol of their achievements [Beckham has appeared in Rolex adverts].” 

The right connections

As with other luxury items, Richards-Carpenter explains that individuals will choose watches based on the kinds of people with whom they wish to be associated. For example, Cartier has had a long association with the early era of flight, decking out pilots with watches they could check while keeping their hands on the controls. 

For those who wish to associate themselves with deep sea divers such as Jacques Cousteau, a Blancpain FF would do. Or how about a Tag Heuer to recall the high-octane world of Formula 1? 

Richards-Carpenter also notes that there are two forms of luxury purchasing. In newly rich countries, conspicuous ‘experiential’ consumption is much more common – people want to experience the good things in life. More common in established economies is ‘intellectualised’ consumption, whereby people become fascinated with the heritage of brands. 

But what makes a Rolex or a Breitling a luxury watch, and a Casio an everyday purchase? Richards-Carpenter lists the ‘eight Ps of luxury’: performance, pedigree, paucity, persona, public figures, placement, public relations and pricing. If a watch ticks all these boxes, it is normally considered a luxury item. 

Beautiful things

There are plenty of reasons people buy luxury watches, but Jeffrey Chinn of Hettich Jewellers in St Helier reminds us that they are inherently “beautiful things”. 

Even in the digital era, high-end mechanical watches have inherent value. Companies making luxury watches employ master craftsmen who spend hours oiling, cutting and hand-polishing every single cog and mechanism inside the device. 

Often made from rare materials, new generations of watches are incredibly accurate, and they are constantly improving. “Today’s watches have fewer service intervals and longer warranties than ever before,” says Chinn. So you might not need to take a modern Rolex in for servicing more than once a decade. 

And for all the benefits of digital technology, our modern gadgets have far shorter lives than mechanical watches too. As Chinn points out: “If you bought a Rolex and an iPhone today, in 30 years’ time the Rolex would still be working fine; the iPhone would almost certainly have conked out.” 

A wise investment? 

There are a handful of classic luxury watches that have, over time, increased in value. However, few watch industry specialists recommend treating wristwatches as an investment. 

Ariel Adams, who runs review and analysis website aBlogtoWatch, advises: “Wristwatches as financial investments are not a wise way to make money; wristwatch appreciation is more an exercise in fashion and spending disposable income.” 

If one were to buy a watch as an investment, Adams says, you would probably have to buy a very expensive timepiece. He adds: “The risk of loss is very high as the secondhand market is highly volatile and based on emotion more than anything else.”

Chinn agrees. “We don’t recommend buying watches as an active investment. We sell products that people wish to purchase as a reward for an achievement or to mark a special occasion.” 

That said, he does believe that a large driver in the demand for luxury watches seen in recent years is linked to the sustained period of low interest rates in many markets. As a result, more people are putting money into stock, property and assets such as cars and watches. 

Watch the horizon

One of the great achievements of the watch-making sector has been its ability to reinvent itself. Richards-Carpenter points to new marketing techniques used by Rolex, which partners with online video game companies. When characters pass ‘levels’, they buy themselves a Rolex to celebrate, thereby introducing the brand to a new generation. 

She also notes that luxury watch firms have adapted to societal shifts. For the past 100 years, luxury watches were mainly marketed at men, yet manufacturers are now producing ever more designs for women – mirroring a rise in female purchasing power. 

Adams believes the outlook for luxury watches may actually be improved by the emergence of digital products such as the Apple Watch. 

“It is a boon for high-end luxury watches because consumers now have a renewed interest in what people have on their wrist,” he says. All of which suggests we’ll be wearing wristwatches for a long time to come. 

In Spectre, the 2015 James Bond outing, nerdy MI6 tech expert Q hands Bond an Omega watch. “Does it do anything?” asks Daniel Craig’s Bond, sceptically. “It tells the time,” Q replies. 

That’s true, but wristwatches seem to do a lot more than that too.