What the wild journey of a $100,000 watch can teach us about global markets

by | Oct 21, 2022 | Top Stories

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The Bulldog watch, released by MB&F in March 2020, retails for $100,000 and sold out almost immediately.

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MB&F

The Swiss take their watches very seriously. Strolling around Geneva, Switzerland’s watch-making capital, there are Rolex, Patek Phillippe, and Tag Heuer stores on nearly every block, usually with a little gathering of people standing behind velvet ropes waiting to get in… like a club. A very expensive club. These watches (or time pieces, as everyone in the industry calls them) traditionally appealed to older, wealthy collectors–connoisseur types who were willing to drop thousands of dollars on a watch. This was a small, sleepy, very select industry. But a couple of years ago, luxury watches got swept up in a strange combination of global events and market fads that took it on a wild ride. Fueling that wild ride — something one would probably never associate with an artisanal industry dating back more than four centuries: cryptocurrency. More on that later.

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A line of people waits to enter a Rolex boutique in Geneva, Switzerland

Stacey Vanek Smith

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Stacey Vanek Smith

Watchmakers at Work In the small Geneva-based workshop of luxury watch brand Maximilian Büsser & Friends or MB&F, a row of watchmakers is hunched over wooden desks, squinting through black jeweler’s loupes at tiny networks of gears and springs. Henri Porteboeuf, 36, is using a tiny vice to press yellow jewels the size of poppy seeds into a metal strip that will decorate a watch face. He says to do this kind of intricate work requires total focus. “It’s the flow,” he explains. “I think that’s how you say it in English. I like the flow.”

To help get into the flow, Porteboeuf listens to jazz on his iPhone. Other than that, though, his job doesn’t look much different than it would have more than 400 years ago, when the Swiss watch industry started. Today he’s working on a special watch, the Bulldog.

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Henri Porteboeuf, 36, watchmaker at MB&F, likes to listen to music while he works.

Stacey Vanek Smith

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Stacey Vanek Smith

A wild looking watch The Bulldog is a wild looking watch–a colleague of mine said it looks a little like the Millennium Falcon. The face is encased in a glass bubble, it has spinning domes that glow in the dark, little metal “legs,” and even a tiny set of metal jaws that opens and closes. However, there’s nothing tiny about the bite the Bulldog will take out of your wallet. It retails for $100,000. It’s one of the company’s best-sellers and it almost never saw the light of day.

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The Bulldog mechanical watch from MB&F retails for $100,000 and has tiny jaws that open and close.

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MB&F

Is this good timing? Charris Yadigaroglou is head of marketing at MB&F. He says the Bulldog had been in development for years, and had long been set to launch in March 2020. Just as they were getting ready to release the watch, lockdown started shutting cities down all across the world. “We debated endlessly whether we should launch it or not,” said Yadigaroglou. “It’s like, the world was collapsing and are we going to launch a crazy watch called the Bulldog that costs $100,000? Right now? Is this good timing?”
As it turns out, they couldn’t have timed it better. The Bulldog sold out almost immediately. Even as COVID was shutting the world down, the luxury watch industry was having a renaissance. When the market really took off For decades, luxury watches had been a shrinking market mostly catering to older, wealthy collectors. But in the early part of the pandemic, even as millions of people were losing their jobs, another group was coming into enormous wealth: cryptocurrency investors. “They started to buy watches and that’s when the market really took off,” explained Oliver Müller, an analyst with LuxeConsult, who advises banks and collectors on luxury watches. “I can tell you, never ever in the 25 years I have been in the watch industry, we have never experienced experienced such strong growth,” said Müller. This is any industry’s dream: an influx of young, wealthy customers sparking a global craze for your product. Demand took off… and almost immediately hit a ceiling. Watchmaking is slow Here’s the thing about luxury watchmaking: It’s slow. Each watch has hundreds of parts, many sourced from different, independent makers. Each part is meticulously checked for quality by a special team before it goes to the watchmaker to be assembled by hand.

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Jennifer Longuepez is part of the quality control team at MB&F, it is her job to check each component of a watch before it is assembled.

Stacey Vanek Smith

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Stacey Vanek Smith

Demand for luxury watches was skyrocketing during the pandemic, but supply couldn’t rise to meet it. The little artisanal industry was overwhelmed and couldn’t meet the moment. This seemed tragic: the luxury watch industry had this amazing growth opportunity but couldn’t grab it because the very thing that made the watches valuable also made them difficult to mass produce. 12 year waiting lists Even the big players like Rolex and Patek Phillippe started selling out of everything. A lot of the most desirable, classic watches (known as “Grail watches”… as in The Holy Grail) sold out many times over. “We had waiting lists of 5, 6, 7, 12 years,” said Müller. Waiting lists like that will often discourage would-be buyers. But in the case of luxury watches, the waiting lists drove them into a frenzy. “Rich people, if you tell them they can’t get something, they’re ready to pay any price to get it,” said Müller. The price goes up and up When a lot of pe …

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