One premise of economics is that human behavior often follows certain predictable paths. It isn't always the case, but it often is. For example, every semester I poll my students with a certain question and every semester the results of the poll are perfectly predictable because there are two laws in economics which almost always hold. Of course, I would be hypocritical if I didn't also follow a predictable path and I'd venture to say that I follow a law of behavior that applies to almost all empirically-oriented economists. It is this: when we see a table of data we want the spreadsheet.
Yesterday, I virtually attended a talk hosted by the Horological Society of New York entitled "The Royal Oak: from Iconoclast to Icon" delivered by Audemars Piguet's Heritage and Museum Director (Sebastian Vivas). A fairly rare red-dialed Audemars Piguet Royal Oak I photographed at a Phillips Auction preview.The Royal Oak is a horologically famous watch design celebrating its 50th anniversary this year, you can read more about it here. Sure enough, Mr. Vivas presented a slide during the talk and I immediately wanted the spreadsheet.
Unfortunately, a data-driven economist in these circumstances ultimately ends up doing fairly khafkesque work. That is indeed the case when it came to the Royal Oak sales slide. At one point I kind of chuckled at the fact that somewhere in Le Brassus, Switzerland on a bit of computer memory, there is a spreadsheet of numbers that was converted into a slide deck. The deck was put up on a screen in New York City, converted into bits that went across the internet via Zoom, landed on my computer monitor, I captured the picture, processed it with image manipulation and OCR, and now I have the spreadsheet which still sits on the drive in Le Brassus. The norm when it comes to communicating numbers seems to involve entropy that often has to be reversed.
In any event, I decided to offer the resulting spreedsheet for download, it is available here. I'd just kindly ask that if you use this data, you thoroughly document the source to include Mr. Vivas, the talk at HSNY and this humble blog. Throwing a few links back to these sources would undoubtedly be appreciated.
I also wanted to offer a somewhat barebones analysis of the data and my own interpretation of the numbers. Sales trend of all AP Royal Oak reference 5402. Let's begin with the figure presented here. Some have claimed that the Royal Oak didn't find many buyers when it was introduced. The data certainly doesn't match this claim. A sale of almost 500 examples during the first year of availability does not strike me as a lukewarm reception given that AP was a fairly small company in 1972. There was double digit grown in sales (between 10 and 17%) in '73, '74 and '77. There was a decline in Royal Oak demand in '75 and '76, but these were the years when the OPEC-induced energy crises was really starting to bite. It isn't surprising that sales of a watch, or anything really, slumped in those years.
In 1977, sales of steel Royal Oaks decreased by an additional 15% but AP found a solution to this retrenchment in demand: make the watch in precious metals. This is apparent in the next figure, presented here. Sales of AP Royal Oak reference 5402 broken down by metal. In '77, the sale of two-tone (steel and yellow gold) and yellow gold references allowed total 5402 sales to resume double-digit growth, which lasted one more year. Following the 1978 peak in 5402 sales, demand declined year-in and year-out. By 1990, sales were hardly noticeable. However, the Royal Oak Offshore was just around the corner which was then followed by many additional riffs on the theme. AP thrived in no small measure due to the enduring popularity of Royal Oak variations.
One final note on this data: there is one lonely 5402BC which was sold in 1972, roughly five years in advance of the other precious metal examples. The provenance on this progenitor white gold Royal Oak is undoubtedly fascinating. We can only hope that in future years the story is told.
News recently broke that watch brand Rolex was on the receiving end of a €91 million fine levied by French authorities. A view of Rolex's offices in France. Source: Google Maps. Generally, the headlines ascribed this fine to Rolex's alleged practice of prohibiting online sales of its watches. However, I've looked closely at the situation and I don't think those headlines are completely accurate (although they're probably what French authorities would want you to believe). I came to this conclusion after reading a Google translation of a 134 page report issued by the French Competition Authority on December 19, 2023. Generally speaking, such documents do not make for engaging reading. However, for those who know how successful Rolex has been at maintaining a comparatively high level of corporate secrecy, the French report provides a compelling and rare insight into some specific aspects of the brand's business. It is these insights which lead me to conclu...
What it might look like if Aragon and Argon watches actually went to court over the trademark dispute. My prior post described a disappointing development for those collectors hoping to acquire an Argon Spaceone watch via the brand's Kickstarter campaign. The campaign had reached over $1 million in funding when Kickstarter's management stepped in and froze the whole thing over an "intellectual property dispute." When I posted about this development on Instagram , Hodinkee editor Tony Traina noted in the comments that another brand, Aragon watches, had filed a complaint with the US Patent and Trade Office (USPTO) back in April (thanks Tony!). Argon's account replied and indicated that they had already filed a registration for their brand name and they were retaining counsel in New York City. On Tuesday, June 27 of this week, more details were offered via a lawsuit filed in the US District Court for the Southern District of Florida. The case is filed on behalf...
There comes a moment in the servicing of a watch that is probably easy to miss among the hundreds of steps required to remove a movement from a case, inspect the parts, repair anything amiss, lubricate all the pieces, and put the whole thing together again. A watch that Rolex's investigator bought at Beckertime for approximately $4,500. The lawsuit refers to this as "Counterfeit Watch One." That moment is when a watchmaker takes the dial and reattaches it to the movement. There is nothing particularly unique when it comes to the tools required or the tasks involved in this step. Instead, what is unique about this moment is that the watchmaker holds in their hand a mark that is not the property of the watchmaker and it is not exactly the property of the watch's owner. In the case of Vacheron Constantin, that mark is a Maltese Cross. For Audemars Piguet, it is the brand's initials. When it comes to Rolex, the mark is a widely recognized crown. If the reassembly...
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