Horolonomics

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...

Raleigh Iron Works rendering. Photo credit Jamestown LP. Luxury watch maker Audemars Piguet has announced a new North American service center in Raleigh, North Carolina. The brand plans to spend $22 million on the new facility and it will create 105 new jobs in the state's capital. The service center will be located in Raleigh Iron Works, a new mixed-use development in downtown Raleigh. Watchmakers will be able to enjoy a variety of neighboring businesses, including a brewery, restaurants and a gym. There is also a slide from the top of a staircase. Further afield, Raleigh is part of the "research triangle" region consisting of three world-renowed universities: North Carolina State University, Duke University, and the University of North Carolina at Chapel Hill. Wake County Economic Development offered a quote from outgoing Audemars Piguet CEO François-Henry Bennahmias regarding the new service center: "'When our employees visited Raleigh and the Triang...

This week, Audemars Piguet released the Royal Oak Perpetual Calendar Openworked limited edition (reference 26585CM.OO.D301VE.01) in collaboration with Cactus Jack, a music label founded by artist Travis Scott. The Cactus Jack "takeover" of Audemars Piguet's NYC Boutique. It was in this space that the most recent collaboration was released. The timepiece is priced at $201,000 with a 41mm case in brown ceramic. There are various bold design elements at play in this timepiece. For example, the "stitchmarks" on the moonphase complication are an embellishment that evokes the Cactus Jack "Smiley Face" emblem (they're also reminiscent of the animated character Jack Skellington in Tim Burton's movie A Nightmare Before Christmas ). The dial of the AP X Cactus Jack collaboration, note the "smiley face" moonphase and the handwritten style of dial typography. An additional distinguishing design element is the dial's typography. It h...

Over the past two days I've heard rumblings of a somewhat unprecedented event when it comes to watch auctions. A screengrab Instagram stories and a WatchPro forum discussion revealed that a Christies auction in Geneva started an hour late. The auction in question involved timepieces from a single owner: consignor Mohammed Zaman. When bidding began, the reserve price for watch lots was reset at a higher level, spreading confusion among participants. Hodinkee's Tony Traina has a pretty good discussion of the controversy which includes official statements from Christie's. (Note to readers: this post is a little light on imagery because the material below deals with some fundamental finance issues). I'd like to translate the "Christie's surprise" from the language of the auction world to the language of finance. Yes, you may now point back to my prior post about how watches are too often treated like financial instruments when they are not. But in thi...

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...

When Ben Madison chose Big Daddy Watches as the name of his business, he unknowingly described the conditions under which preowned watch dealers operate (Ben Madison is a fictional name to protect the identify of someone who is presumed innocent). An exhibit from one of the lawsuits showing trademark-infringing items which accompanied a counterfeit watch sale. Two recent lawsuits make it very clear: there is a Big Daddy, named Rolex, that stealthily watches independent watch dealers. Until I read the lawsuits, one filed against Madison and another filed against Dan Jenkins (also a fictional name), I had no idea how much effort Rolex expends when it comes to fighting fakes in the preowned market. So, I thought I would share what I learned. The Madison and Jenkins lawsuits show that there are at least two fronts along which Rolex fights counterfeits. In many ways, Rolex employs similar tactics regardless of the nature of the counterfeit. But there are also important government alli...

Among many avid watch collectors, the term "in house movement" seems to elicit eyerolling disdain. Pieces of an assortment, including balance spring, from a non-Swiss movement. There is a sizeable perception that "in house" is, in fact, nothing more than an unnecessary marketing ploy designed to tease more money out of the wallet of buyers (by way of definition, an "in house" movement means that the mechanism inside a watch was predominently manufactured by a brand itself, kind of like "we make our own bread" at a restaurant). I'll confess that I'd begun to think similarly, that is, until I read a 66 page report posted by the Swiss Competition Commision on May 10, 2023. Yes, this is the kind of thing an economist finds interesting on a weekend, or at least this economist. Before we get into the details of this report, in the interest of full disclosure I should say that the original document was in a different language: lawyerese....

They say a picture is worth a thousand words, but I'm not sure it is worth a thousand points of data. My Mission to Mars MoonSwatch and Fifty Fathoms homage by Steeldive. The pictures from the last 10 days or so suggest that Swatch has delivered another blockbuster by way of their most recent "collaboration" with Blancpain, this one officially known as the Bioceramic Scuba Fifty Fathoms (SFF). Social media served up numerous photos of queues outside of Swatch stores ahead of the SFF launch on September 9. Plenty of aspiring owners waited long hours for their chance to buy the newest accessible riff on a design that typically commands a price in the five digit range. I'll admit that the photos convinced me that Swatch has a replicable formula for developing watches that are so in demand they can be flipped for a sizable premium. As I've done before, though, I prefer to ask the data what, exactly, is going on with the release of this timepiece. And the data ...

Last week, news broke in a local newspaper that Timex Group USA conditionally sold their headquarters in Middlebury, Connecticut for $7.5 million. An older Timex that belonged to a family member. The buyer plans to build a "food distribution center" on the property, but the sale will only go through if certain wetlands permits are approved. Moreover, "On May 10, the Middlebury Conservation Commission approved the permit for a food distribution center consisting of a 540,000-square-foot building and a smaller 180,000-square-foot building on a 111-acre site consisting of the 93-acre campus of the Timex property and a neighboring 18-acre property on Southford Road belonging to another Drubner family partnership." Further complicating the matter is the fact that a politician elected to state government managed to slip a clause into a two year budget bill making it even harder for the potential buyer to build the food distribution center. Said politician lives acros...

A Rolex-Bucherer spoon, these were given out to accompany Rolex watch purchases. Rolex announced its planned acquisition of retailer Bucherer last week. In this post, I'd like to offer some analysis, contextualization and possible consequences of the development. In hindsight, the acquisition makes perfect sense and I'd like to explain why that is the case. To begin, let's remember how the modern Rolex brand was established. A schematic illustrating the earliest era of Rolex's business organization. Rolex co-founder Hans Wilsdorf passed away in 1960 without any direct heirs. Rather than sell his company, he left it to a charitable foundation in Switzerland. Rolex is a non-profit. In their press release announcing the acquisition of Bucherer, Rolex specifically mentioned that the retailer's current owner, Jörg Bucherer, does not have any direct descendants. This was not some toss-away line. The brand is pointing us to the fact that, from this perspective, Bu...

Photo of a Rolex Deep Sea which I took at the Beyer museum in Zurich. If I told you there is a switch that Rolex could flip and immediately hamstring the American secondary watch market would you believe me? Frankly, I wouldn't have believed this myself until I stumbled upon a disclaimer in a Sotheby's catalogue from 2008. It read: "Important Notice regarding Importation into the United States of Corum, Rolex, Piaget or Franck Muller Watches. Sotheby's cannot arrange for the delivery of Corum, Rolex, Piaget or Franck Muller watches to the United States because U.S. laws restricts the import of Corum, Rolex, Piaget or Franck Muller watches. The curiousity-inducing text from a vintage Sotheby's catalogue. The buyer or a designated agent may collect the property in the country of sale." I thought this was an extremely odd restriction which, frankly, I had never heard of before. Restrictions on international flows of goods are not, themselves, rare. Quot...