Jean-Fréderic Dufour, Rolex SA CEO, manifested concerns about the tendency to treat luxury watches like financial investments, a stand that comes to light due to the speculative increase experienced during the pandemic. In a rare dialogue with the Swiss magazine NZZ, Dufour emphasizes the risks that come with comparing watches to stocks, especially because this perspective distorts the real value and the essence of luxury watches.

The pandemic era experienced an unprecedented boom in the used luxury watches market, with brands like Rolex, Patek Philippe, and Audemars Piguet witnessing growing prices due to low interest rates and the cryptocurrency boom. However, this bubble suffered a significant recession, with the Bloomberg Subdial Watch Index indicating a 40% drop in the most bought models in the last two years’ prices.

Despite Rolex’s dominant position in the Swiss watch market, achieving more than 10 billion Swiss francs in sales in 2023, Dufour foresees that 2024 will be a challenging year for the industry. He predicts that the slowdown will affect particularly the smaller watch brands, which may not handle the sale fluctuations as robustly as established names like Rolex.

Dufour points to several factors that contribute to the industry’s pressures, including the strength of the Swiss franc, the increase of the material costs like the gold, the increase in interest rates, and the tense geopolitical atmosphere, all the which lower the enthusiasm of the consumers. He also highlights the detrimental effect of discounts on luxury brands, noting that this damages the emotional value associated with these high-quality products.