Rolex CEO Jean-Frédéric Dufour Cautions Against Viewing Watches as Investments
Luxury watches have long been sought after as valuable assets, with prices of brands like Rolex, Patek Philippe, and Cartier closely followed as they fluctuate with people’s appetite for high-end spending. However, Rolex CEO Jean-Frédéric Dufour believes it’s risky to think of watches as investments that frequently change in value.
In an interview with Swiss outlet NZZ, Dufour stated, “I don’t like it when people compare watches with stocks. This sends the wrong message and is dangerous.” He emphasized that Rolex’s watches are more akin to “products” than investments.
Despite the common perception of watches as investment pieces, Callum Patrick, cofounder of luxury watch retailer Chronofinder, told Fortune that watches are ultimately like “trophies” with a financial value attached to them, and any investment potential should be considered a bonus.
Luxury Watch Prices Plummet Amid Economic Pressures
Dufour’s comments come amidst a period of tumult in the world of watches, as high interest rates and economic pressures have led to a fall in prices of luxury watches by brands like Rolex, Patek, and Audemars Piguet. The price tag on secondhand watches has plunged nearly 40% in the last two years, according to London-based Subdial.
In response to the boom in secondhand watch demand, Rolex began issuing certificates marking the authenticity of their watches in 2022. The following year, the company made a surprise move by buying watch retailer Bucherer, signaling a shift in how the top-tier watch brand will reach customers.
Rolex Remains Dominant Despite Industry Challenges
Despite the industry-wide slump, Rolex has maintained its position as the dominant force in the world of watches, with record sales of $11.5 billion in 2023, up 11% from the previous year, according to data compiled by Morgan Stanley and Swiss firm LuxeConsult.
However, Dufour acknowledged that this year will be “challenging” due to elevated input costs and reluctant consumer spending. He emphasized the importance of avoiding discounts, stating, “When markets weaken, as is the case now, retailers come under pressure to cut prices. This is extremely problematic because discounts damage emotional products like ours.”
Dufour believes that the “very established and very powerful” brands are the ones that remain in shoppers’ minds and perform best amid market volatility. He noted, “You can also see this from the fact that the resale value of these watches does not decrease.”
As the luxury watch industry navigates the current economic landscape, Rolex’s CEO urges caution in treating watches as investments and highlights the enduring value of established brands.
Reporter: Chris Roh, Treasure News
