Cost vs Value and Horological Excellence. Your thoughts

In a recent email exchange with a collector on the new Vacheron Constantin novelties the subject on value vs. cost came up.

For him many people fail to separate value from cost and therefore think that the more expensive a watch the more value it has, setting aside the history, brand value and prestige of the brand. I would also add legitimacy of the brand.

This got me thinking on the general trend of the watch market today. More and more brands are coming out with complicated watches (mostly made by third parties) at ridiculous prices and trying to enter the high end haut de gamme market more through pricing than true workmanship and know how.

I won’t give any names but some brands have left me scratching my head wondering how the hell they can look the clients in the eyes and sell them such rubbish… rubbish which they certainly will not be able to service when the watch will come back for servicing (and believe me the said watch will come back for servicing much faster than the client and the brand had expected).

For me these brands are ONLY about cost and con their clients by selling them a status symbol, a perception of good taste and jet set glamour.

Then you have other brands who may be less flamboyant but who produce value (Vacheron Contantin, Patek, Lange and FP Journe immediately come to mind) value which can be based on their history, legitimacy, know how and prestige and this is nothing money can buy: value is granted by collectors and aficionados.

If someone is willing to pay over €1.5 million for the Tour de l’Ile or the Fouad pocket watch or $200,000 for a vintage Cioccolatone there must be a good reason for it. It’s the perception of value of that particular piece, that no matter how high the price the value is higher than the cost.

Tour de l'Ile (scan courtesy of Alberto Schileo)

Cost vs Value and Horological Excellence. Your thoughts

Cost vs Value and Horological Excellence. Your thoughts

"Ciocolatone" from late 50s (scan courtesy of Christies) 

Cost vs Value and Horological Excellence. Your thoughts



This led me to the definition of high end and haut de gamme watchmaking. Since by buying finished movements from a third party and recasing it with your name on the dial you enter the haut de gamme market then in what segment should those who actually deserve to be in the haut de gamme market be?

For me Vacheron Cosntantin is definitely worlds apart not only due to its history, know how and respect of their heritage and clients but also the care and audacity given to the designs. True Horological Excellence: that’s what makes the difference.

Thoughts?

being brought up by a businessman father and earned by my money the ..
04/25/2007 - 17:39

hard way, i learnt to be prudent with it. although i have a passion for watches, i couldn't simply buy anything i like. VCs,  Pateks, Breguets and some other established brands are value to me because their designs last through time, their vintages are still a library to many watches today in terms of design, movement and finishing. their established names also tend to preserve value pretty well in monetary term and design. i believe the the truth will prevail and time will tell if some brands are out to make a quick buck in the watch renaissance period we are in, though i enjoy the novelties, but i will not part will my hard earned on them because i could not afford.

Very intersting and true!
04/25/2007 - 18:08

Hi Alex,

After your words, what is there to be said ?

You definitely hit the nail on the head !

My questions is more, who buy those new, fantastic unknown brands?

I have never seen any of these new "marvels" in real life.

Perhaps they only exists in the magazines and some peoples brains.

If you "invest" a certain amount of money,

not as much as you, Alex, are talking about,

but any mechanical watch with some complication,

in precious metal, you have to put up some substance of money.

If you buy a real brand,

than you at least get something back,  the day you will part from it.

Than I believe that a good choice would be a firm,

that has been around 252 years :-)

Which still repair and make service of the watches they made 200 years ago !

Doc

Re: Cost vs Value and Horological Excellence. Your thoughts
04/25/2007 - 18:48

Hello Alex,

I agree with you in essence, however, as you said, value is something that the afficionado or buyer places on a watch or brand.  If the buyer is not educated in the finer points of horology or is only after the bling, then to that buyer, the rubbish that you refer to may have more value than say a VC.  There is a very big market for bling-bling which is why even the finer brands have bling-bling versions.  I guess some buy a watch as a timepiece and some as a fashion accessory.

Personally, I started out with the designer/fashion brand watches (I can still appreciate some from a design standpoint).  I dont think I was cheated or anything and I was quite satisfied with the design and brand recognition factor etc (what I valued at the time).  However, and with many thanks to you and other afficionados, I learned more about horology, and with that came a change in my watch buying habits.  I know that I would still get more oohs and aahs from the average person by wearing popular designer brands, but I am now much happier with the stealthier and pedigreed members of my small collection (a change in what I value).

It is really hard to put the blame solely on the brands in question.  In part, it also has something to do with the buyers horological education (or lack of it) and their tastes and values.  If there is a market, there will always be sellers.  At least we don't have to compete with the bling-bling buyers for our precious few VC's!

Just my 2 cents.

Kazumi 

I was less referring to bling-bling which have value maybe not in
04/25/2007 - 19:47

the watch itself but the jewels! My pet peeve are all the wannabee supposedly high end brands with no legitimacy, casing 100% outsourced movements - conning clients out of their hard earned cash!

Ahh, yes...those brands...
04/26/2007 - 03:37

Sorry if my post had branched off to the bling-bling side (I realized this AFTER sending my previous post). 

Yes, with the resurgence in the demand for high-end mechanical watches, there has been an influx of wanna-be's and pretenders trying to cash in on this market.  And as you mentioned, most of these brands offer pricey complications without much care about after sales service, etc.  However, the irresponsibility shown by these brands towards their buyers (victims) is also eqalled by the irresponsibility of the buyers themselves.  When making a big purchase, one should always be diligent in doing one's homework (buyer beware)...Did the buyer study the brands background (is it reputable, established?).  Did he ask the seller what sort of after sales service, guarantee is offered? 

I can understand your dismay in this regard but there is only so much we can do...If only everyone visited fora like this!

Kazumi

I agree with Kazumi, quite often...
04/26/2007 - 09:23

the buyers do not make the effort to educate themselves, or if they are not educated, they feel convinced that they are. I guess different cultures/societies have a very strong prejudice as to what constitute's the best, and as a result, buyers 'refuse' to get re-educated. In many parts of the world, owning a Rolex means that one has made it in life. This is rather sad, but true. 

It all comes down to the basic economic principle of opportunity cost. If someone is spending USD$10-15K on a watch, and if this is big money for this buyer, then he should get the Very Best that USD$10-15K can buy him. If a person uses this logic, he will be be faced with Only 3-5 top brands, depending on whether it is a dress watch or a sports watch etc. 

Instead, you have Jacob&co, Hermes, Chanel, Louis Vouitton, Van Cleef & Arpels etc. who are trying to compete with the VC's of the world. Perhaps overmarketing by such brands and too many celebrity endorsements (Omega, Tag, Rolex etc.) tend to 'confuse' buyers for whom watches are necessary but not a passion.

What about the re-emerging brands?
04/26/2007 - 17:50
What's your take (kk, kazumi, alex et al) on companies like Panerai which have clearly been around for a long time, but have re-emerged and are taking their well loved "style" and trying to add the movment technology. Or JLC, which have fantastic in-house movements, now drifting in their styling to try and attract the sports watch buying crowd. My 2 cents: I love both these brands for their true heritage (great style for PAM, great movements/tech for JLC in a style-neutral manner). I find their "drift" in products to be uninteresting and in JLCs case a little disappointing. This is leading me more and more into thinking about Vacheron, Patek, Brequet and higher end IWCs. It's not who has the most watches in the end who wins, it's the one who has the best! (and I think Doc is winning ;)
It really depends...
04/26/2007 - 19:22

I don't have a problem with re-emerging brands but rather many of those who just buy an old name and make up a phoney story.

One of the most stupid things I had read related to a  re born brand which had been bought by an investor and the claim to fame of the brand was that 300 years ago the watchmaker who's name was on the dial (and whom by the way no one had ever heard of!) had invented the first minute repeater dial!! LOL!! What the hell is a minute repeater dial?

The two brands you mention are excellent exemples. Panerai is amazing, you can love or hate the brand but you have to admit that they are consistent with what they claim to be and their heritage. Their products are easily identifiable and their range of watches is consistent.

JLC sometimes has me scratching my head. Here is a brand which was never considered as a haute horlogerie brand when it had its name on the dial but always made fantastic movements either for itself for other top tier brands. In recent years JLC has been trying to go upscale with the launch of the Gyrotourbillon, the Reverso à Tryptique or the Antoine Minute Repeater which are excellent watches. Then the brand comes out with the cheapest manufacture tourbillon (about euro 30k in steel) but also one of the most expensive tourbillons on the market:  the Lab series launched this year which will be retailing at about euro 230k!! Its tough to want to cover the whole market range from entry level steel Reversos to the complicated pieces priced in hundreds of thousands of euros.

There was an excellent intreview of Frank Muller (the man) on Horomundi.com on pricing and perception (and he used JLC as an example), I can't find the link but for those who have access to the latest issue of Revolution magazine the article also appears in print.

I think that...
04/27/2007 - 10:35

if a re-emerging brand really makes the effort, either on their own or by a parent company, and genuinely try to acheieve what they were in the past, then its remarkable. I am sure Panerai and Breguet fall into this category. I guess revival is genunine when the movement is specific to each brand, and not follow the concept of platform sharing as is done in the auto industry.

Regarding JLC, I think in the past their entire strategy revolved around the Reverso, and now they are trying to place emphasis on their other series (Master, Master Compressor etc.). I have no clue as to how they name their series. I am sure they could have thought of something more romantic than 'Master' or 'Master Compressor'. However, I feel they are venturing into too many 'extreme' watches and divers/sports watches etc. Hope they do not become like a high end Tag Heuer. But, by launching their recent grande complications, they are trying to show what they are really capable off. 

I wish they could do a bit more with the reverso (perhaps a reverso with a perpetual calendar), and launch a beautiful dress watch series. Perhaps its their belief that all their models should be available in stainless steel, and hence the diverse pricing structure. Despite their vagaries, I have a soft corner for JLC. I like their models more than AP.