The scarcity grew so pronounced by last fall that Rolex made a rare public statement for an article in Yahoo Finance. “The scarcity of our products is not a strategy on our part,” the statement read. “Current production cannot meet the existing demand in an exhaustive way, at least not without reducing the quality of our watches.”
This is hardly to say Rolex is not moving product. The company made an estimated 1.05 million watches in 2021, according to a recent report by Morgan Stanley in collaboration with a Geneva-based firm, LuxeConsult, giving it an estimated 29 percent of the luxury Swiss watch market. By comparison, Patek Philippe produces about 60,000 timepieces a year. (Rolex, a private company, does not routinely disclose sales or production figures.).
So that is the supply part of the equation. Why the insatiable demand?
It seems that the pandemic helped turbocharge the market, said Steven Kaiser, the president and chief executive of Kennedy USA, a watch chain based in Australia.
“The biggest competitors to our industry were not other brands, but other luxuries like travel, entertainment, going to restaurants and Broadway shows,” Mr. Kaiser said. “You didn’t do those things for two years, so our industry was booming.”
Eye-popping auctions fueled the surge, too, Mr. Corder said. Once confined to tweedy insiders, watch auctions became a spectator sport in 2017 when Paul Newman’s Rolex Daytona — perhaps the most famous wristwatch in the world — sold for $15.5 million at a Phillips auction and generated countless headlines.
The booming watch market is not confined to Rolex. Prices have ballooned for several models of Audemars Piguet’s Royal Oak line, favored by celebrities like Drake, Justin Bieber and Stephen Curry, said Paul Altieri, the founder of Bob’s Watches in Newport Beach, Calif. Exploding prices for the coveted, and recently discontinued, Model 5711 of the Patek Philippe Nautilus, have drawn comparisons among some in the watch world to the Dutch tulip mania of the 17th century.