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The latest Q2 data for the pre-owned watch market paints a seemingly stable picture. The joint report from Morgan Stanley and WatchCharts indicates a marginal quarter-over-quarter price decline of just 0.3%, marking the slowest rate of decrease in over three years. But does this signify a market bottom and subsequent rebound? We believe it's far too early to celebrate. As one seasoned collector aptly put it, "a broken leg is better than a broken neck, which is true, but neither is cause for celebration."

Beneath this superficial calm lie hidden undercurrents of market divergence and a deep psychological interplay. This report will offer an in-depth analysis of the true market sentiment behind the numbers.

 


 

I. Blue-Chip Bastions: Safe Havens in a Market Winter

Amidst widespread downward pressure, the market's "Matthew effect" has become increasingly pronounced. Capital and attention are concentrating intensely on a select few top-tier brands, which are now forming robust "blue-chip bastions."

  • Patek Philippe (+1.1%) & Cartier (+0.9%): These two were the standout performers. Patek Philippe's Nautilus and Aquanaut collections saw a strong rebound, while Cartier defied the broader downturn with robust demand for its classic Tank and Santos models.

  • Rolex (-0.2%) & Omega (-0.1%): As the absolute powerhouses of market transactions, Rolex and Omega largely maintained price stability. Rolex's supply levels are normalizing, and absorption rates are recovering; Omega's flagship Speedmaster series continues to see solid demand.

The excellent performance of these four brands this quarter clearly indicates that in an uncertain market, buyers are gravitating towards highly recognized, liquid "hard assets."

 


 

II. Widening Divide: The Song of Ice and Fire Continues

The resilience of blue-chip brands starkly contrasts with the struggles of the majority. Of the 35 brands tracked in the report, 29 still performed poorly quarter-over-quarter, highlighting an unprecedented market divergence.

  • Within the LVMH Group, most brands suffered, with Hublot (-4%), TAG Heuer, and Zenith all declining by over 2%. Bulgari (-0.2%) was a relative outlier, showing more stability.

  • Within the Richemont Group, while Cartier stood out as an exception, high-end brands like A. Lange & Söhne, Vacheron Constantin, Jaeger-LeCoultre, and Panerai were not immune, all experiencing declines exceeding 2%.

  • The Swatch Group also faced pressure, with Blancpain and Longines among others seeing price drops of over 3%. Only Tissot (+1.25%) was an unexpected 'dark horse' this quarter.

This data brutally exposes the market's reality: when the tide recedes, only brands with the most solid brand value and market demand can stand firm.

 


 

III. Beyond the Numbers: The Market's True Pulse and Deep Psychological Interplay

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To truly understand the market, we must look beyond the cold numbers and listen to its real heartbeat. Combining on-the-ground observations with insights from seasoned collectors, we identify several key underlying trends:

  • The "Bubble" Bursts, a Return to Rationality is the Dominant Theme: We must acknowledge that the frenzy of the past few years was a massive bubble, fueled by the unique liquidity of the pandemic era and the amplifying effect of social media. As one commentator aptly observed, "social media attention spans are finite." With this feverish tide receding, the market is inevitably recalibrating towards a "normal" trendline. We are approaching a time when one can once again walk into a boutique and acquire almost anything desired. Therefore, the current decline is less a crash and more a healthy re-calibration towards rational value.

  • A "Game of Chicken" is Currently Unfolding Between Buyers and Sellers: The market is witnessing a tense standoff. On one side, savvy buyers recognize the shift in market sentiment and choose to hold cash, patiently awaiting better prices. On the other, many pre-owned watch dealers, especially those who heavily stocked inventory at peak prices, are reluctant to adjust prices to reflect current market realities. A watch enthusiast shared an anecdote from Denver, where a Rolex certified pre-owned (RCPO) 16710 "Pepsi" with original box and papers was still listed at an unrealistic $16,500 in today's market. This pricing stalemate leads to a 'no-trade-at-stated-price' scenario, and is one reason for the slowdown in price drops—not due to rebounding demand, but rather low transaction volumes.

  • The CPO Program Paradox: A Stabilizer or an Obstacle? The emergence of Certified Pre-Owned (CPO) programs from brands like Rolex is a unique variable in this interplay. CPO is fundamentally a strategic move by brands to exert control over secondary market pricing, intending to establish a "price floor" with their premium tags. However, this seems to be at odds with the broader trajectory of the pre-owned market. We observe that CPO pricing strategies haven't fully reflected genuine market supply and demand, potentially becoming a factor hindering a rational price correction by creating unrealistic expectations for some sellers.

 


 

IV. Future Outlook and Our Perspective: Three External Clouds Loom Over the Market

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Looking ahead, we believe the market is far from a state of repose. At least three external factors will continue to exert pressure:

  • Tariff Shadows: U.S. tariffs on Swiss-made imports have already compelled nearly all brands to increase their retail prices in the American market. While rising new watch prices might temporarily prop up pre-owned values, in the long term, they will erode consumer purchasing power, ultimately transferring pressure across the entire market.

  • Exchange Rate Pressure: The sustained strengthening of the Swiss Franc against major currencies like the USD continuously increases the production costs of Swiss watches, further intensifying the pressure on brands to raise prices.

  • Macroeconomic Uncertainty: The global economy faces recessionary risks, making consumers more cautious about discretionary luxury spending. The "aspirational" middle-class consumer is a significant demographic for brands like Rolex, and any contraction in this group's spending power will pose a true test for the market.

 


 

Our Recommendations:

  • For Buyers: Patience is your best ally right now. The market scale is tipping in favor of buyers. For blue-chip watches, wait for a more rational entry point; for secondary brands that have seen significant declines, now might be an opportune time to uncover "value plays."

  • For Sellers: Realism is paramount. Please recognize that the market is no longer the "seller's market" of two years ago. Inflexible pricing will only prolong your inventory cycles. Flexibility and alignment with market trends are the wiser path.

 


 

In conclusion, the "stabilization" in Q2 feels more like a halftime break in an intense match. The real second half will be shaped by the interplay of macroeconomic factors, brand strategies, and consumer confidence, ultimately determining the market's future trajectory. A more rational and healthier pre-owned watch market may well be emerging from this profound correction.