U.S. Remains World’s Top Platinum Watch Market

Platinum watch sales continue to grow worldwide and remain strong in the U.S. market despite the rising price of platinum and a sharp increase in the watches’ average price since 2004, say new Swiss watch industry and U.S. market figures.

In 2006, the number of platinum watches exported worldwide from Switzerland (most platinum watches are Swiss-made) was 12,469, up 7 percent from the 2005 figure of 11,651. Twenty-three percent (2,854) went to the United States, the world’s top platinum watch market. Platinum watches’ worldwide turnover rose 24 percent in 2006.

Though a tiny niche in the global market for precious-metal watches, platinum watches “remain stable and growing,” JCK was told by Jean-Daniel Pasche, president of the Federation of the Swiss Watch Industry FH. “We expect 2007 to go in the footsteps of 2006, and that our exports overall, including platinum watches, will continue to increase.”

In the United States, the platinum watch market continues to thrive, even though the metal’s price had risen to about $1,160 per ounce at press time. Turnover rose 7.6 percent to $89.5 million on sales of 2,169 platinum watches (out of a total $5.3 billion fine-watch market of 7.6 million units), says LGI Network, a provider of marketing and sales information on fine watches.

Among all watches retailing for $10,000 and up—a $1 billion market—platinum timepieces accounted for 8 percent in 2006. Seventy-one percent of platinum watches sold for $25,000 or more.

The U.S. platinum watch market saw some other notable trends:

Increase in sales to women According to LGI, sales of platinum watches to women in 2006 increased 34 percent in dollars and 25 percent in units.

Regional differences Sales in the Northeast in 2006 rose 38 percent in dollars and 31 percent in units, says LGI. The region with the most business in 2006—the West—was the only one to post a decline from the previous year in units sold.

Younger buyers “The information I get suggests there’s a growing group of younger affluent consumers, in their early 30s, with increased awareness of platinum as a quality metal, who are seeking the best,” says James Courage, chief executive officer of Platinum Guild International. “Watch companies are aware of this. That’s why we’re seeing increased numbers of watches and lines in platinum.”

The sharply rising price of platinum in the past couple of years, though, may be having some effect on both the global and U.S. watch markets. The Swiss Assay Office, which hallmarks watch cases, told JCK that it processed fewer platinum watches in 2006 (16,127) than in 2005 (16,404). That could mean fewer assembled and finished watches this year than last. Another indication may be that the U.S. market ordered slightly fewer platinum watches in 2006 (2,854) compared with 2005 (2,874), according to data from the Federation of the Swiss Watch Industry FH, and slightly fewer were sold here in 2006 (2,169) than in 2005 (2,188), says LGI.

While the number of watches sold in the United States dropped slightly, the average suggested retail price increased 8.5 percent (to $41,263 in 2006 compared with $38,025 in 2005). Worldwide, the average wholesale price of platinum watches has risen 200 percent since 2000, and 51 percent since 2004, according to statistics compiled by the Federation of the Swiss Watch Industry FH. In 2006, it was $19,532, compared with $17,402 in 2005.

Many watchmakers and retailers say those who can afford platinum watches aren’t bothered by the rising cost of either the metal or the timepieces.

One sign of the vitality of this niche luxury market is that more watch brands—both mid- and luxury-price—are entering it for the first time or expanding their presence there, turning a stronger public spotlight on their watches to attract more-affluent watch enthusiasts and collectors, especially younger adults and women self-purchasers. Vacheron Constantin, for example, recently unveiled its new collection of watches with platinum dials at a well-publicized Hollywood gala. Among brands adding platinum watches recently are Louis Vuitton, which launched a men’s line, and Victorinox Swiss Army, which expanded into high-end watchmaking with its Legacy Réserve de Marche Platine, a sporty limited edition on a rubber strap, retailing for $19,500.

At present, more than two dozen brands offer platinum watches in the United States. While most carry luxury price tags, some U.S. brands offer more-affordable versions. Dima watches, for example, sells limited-edition platinum watches for men and women (500 in a series) for about $3,000 retail. Watches with Swiss movements and genuine Swiss platinum ingots for dials ($995 retail and less) are offered by Croton, which sells about 1,800 a year. While only the ingot dial is platinum, the watch gives “the person who appreciates a platinum watch, but can’t afford the whole one, a taste of what it’s like to own one,” says Eli Mermelstein, Croton’s vice president of marketing.

U.S. Platinum Watch Sales by Gender (2006)

Gender Sales Same-Store Increase Same-Store Unit Increase
Source: LGI Network, February 2007
Female $13.8M +34% +25%
Male $67.3M +21% +11%

Top 10 Markets for Swiss Platinum Watches (2006) *

Units Value, Swiss Francs Value, $
Source: Federation of the Swiss Watch Industry FH
World 12,469 392,272,109 313,098,244
USA 2,854 69,840,613 55,744,399
Japan 1,421 27,573,612 22,010,168
Hong Kong 1,208 49,677,174 39,647,395
Germany 1,055 28,140,827 22,461,720
Italy 807 22,671,452 18,097,876
Singapore 795 29,930,427 23,892,477
United Kingdom 670 26,087,065 20,824,196
France 592 22,291,161 17,792,466
Spain 312 8,520,231 6,838,499
Russia 304 15,952,144 12,733,338

Swiss Exports of Platinum Wristwatches, 2004–2006

Source: The Federation of the Swiss Watch Industry
2004
Units Value, Swiss Francs Value, $ Av. Export Price, Swiss Francs Av. Export Price, $
World 12,367 258,400,677 336,470,235 20,894 27,218
USA 2,742 48,597,212 38,986,557 17,723 23,092
2005
World 11,651 318,814,797 415,176,910 27,364 35,629
USA 2,874 62,665,951 81,619,605 21,804 28,389
2006
World 12,469 392,272,109 510,908,529 31,460 40,993
USA 2,854 69,840,613 90,944,353 24,471 31,880

U.S. Platinum Watch Sales by Region (2006)

Region Sales Same-Store Increase Same-Store Unit Increase
Source: LGI Network, February 2007
Midwest $13.0M +9% +25%
Northeast $19.6M +38% +31%
South $16.0M +17% +1%
West $32.5M +13% –3%