In December 2024, a stainless steel Tag Heuer Monaco 1133B, once worn by Steve McQueen, sold for $1.4 million at Sotheby’s. Just months earlier, the auction house had dropped the hammer at $3.8 million for a 1946 Patek Philippe in pink gold.
These figures are exceptional, with provenance and rarity playing a decisive role. But astronomical prices — often exceeding those of brand-new models — are common in the secondary luxury watch market. They result from carefully orchestrated strategies, amplified by a touch of serendipity from external factors.
When a timepiece commands the same price as a flat in central Paris, one thing becomes clear: the watch industry isn’t just selling new watches, it has managed to effectively integrate the secondary market into its operations to the benefit of its business and brand equity. And in that, it holds three valuable lessons for the entire luxury industry.
1. Controlling supply
Walking into a luxury watch boutique doesn’t guarantee a purchase — there are often years-long waiting lists. Some customers go to great lengths to get their hands on a certain style, including building long-term relationships with the sales assistants. By tightly controlling supply, brands make their watches as rare as a Da Vinci masterpiece, increasing desirability in the primary market and driving resale prices higher.
In a way, this control has come quite naturally. Demand has grown exponentially because the number of millionaires and billionaires has risen dramatically in the past 20 years, and making watches is a lengthy process, mainly because the movements are assembled by hand and training watchmakers takes time. Last year, Rolex, which already produces a million watches per year, opened a new production site; though it will still be some time before it is able to match demand
In contrast, while a few luxury brands — like Hermès — have a level of scarcity that drives demand, the fashion industry largely operates on a model of overproduction, even at the higher end of the market, resulting in a perception that it does not hold the same value.
“The main factor influencing valuation is the difference between supply and demand at any given moment,” says Joëlle Grunberg, partner and leader of McKinsey’s North America retail, fashion and luxury arm. She highlights that, for in-demand watch brands like Rolex, Audemars Piguet and Patek Philippe, the secondary market often serves as the primary market due to limited supply and overwhelming demand. (Since there are not enough watches available on the primary market, the secondary market is a way for retailers and brands to still offer their clients access to the products they want — this is why so many have launched certified pre-owned schemes.)
Oliver Müller, founder of Swiss watch consultancy LuxeConsult, emphasises that scarcity, not the intrinsic value of materials, drives a watch’s worth. “The determining factor isn’t whether a watch is made of gold or another precious metal, but rather its rarity, pedigree and demand. A vintage piece with a distinguished history or an iconic model that has consistently been sought after will hold the highest resale value,” he explains.
Although a gold watch will typically never sell for less than its melt value — the worth of its gold by weight — Müller illustrates how scarcity dictates price, pointing to sales figures of Patek Philippe’s latest release, Cubitus, on the primary and secondary market. The Cubitus platinum model, priced at $85,000, resells for $159,000 (+87 per cent); the gold version, at $59,000, resells for $108,000 (+83 per cent); the stainless steel iteration resells for $113,000 — nearly threefold its original cost at $39,000 (+186 per cent).
A similar trend emerged when Patek Philippe discontinued the Nautilus 5711/1A in stainless steel, making it more expensive than some of the brand’s gold models due to heightened demand.
Even within the same brand, not all models behave equally in the resale space. Müller also notes that demand isn’t just tied to brand prestige, but heavily linked to market liquidity, referencing the impact of crypto-millionaires on luxury watch prices in 2018.
Does such tight control over supply make sense for other luxury categories? Dr Achim Berg — a former McKinsey partner, who led the global apparel and luxury practice, and now an independent consultant — advises caution. He notes that watches are inherently durable and relatively easy to repair due to their materials, whereas products like cashmere and shoes do not preserve as well over time.
However, he adds: “There are two cases in which fashion items behave like watches: when they are ‘super hot’, meaning newly launched, highly desirable and in limited supply — such as with certain collaborations — or when they become timeless classics. Whether or not a brand can lean into this dynamic depends on its desired positioning. Another key point: while it’s easy to advise a brand to create ‘iconic’ pieces, it’s ultimately consumers — over time — who determine what becomes iconic.”
2. Resale as a service
The global resale market for watches is valued at $28 billion, according to Müller. Until about five years ago, this market was highly fragmented and unregulated, but the advent of certified pre-owned (CPO) programmes changed that. By offering authentication, servicing and official guarantees, retailers like Bucherer and Watches of Switzerland, along with brands such as Audemars Piguet and Vacheron Constantin, have sought to inject trust into resale.
One of the first to recognise the resale market as a core business strategy was watch brand Richard Mille. “We recognised the importance of providing our clients with a secure and luxurious environment to acquire rare and historical pieces no longer in production,” says Tilly Harrison, managing director of Richard Mille in the Middle East and Türkiye.
Through Richard Mille Pre-Owned, clients are guaranteed a reasonable price and can acquire vintage models that are readily available, or simply more in line with their taste and budget. Beyond creating a safe and transparent marketplace for buyers and sellers of Richard Mille watches, the programme fosters a collectors community. And there is also an additional benefit for the business and its reputation: it helps clean up the grey market, where authentic products are distributed outside of the brand’s authorised channels.
Rolex introduced its CPO programme in 2023 for similar reasons, partnering with Bucherer (now owned by Rolex) to authenticate, service and sell pre-owned watches with a two-year guarantee. The official CPO label carries a 20 to 25 per cent premium over non-CPO Rolex models, but provides buyers with added security.
Experts point out that providing such a service is more cost effective for watches compared with other luxury categories, as timepieces are meant to be serviced for maintenance at least once every two years, so the staff that maintain the models can effectively authenticate them.
Still, there are learnings for fashion, which has been leaning further into resale in recent years. (For example, Kering acquired a stake in Vestiaire Collective in 2021 and launched Gucci’s vintage store on The RealReal, while Alexander McQueen also has a brand-approved programme in partnership with Vestiaire, where customers exchange pre-owned pieces for store credit.)
“The watch industry has shown that brand-led CPO programmes can build trust by ensuring authentication, quality control and price integrity,” says Claudia D’Arpizio, senior partner and global head of fashion and luxury at Bain Co. “Several brands now own the resale experience, which protects brand equity and combats counterfeits — a major issue in luxury fashion. Fashion brands could follow this lead by certifying pre-owned items themselves, integrating digital passports for traceability and leveraging resale to engage younger, sustainability-minded consumers. Controlling the full product lifecycle is becoming essential to drive long-term value and brand trust.”
3. The perception of longevity
“You never actually own a Patek Philippe, you merely look after it for the next generation,” is a tagline that has done much more than simply advertise the watch brand. It has morphed the collective perception of watches as bona fide long-term value assets. Fashion generally lags far behind. “While a luxury watch is often seen as a long-term investment or even an heirloom, many fashion accessories are more trend-driven, affecting their resale dynamics,” says D’Arpizio.
However, among fashion-related categories, high-end handbags have strong resale potential, especially for rare and iconic designs. Like watches, top-brand bags can command premium prices when supply is limited — a prime example being the Hermès white matte niloticus crocodile Himalaya Birkin 25 with 18-karat white gold and diamond hardware, which sold at Sotheby’s in February for over $300,000.
Such sales prove that some luxury handbags transcend seasonality and trends, which otherwise negatively impact the long-term value of fashion and accessories. Morgane Halimi, global head of handbags and fashion at Sotheby’s, explains: “There is seasonality and trends in fashion — but as is the case with other art forms, some pieces stand above these trends. Hermès Birkins or Kellys are perfect examples of this. They have been leading the handbag collection market for decades, regardless of size, colour or material.”
The same applies to legendary designers like Alexander McQueen, Karl Lagerfeld and Christian Dior, whose haute couture creations are, in Halimi’s words, “wearable works of art” with enduring value — a sign that creative narratives that elevate designers to the level of artists has a direct effect on the value of their creations in the long run.
According to a Vestiaire Collective study, the best designer pieces for future resale are timeless designs, limited editions and culturally significant collaborations. For vintage and archival fashion, a designer’s era is crucial — collections from Galliano at Dior, Ford at Gucci, McCartney or Lagerfeld at Chloé, and Philo at Celine remain highly sought after. Iconic It-bags like the Balenciaga City or the Chloé Paddington have transitioned from ’90s disruptors to collector’s items. These examples, as well as Hermès’s performance in the secondary market — the closest to luxury watches in terms of perceived longevity — suggest that brands are advised to cultivate timeless, evergreen products alongside trend-driven pieces to strengthen their long-term value.
“Fashion and accessories can learn from the watch market that iconic, timeless products retain their value much better over time than highly fashionable, transient items,” says McKinsey’s Grunberg. “Evergreen items maintain their desirability and price stability, whereas trendy pieces may experience short-term popularity, but are at greater risk of quickly becoming outdated and losing their value.”
The high-end watchmaking industry emphasises value through “technical contents that are rich with research and development”, “iconic and distinctive designs that are still legendary after decades” and “certificates of originality and guarantee”, says independent consultant Susanna Nicoletti. This nurtures communities of fans and passionate collectors, who in turn become brand advocates.
“All these pillars are much more diluted in leather goods,” she adds. “If the [wider luxury industry focused on these pillars] instead of going the opposite way, the resale market could represent a second, strategic channel for fashion brand equity.”
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