Is the boom in collectible watches over? Disturbing signs from the east
After a boom linked to production cuts linked to covid and abundant liquidity, the collector's watch market is also having problems, and they come from the east: the Chinese market for luxury and collectible goods has collapsed in the last two months. due to the economic turmoil that held back the discretionary spending of the rich.
According to the Financial Times, the prices of some of the most famous brands of luxury watches and designer handbags (such as Rolex watches and Hermès bags) on secondary markets have plummeted between 20% and 50% since, at the beginning of this one. year, Shanghai imposed a strict Covid blockade.
The deflation of China's housing bubble and President Xi Jinping's controversial zero Covid policy in Shanghai and dozens of other regions have sent the economy into a tailspin, denting consumer sentiment. According to the Watcheco portal, the price of second-hand Rolex Submariners has fallen by 46% since March. Over the same period, luxury handbag stores in Shanghai and Hangzhou reduced the prices of Hermès Birkins by 20%.
According to the FT, one of the factors that led to this sudden decline in the east is the so-called "Whiplash effect", that is the whip effect linked to the closing-opening of logistic chains: the closure of supplies has prompted wholesalers to fill their warehouses, investing large sums which they then had to free up, even with the increase in financial costs, thus bringing the price down suddenly and enormously.
Even the general index of luxury watches, the Subdial 50, indicates that, having reached a peak about 8 months ago, a slow, progressive, but not as intense decline as the Chinese news would show.
China was probably in a bubble, so the decline was more sensitive, but in any case it is part of a generalized trend due to the monetary tightening and the economic crisis that is felt and will be felt in the near future.
Meanwhile, in China, the state is trying to create a tax free market for Western luxury goods on the tourist island of Hainan, to prevent citizens from going abroad.
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The article Is the boom in collectible watches over? Disturbing signals from the east comes from ScenariEconomici.it .
This is a machine translation of a post published on Scenari Economici at the URL https://scenarieconomici.it/il-boom-degli-orologi-da-collezione-e-terminato-segnali-inquietanti-daest/ on Sat, 13 Aug 2022 07:21:25 +0000.