There is an old idea that when a butterfly flaps its wings far away, it could set off a tornado in your neighbourhood.
The folk at Singapore-listed luxury watch retailer The Hour Glass (THG) probably appreciate this more than anyone else at the moment.
Several weeks ago, Watches Of Switzerland (WOS), one of the world's largest retailer of luxury timepieces, downgraded its outlook forecast for 2024. This came just months after the European retailer said it had a positive start to the third quarter of 2023, after which it went on to see a "volatile trading performance in the run-up to and beyond Christmas".
Much of the impact to WOS' sales was in its British operations.
But in the United States, it said, sales "remained strong with continued double-digit growth".
The impact on Singapore-based THG shares was swift and brutal.
The stock has slid from well above $2 in 2023 to hit a bottom at $1.47 by late January 2024.
This, despite the fact that THG had been aggressively buying back its shares at well above $2 through much of 2023. Even in recent days, the company has resumed buybacks at around $1.50 per share.
So what is happening? Has the business environment changed? Are people giving up on Rolexes and Patek Philippes, which account for the bulk of THG's sales? Are we headed into a luxury consumption slump? The facts suggest otherwise.
According to the closely followed luxury lifestyle blog Bow Tied Life, the demand for luxury watches remains very much intact, and is in fact growing for some models.
It shows that during the final quarters of 2023, the waiting times for Patek Philippe watches ranged from three to eight years, depending on models. Waiting times for Rolexes remain between one and three years.
This waiting list involves a "ranking system" where customers are assessed and prioritised based on factors such as their purchase history, influence and ability to spend.
Denne historien er fra February 06, 2024-utgaven av The Straits Times.
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Denne historien er fra February 06, 2024-utgaven av The Straits Times.
Start din 7-dagers gratis prøveperiode på Magzter GOLD for å få tilgang til tusenvis av utvalgte premiumhistorier og 9000+ magasiner og aviser.
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