Class Warfare: The Hidden Threat to the Luxury Watch Business

As I reported earlier, celebrities loves them some Richard Mille watches. Not-so-coincidentally. the media loves them celebrities loving their Richard Mille watches. Especially the price tag. Check out this serious gq.com gush about Jay-Z’s custom Richard Mille 56:

Jay-Z’s stance says it all here, doesn’t it? Who stands like that, with their wrist awkwardly twisted to the camera, if they don’t have a brand new one-of-one super-expensive watch to show off?

And this one might be the mother of all of those: the sapphire case alone on this Richard Mille 56 took 3,000 hours to make, according to the watch’s customizer Alex Todd, and the whole thing cost around $2.5 million. When you’re wearing a custom Louis Vuitton suit and your watch is indisputably the star of the show, you know you’ve got a serious timepiece.

Not for one minute do I think anyone paid $2.5m for the watch that Shawn Corey Carter wore to the awards ceremony. But take a second to appreciate the danger to the Swiss watch industry of a man flaunting — yes flaunting — a $2.5m watch.

At the moment, this kind of mind-blowing conspicuous consumption is in. Whatever his timepieces really cost, Mille’s minting money. Jacob & Co. are raking it in selling watches made of diamonds. This at the same time that an avowed Socialist is running for President of the United States, and doing well in the polls.

Mr. Sanders, Senator Warren and the rest of the Democratic pack are stoking the fires of class warfare. These well-heeled hypocrites (that’s not a Timex on Bernie’s wrist) are no less interested exploiting lower and middle class Americans than the “Wall Street fat cats” they vilify. Actually, more.

If the U.S. economy doesn’t tank before the next election, the Dems’ “eat the rich” pitch will get them precisely nowhere. The Kardashians will keep on buying each other stupendously expensive watches, jewels and clothes. Or at least wearing them for free.

If the economy goes seriously south, if the public starts seeing rich folks as evil exploiters stealing food off their plate, the Kardashians, Jay-Z’s and Diane Krugers of the world will dress down for the occasion. As will the rest of the wealthy buyers currently perfecting the fine art of shameless consumption and materialistic oneupmanship.

Could “watch shaming” — an extreme form of putting someone into social justice Siberia — become a thing? It is in Russia. If it happens even slightly in The Land of the Free, the market for luxury watches will tank.

It’s not that the rich won’t be able to afford hugely expensive horology. They just won’t want to be seen affording hugely expensive horology. That’ll take the blingiest of the bling timepieces like, say, Richard Mille, off the street and off the table. Rolex? Oh yeah, Rolex too. Definitely.

If the culture turns against unabashed displays of wealth, subtle high-end watches may not be hit so hard.

Although public preening accounts for some portion of A. Lange & Söhne sales, I’m sure they have a solid base of customers who appreciate their timepiece in the privacy of their own dressing room. Don’t forget: you can round down to zero the percentage of people who’d know that a Lange 1 Daymatic cost $50k.

The wild card here: African-American celebrities. Their patrons/followers/admirers see their $500k+ watch as a manifestation of these celebs’ victory over discrimination. A relatable statement of personal triumph over cultural adversity. A powerful symbol of hope. That makes it OK for everyone else.

I’m not sure that will ever change. The idea that a luxury watch is the realization of the American dream is profitable on all sorts of levels. But if class resentment turns that dream into a nightmare, there’s gonna be some serious trouble for high-end Swiss watchmakers.

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