What the wild journey of a $100,000 watch can teach us about global markets The luxury watch market was a sleepy, shrinking industry until it got caught up in a tidal wave of market forces.

What the wild journey of a $100,000 watch can teach us about global markets

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LEILA FADEL, HOST:

Swiss watches were a small, very select market for decades, Rolex, Patek Philippe, Tag Heuer. They can cost thousands of dollars apiece. But a couple of years ago, the little industry got swept up in a strange mix of global events and market fads that changed everything. NPR's Stacey Vanek Smith reports.

STACEY VANEK SMITH, BYLINE: The Swiss take their watches very seriously. In a small Geneva workshop, a row of watchmakers is hunched over wooden desks, squinting through black jeweler's loupes at tiny networks of gears and springs, some smaller than poppy seeds. Henri Porteboeuf likes to get into a rhythm when he does this intricate work.

HENRI PORTEBOEUF: I like - you say in English, I think, is flow. I like the flow.

VANEK SMITH: The flow. He likes to listen to jazz on his iPhone while he works. But other than that, his job does not look much different than it would have more than 400 years ago, when the Swiss watch industry started. Today, though, he is working on a special watch.

PORTEBOEUF: (Non-English language spoken).

VANEK SMITH: The Bulldog. It's a watch made by Maximilian Busser & Friends - or MB&F. It is a wild watch. The face is encased in this glass bubble, has little spinning domes and even a tiny set of metal jaws that opens and closes. There is nothing tiny about the bite it will take out of your wallet. The Bulldog costs $100,000.

CHARRIS YADIGAROGLOU: We debated endlessly whether we should launch it or not.

VANEK SMITH: Charris Yadigaroglou is head of marketing at MB&F. The company had planned to launch the watch in March of 2020. And then lockdown started happening across the world.

YADIGAROGLOU: You know, the world was collapsing. And are we going to really launch right now a crazy watch called the Bulldog right now? Is this good timing?

VANEK SMITH: As it turns out, it was perfect timing. The Bulldog sold out almost immediately. As COVID was shutting the world down, the luxury watch industry was having a renaissance. Oliver Muller is a watch industry analyst.

OLIVER MULLER: In the 25 years I have been in the watch industry, we have never experienced such a strong growth - never, ever.

VANEK SMITH: Luxury watches had been a shrinking market, mostly catering to older, wealthy collectors, connoisseur types. But in the early part of the pandemic, as millions of people were losing their jobs, another group was coming into enormous wealth.

MULLER: People, mainly younger people, made so much money so easily with cryptocurrencies. And they started to buy watches. And that's where the market really took off.

VANEK SMITH: Took off and immediately hit a ceiling. Luxury watchmaking is slow. Each watch has hundreds of parts sourced from different makers, assembled by hand. The little artisanal industry was overwhelmed. It could not meet the moment.

MULLER: We had waiting lists of five, six, seven, 12 years.

VANEK SMITH: But instead of discouraging would-be watch buyers, those waiting lists drove them into a frenzy.

MULLER: Rich people, if you tell them that they can't get something, they are ready to pay any price to get it.

VANEK SMITH: This created a booming secondary market, where speculators would snap up watches as fast as they could and flip them for double, triple, 10 times the price. Luxury watches were no longer a niche product for super-wealthy collectors. They were an investment. And then something happened that would have destroyed most industries, crypto crashed. The markets crashed. The demand for luxury watches cratered overnight. But the same thing that held the industry back from expanding with the explosive new demand saved it. Because of the slow production, the market hadn't been flooded with luxury watches that suddenly nobody wanted to buy. When the crypto buyers went away, mostly the waiting list just got shorter, says Muller.

MULLER: Watches have demonstrated that they are quite resilient.

VANEK SMITH: Swiss watch exports hit a record $22 billion last year and are on track for another record this year. Muller says prices have stayed strong. And he's hopeful. At MB&F, there is still a wait for the $100,000 Bulldog watch. Watchmaker Henri Porteboeuf is not rushing, though.

How does it feel to finish a watch?

PORTEBOEUF: It's like a baby now because, like, the heart beating.

VANEK SMITH: It's like a little life.

PORTEBOEUF: Yeah. Yeah, yeah. For me, it's like that. Yeah.

VANEK SMITH: This, in fact, is why MB&F's Charris Yadigaroglou thinks watches have such a powerful appeal these days.

YADIGAROGLOU: A mechanical watch is, like our watchmaker was saying, like a little heartbeat. There are gears moving. There's a spring that provides power. It's analog. And this is something which I feel a human being needs to compensate all this super high-tech stuff we have around us.

VANEK SMITH: As long as you have a hundred grand to burn. I did notice nobody at MB&F was wearing a watch. And when I asked about it, the whole room kind of erupted in English and French.

(LAUGHTER)

YADIGAROGLOU: (Speaking French).

VANEK SMITH: Oh, you can't afford the watches? I mean...

YADIGAROGLOU: We cannot afford our own watches, honestly. No, seriously.

VANEK SMITH: All that humanity still doesn't come cheap.

Stacey Vanek Smith, NPR News.

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