HODINKEE Podcasts – The Business of Watches [017]: Oliver Müller, The Man Behind The Numbers For The Morgan Stanley Swiss Watcher Report

Episode Theme & Overview

This episode of The Business of Watches dives into the financial underpinnings of the Swiss watch industry, spotlighting the latest Morgan Stanley Swiss Watcher Report. Host Andy Hoffman interviews Oliver Müller, founder of Luxe Consult and principal architect of the annual report that has become an industry benchmark for market analytics, brand performance, and revenue estimates.

Preceding the main interview, Hodinkee founder Ben Clymer joins to discuss current industry dynamics, shifting market trends, and key findings from the latest Swiss Watcher Report.

Key Discussion Points & Insights

1. Market Trends & The Rise of High-End Brands

Timestamps: 01:57–13:34

• Ben Clymer describes the Geneva trip, noting closer collaboration between Hodinkee and Watches of Switzerland, and how major brands are increasingly focused on moving upmarket.

• Quote (Ben Clymer, 03:33): “A lot of talk about ASP…people want to go high end. And I’m not surprised by that.”

• Discussion of the fading entry-level brand “ladder” and consolidation at the top. Watches under $4,000–$5,000 are no longer entry points for hype or growth (except certain hits like Tissot PRX).

• Currency dynamics: The strong Swiss franc and weak US dollar are widening price gaps for US buyers, especially for imported Swiss watches.

• Quote (Ben Clymer, 05:00): “Gold is now more costly than platinum… I expect to see a lot of platinum watches at Watches and Wonders this year because of it.”

2. Dominance of Top Brands & Industry Polarization

Timestamps: 05:11–13:34

• The four major brands—Rolex, Cartier, Audemars Piguet (AP), and Patek Philippe—now account for about 55% of industry sales.

• AP’s staggering reliance on the Royal Oak: Quote (Ben Clymer, 06:04): “88% of AP sales comes from the Royal Oak… that is remarkable.”

• Data in these reports (especially for privately held brands) is valuable but should be taken “with a grain of salt.” Brand communication often glosses over tough performance:

  • Quote (Ben Clymer, 09:38): “Have you ever heard a brand executive actually tell you that things are tough… it never happens.”

3. Cartier’s Surge

Timestamps: 09:37–13:34

• Cartier has cemented the #2 global position, showing formidable growth in both jewelry and now men’s steel watches.

• The commercial success of staple models (Santos, Tank) at accessible prices is “on fire” globally.

  • Quote (Ben Clymer, 10:58): “What Cartier has been able to do under Cyrille and now under Louis is extraordinary and I think, you know, a model for what I think many brands to aspire to.”

Main Interview: Oliver Müller of Luxe Consult

4. What is the Morgan Stanley Swiss Watcher Report?

Timestamps: 14:25–17:54

• Started in 2018 (based on 2017 data), the report provides a financial-market-focused, comparative metric for brand revenue and production estimates, particularly relevant to investors in public luxury groups (LVMH, Richemont, Swatch).

• Although referenced by industry insiders, Müller emphasizes it’s intended primarily for Morgan Stanley’s financial clients, not for direct industry self-assessment.

  • Quote (Oliver Müller, 16:45): “It’s not my report, it’s Morgan Stanley’s report for their clients.”

5. Methodology & Data Gathering

Timestamps: 17:54–24:00

• Retail value is used as the common denominator—estimating all brand sales as if at final retail price, whether the brand is wholesale (Rolex) or direct-to-consumer (Richard Mille).

• Sources include direct brand discussions, confidential supplier numbers, retail and regional feedback, and proactive confidential disclosures from industry insiders.

  • Quote (OM, 21:23): “Year after year we have more and more people becoming proactive… they give us some insights on how the business is going.”

• Culture of secrecy is common—everyone wants competitors’ data but resists sharing their own. Some privately praise Müller’s accuracy off the record.

  • Quote (OM, 22:30): “Everyone would like to have the numbers of the competitor but not give his own numbers.”

6. Handling Criticism and Swatch Group Data

Timestamps: 23:37–28:16

• Swatch Group (especially Nick Hayek) is publicly critical of the report’s numbers.

• Müller defends the methodology: consolidated group figures are public, but structural weaknesses—overcapacity, mid-market focus, reliance on Omega—explain ongoing loss of market share.

• The premiumization of the industry means mid-tier brands suffer the most.

  • Quote (OM, 24:00): “It’s better to listen to the market and what the market wants rather than telling the market what it should want. And that’s a real issue at Swatch Group.”

7. Findings From the 2025 Report

Timestamps: 28:16–33:15

• Industry polarization: Four brands (Rolex, Cartier, Patek Philippe, Omega) now control 55%+ of the market; the “Big 4” (Rolex, AP, Patek Philippe, Richard Mille) soared from 37% to 49% of value share since 2017.

  • Quote (OM, 29:13): “Out of those 450 [active Swiss] brands there are only four which are making up 55% of the market shares.”

• Rare examples of scaling among independent brands: FP Journe and H. Moser broke the CHF 100M revenue mark.

8. Secrets of Independent Success

Timestamps: 33:15–37:57

• Strong, authentic community engagement is key for FP Journe, Moser, Richard Mille, and MB&F. Storytelling, consistency, and niche identity fuel loyalty and secondary-market strength.

  • Quote (OM, 36:15): “It’s almost like, you know, a religion. If you like François-Paul Journe, you love him, and so his customers are very loyal.”

• Legendary individuals (e.g., Richard Mille, Max Busser) are chief storytellers driving brand heat.

9. Integration vs. Value Proposition in Lower Price Tiers

Timestamps: 37:57–42:44

• Even as the market moves upscale, some mid-tier brands like Raymond Weil, Frederique Constant, and newcomers Christopher Ward are thriving with strong product-value propositions and direct-to-consumer models.

• There’s renewed entry-level interest, especially among Gen Z for mechanical/neo-vintage:

  • Quote (OM, 41:24): “There is an interest coming up for watches which are taking the codes of serious watchmaking and putting them at the accessible level.”

10. Jacob & Co. and Christopher Ward – Outliers

Timestamps: 41:59–48:49

• Jacob & Co.: Highly polarizing, creatively distinct, and booming with unique, high-priced “brand territory” and strong sales in watches vs. jewelry.

  • Quote (OM, 44:26): “Jacob managed to create an own brand territory… he does things with the Bugatti watch, which is just incredible.”

• Christopher Ward: Lacking a strong narrative but excelling with product value and intensive direct-to-consumer engagement; rapidly growing within that model.

  • Quote (OM, 46:46): “Critical because the narrative of the brand is not very outstanding… but the product is… and the other magic trick they do: 100% D2C.”

11. Tudor’s Ascent and Methodological Revisions

Timestamps: 48:49–51:51

• Methodology allows past data to be revised when better estimates emerge; figures for Tudor were revised upward, revealing strong performance especially in the US market, and diversification away from reliance on China.

  • Quote (OM, 49:17): “They are in a very competitive environment…if your dad comes, which is Rolex…and says…‘we also appreciate a lot that you carry Tudor,’ then you have a hard time telling the guy…I keep Rolex, but I don’t take Tudor.”

12. Group Brands: Richemont’s IWC and Jaeger-LeCoultre

Timestamps: 51:51–55:30

• Group-owned brands can still thrive: IWC reversed its negative trajectory by focusing on product and price; Jaeger-LeCoultre is regaining ground under Jerome Lambert’s leadership, addressing previous pricing missteps and reinforcing its iconic status (Reverso).

• Quote (OM, 54:00): “Product launches were very well positioned in terms of prices…all of a sudden they were pushed out of the markets and to start with by Cartier.”

13. Profit Pool Concentration & The Industry’s Future

Timestamps: 55:30–59:06

• The top four brands capture 76% of profits. Müller predicts further concentration: strong brands get stronger, niche and microbrands can thrive at the edges, but most mid-tier brands face extinction or absorption.

  • Quote (OM, 56:34): “My prediction is that those brands will get stronger and stronger… there are too many brands out there.”

• Historical analogy to the automotive industry: Expect a blend of consolidation, with rare new brands breaking through.

14. Portfolio Rethink: Richemont, Swatch, LVMH

Timestamps: 59:06–62:40

• Richemont’s sale of Baume & Mercier signals coming group portfolio cleanups. More mid-tier brands (e.g., Roger Dubuis, Panerai at Richemont; certain Swatch or LVMH brands like Zenith) are likely candidates for divestment or strategic repositioning.

  • Quote (OM, 59:32): “Swatch Group would be well advised with 16 brands to maybe consider selling a few of them.”

15. The Rolex Paradox – Is Size a Risk?

Timestamps: 62:40–67:13

• Rolex broke CHF 11B in sales (~33% market share). Is their dominance a systemic risk? Müller says no—Rolex’s continual excellence, vertical integration (e.g., Bucherer acquisition), and technical leadership set a benchmark, and the “virtuous dynamic” will likely continue.

  • Quote (OM, 63:32): “Rolex is just playing the perfect playbook of what they need to do in that market positioning… They have done and just a perfect job.”

  • Anecdote: In 1971, Rolex was obscure even in its own hometown (Bienne); forty years later, it’s the world’s dominant brand—proof of its exceptional transformation.

Memorable Quotes & Moments

• “Gold is now more costly than platinum… I expect to see a lot of platinum watches at Watches and Wonders this year because of it.” – Ben Clymer, 05:00
• “88% of AP sales comes from the Royal Oak… that is remarkable.” – Ben Clymer, 06:04
• “Everyone would like to have the numbers of the competitor but not give his own numbers.” – Oliver Müller, 22:30
• “It’s almost like, you know, a religion. If you like François-Paul Journe, you love him…” – Oliver Müller, 36:15
• “Out of those 450 [active Swiss] brands there are only four which are making up 55% of the market shares.” – Oliver Müller, 29:13
• “There are too many brands out there… The long term will be a concentration on less brands, just as it happened in other industry, in the car industry to start with.” – Oliver Müller, 56:34

Timestamps for Important Segments

• 01:57–13:34: Ben Clymer on Geneva trip, industry trends and polarizations, ASP, Cartier’s rise
• 14:25–17:54: Oliver Müller introduction, origins and purpose of the Swiss Watcher Report
• 17:54–24:00: Methodology – how the data is gathered and calculated
• 24:00–28:16: Addressing Swatch Group criticism, structural challenges, premiumization trend
• 28:16–33:15: Findings for the latest year—market concentration, big four brands’ dominance
• 33:15–37:57: Secrets behind independent brands’ growth
• 37:57–42:44: Value segment, Gen Z, and lower-tier success stories
• 41:59–48:49: Spotlights on Jacob & Co., Christopher Ward’s emergence
• 48:49–51:51: Tudor’s rise, data corrections
• 51:51–55:30: Group brand wins: IWC and Jaeger-LeCoultre
• 55:30–59:06: Concentration of profits, predictions for the future
• 59:06–62:40: Richemont, Swatch, and LVMH portfolio strategy
• 62:40–67:13: Rolex’s unprecedented dominance—threat or benchmark?

Conclusion

This episode offers unparalleled insight into the evolving business of Swiss watchmaking. Through robust data analysis, on-the-ground industry context, and first-hand narratives, listeners gain a clear understanding of why industry profits are becoming more concentrated at the top, how independent brands can still flourish, and what strategic decisions face major luxury groups as the market further polarizes.

For anyone seeking a data-driven, well-contextualized picture of where the watch industry stands and where it may be heading, this is essential listening.