Swiss watch secondary market continued to recover in 2Q26, but pricing power outside the Big Three remains constrained
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Swiss watch secondary market continued to recover in 2Q26, but pricing power outside the Big Three remains constrained
Morgan Stanley notes that secondary-market prices for Swiss watches rose 1.5% QoQ in 2Q26, marking the fourth consecutive quarter of gains above 1%. Richemont, Swatch Group, and LVMH all improved, but the recovery was mainly driven by expectations around Watches & Wonders in April, with supply still needing to be absorbed afterward.
- The WatchCharts overall market price tracker rose 1.5% in 2Q26, marking the fourth consecutive quarter with gains above 1%; 27 of the 35 tracked brands rose QoQ.
- Among listed groups, LVMH led with a 1.7% gain, Richemont rose 1.3%, and Swatch Group rose 1.0%; TAG Heuer, Cartier, Vacheron Constantin, and Omega were the main contributing brands.
- Value retention continued to improve, with 7 of 8 tracked brands improving QoQ on a like-for-like basis; however, brands outside the Big Three still traded at least 27% below retail prices.
- Market momentum in 2Q26 was largely driven by expectations around Watches & Wonders, while a surge in new listings in March and April pushed up supply, and prices softened in May and June.
- Rolex CPO sales reached $186 million in 2Q26, up 28% QoQ and 67% YoY, indicating continued expansion of the certified pre-owned channel.
Report interpretation
Overview
This report tracks the performance of the Swiss watch secondary market in 2Q26, focusing on the WatchCharts price index, value retention, supply and transaction health, and what these indicators imply for demand and pricing power of brands related to Richemont, Swatch Group, LVMH, and Rolex SA. The overall conclusion is that the market continues to recover with broader participation, but gains have slowed versus previous quarters, and secondary-market discounts outside the Big Three remain deep.
Core views
The core views are as follows: first, overall secondary-market watch prices rose 1.5% QoQ in 2Q26, marking the fourth consecutive quarter of gains above 1%, but below the 2.5% recorded in 4Q25 and 1Q26. Second, the recovery became broader, with 27 of 35 tracked brands rising QoQ and 29 rising YoY. Third, all listed groups improved, with LVMH performing best driven by TAG Heuer, Richemont supported by Cartier and Vacheron Constantin, and Swatch Group mainly reflecting Omega's performance. Fourth, value retention shows that the Big Three still command clear brand premiums, with Patek Philippe, Rolex, and Audemars Piguet continuing to trade above retail prices, while other brands remain discounted by at least 27%. Fifth, expectations and new listings driven by Watches & Wonders explain the strong April performance and the pullback in May and June.
Analysis framework
The report uses WatchCharts secondary-market data to compare QoQ and YoY changes in overall market, brand, collection, and group price trackers, and combines supply, absorption rates, age of inventory, days on market, and value retention to assess market health. Value retention measures the premium or discount of in-production watches in the secondary market relative to retail prices, covering five markets: the United States, the United Kingdom, Germany, Japan, and Hong Kong.
Methodology notes
secondary-market price performance
The overall watch market analysis is based on the WatchCharts Overall Market price tracker, which aggregates the secondary-market performance of 300 watches across 10 major brands and weights them by annual transaction value in U.S. dollars.
value retention
Value retention is defined as the premium or discount at which in-production watches trade in the secondary market relative to retail prices, and is used to measure brand demand strength and potential pricing power.
supply-demand and inventory turnover indicators
The report uses total supply, absorption rate, age of inventory, and days on market to evaluate secondary-market health, covering Rolex, Patek Philippe, Audemars Piguet, as well as brands such as Cartier, Omega, and IWC.
Asset mapping & comparison
Structured mapping from thesis to named assets (strengths, weaknesses, peers, risks).
- RichemontExposed to the high-end watch secondary market through brands such as Cartier and Vacheron Constantin
- Strengths
- Cartier rose 2.2%, Vacheron Constantin rose 1.4%, and Specialty Watchmakers sales performed better than expected.
- Weaknesses
- Cartier was the only tracked brand with a decline in like-for-like value retention due to a larger increase in retail prices.
- Comparison
- Richemont group's 2Q26 price tracker rose 1.3%, below LVMH but above Swatch Group.
- Risks
- If retail price increases outpace secondary-market demand, value retention may remain under pressure.
- Swatch GroupMainly reflects secondary-market trends through Omega and other Swiss watch brands
- Strengths
- Omega rose 0.9%, Breguet rose 2.5%, Glashütte Original rose 1.7%, and the Swatch brand rose 9.4%.
- Weaknesses
- The group's performance depends heavily on Omega, while some brands such as Mido fell 1.3%.
- Comparison
- Swatch Group rose 1.0% in 2Q26, the smallest gain among the three listed groups.
- Risks
- Deep discounts outside the Big Three limit price transmission ability.
- LVMHParticipates in the Swiss watch secondary market through watch brands such as TAG Heuer, Zenith, and Hublot
- Strengths
- LVMH led listed groups with a 1.7% gain, with TAG Heuer up 3.8% and Zenith up 2.8%.
- Weaknesses
- It lacks a stable brand with both scale and sustained secondary-market share comparable to Omega or Cartier, and its long-term performance lags other Swiss groups.
- Comparison
- Its group gain in 2Q26 exceeded those of Richemont and Swatch Group.
- Risks
- Hublot fell 0.3%, and value retention for mid-range brands such as TAG Heuer remains clearly below retail prices.
- Rolex SARolex and Tudor serve as secondary-market references for the Big Three and mid-range brands
- Strengths
- Rolex rose 1.0%, Tudor rose 2.6%; Rolex CPO sales hit a record.
- Weaknesses
- Rolex value retention declined on a full-sample basis due to retail price increases and the discontinuation of the GMT-Master II “Pepsi”.
- Comparison
- Rolex still trades above retail price, but Patek Philippe leads in value retention.
- Risks
- New secondary-market supply is particularly concentrated in Rolex and will need to be absorbed by the market.
Key data
- Overall secondary-market price in 2Q26+1.5% QoQFourth consecutive quarter with gains above 1%, but below the +2.5% in 4Q25 and 1Q26.
- Number of brands rising27/35In 2Q26, 27 tracked brands rose QoQ, up from 25 in 1Q26.
- LVMH secondary-market performance+1.7% QoQDriven by TAG Heuer +3.8% and Zenith +2.8%.
- Richemont secondary-market performance+1.3% QoQCartier +2.2%, Vacheron Constantin +1.4%.
- Swatch Group secondary-market performance+1.0% QoQMainly reflecting Omega +0.9%, while the Swatch brand rose +9.4% during the quarter.
- Big Three brand performancePatek Philippe +2.2%, Audemars Piguet +1.5%, Rolex +1.0% QoQThe three major brands continued to rise, but momentum slowed in May and June.
- Patek Philippe value retention+15.4%Average in-production models traded at a premium to retail price, up 2.9 percentage points from March 2026.
- Rolex value retention+9.8%Down from +11.1% in March 2026, but up 1.0 percentage point on a like-for-like basis.
- Audemars Piguet value retention+3.0%Improved from +2.3% in March 2026.
- Rolex CPO 2Q26 sales$186 millionUp 28% QoQ and 67% YoY; 1H26 sales reached $330 million, about two-thirds of the total FY25 program amount.
Impact & implications
For equity investors, secondary-market prices and value retention are important leading indicators for judging demand, scarcity, and future pricing power of luxury watch brands. The 2Q26 data support a gradual recovery in industry demand, but because gains for brands tied to listed groups are relatively moderate and brands outside the Big Three remain deeply discounted, the report maintains a restrained view on broad-based pricing power.
Risks
- Strong April performance was mainly driven by expectations around Watches & Wonders, while prices had already pulled back in May and June, so short-term momentum may not be sustainable.
- New listings increased significantly over the past two quarters, with supply reaching or approaching historical highs, especially for Rolex inventory, which still needs to be absorbed.
- Brands outside the Big Three still trade at least 27% below retail prices, indicating that pricing power remains limited for most brands.
- Retail price increases may erode value retention, especially when secondary-market demand cannot absorb price hikes in step.
- WatchCharts data may be revised or adjusted later, and the latest published data should take precedence.
What to watch
- Whether 3Q26 can absorb the excess supply accumulated around Watches & Wonders.
- Whether the broad recovery, with 27 of 35 brands rising QoQ, can continue rather than being driven only by the April event.
- Whether value retention for brands outside the Big Three can narrow the discount relative to retail prices.
- Changes in Rolex CPO sales, inventory, and retailer concentration.
- The linkage between secondary-market prices and retail prices for key listed-group brands such as Cartier, Omega, TAG Heuer, and Vacheron Constantin.