is Panerai overpriced?

[t]

Hi guys

my first thread since long time ago

ok let

[Victoria]

DUH.

Tease.

Yes, it's overpriced, but why is it overpriced -- and why do people keep on paying? Clearly there are those in it for the fashion.

But curiously the ones who truly appreciate the history are the ones who fork down even more money, than your base 112 people. We are speaking about the pre-V straps going for $2.5k each, in another thread. That kind of person.

Let me ask you this -

Would you rather pay $5000 for a Rolex, or $5000 for a Panerai?

Answer that, and I think we'll get closer to an answer.

(Sorry if this reply wasn't about movements, but I'm going for motivation. Very few people who buy watches, know about movements)

[anton]

I personally feel that the collectability of the PAMs add to the price rise, falling US Dollar Value, and the trend 'dictate' its' pricing.

With that being said, I do think PAMs are overpriced.

But what about Franck Mullers? Or even better, what about a vintage PN Daytona that can fetch upwards of $100K when it has a Valjoux 72 movement?

Last I checked, A valjoux 72 watch can be had for around $2K.

Panerai manufactures around 50,000 watches a year. Unfortunately, I think that at least there are 7 people for every 1 watch they produce. Maybe more.

So they can dictate the prices they want, because people will pay.

[flamemax]

About $150 for lume jobs (no pun intended) and $75 for cannon pinion mods, I would have to say that they are ressonable if not understandable prices.

The watch modder is taking a risk by accepting the watch via standard shipping channels as well as taking apart a valuable (contextually speaking $100-$800) time piece, mod it and put it back toegther. All that, as well as being careful to return the watch in better condition that it was received.

And remember, modding watches properly, is not easy, one needs an amazing eye for detail, especially when dealing with fanatics such as us.

If the same opprotunity for substantial mods existed in other makes than Panerai, I am sure we would see similar price points for mods

[slai]

Aren't all luxury goods overpriced?

[Guest asad]

Yes Gen Panerai's are way over priced, Though honestly what you pay for a modded one here is what the gens should be worth. I honestly believe that Panerai is the next Rolex. As I have been seeing more and more Panerai than Rolex on a daily bases in the wild concrete Jungle.

[Victoria]

Yes Gen Panerai's are way over priced, Though honestly what you pay for a modded one here is what the gens should be worth. I honestly believe that Panerai is the next Rolex. As I have been seeing more and more Panerai than Rolex on a daily bases in the wild concrete Jungle.

Since July 4th, 2007, when I first held a Panerai in my hands, I've struggled with this very question: Is Panerai the next Rolex?

Will it ever be as covettable, as awe-inspiring, as immediately recognisable as Rolex?

Or has it already plateau'ed?

And the answer is, I truly don't know. I don't think anyone can knock off Rolex from its unique perch with the masses.

It's like the Mercedes-Benz, to Panerai's Alfa-Romeo (coming again to the US, in October 2009). We'll see...

One thing I'd like to tell you, is that after wearing my Fish for 5 days straight, I'm starting to get a WEENCY bit tired of it. I still love it! But it's not Panerai.

[anton]

Forgive me, for not answering the OP's question, but is it grossly overpriced or just slightly overpriced?

I own a gen PAM 74 and 162.

Declaring an item overpriced is not so much costs of the materials involved, but the time, effort, precision, and engineering that help me to determine the "overpriceness" of such a watch.

I'll use my 74 as an example.

It's the case construction, the precision, how separate parts just happen to fit flush within the case (CG), how well fine details and paints are applied on the bezel, the quality of the hands on the stems (if you have a loupe, you know what I'm talking about).

It's how well the chronograph pushers are constructed, where all the proper places are sealed and well-lubed, how parts not held together by screws are pressure-fit so tight that it takes great might to remove them.

It even goes down to how attention is even put into how the lug screws fit into the case, how both PAMs I own and every one of them I see has lug screws that fit flush to the case, no recession or otherwise.

It's even the simplicity of the dial and the reasoning that less = more.

There may be more, but I've seen other watches in this price range that pay less attention to the details.

[Victoria]

Declaring an item overpriced is not so much costs of the materials involved, but the time, effort, precision, and engineering that help me to determine the "overpriceness" of such a watch.

Very good points here and with your gen details below.

Would people agree that sometimes watches are under or overpriced, given the average wage?

In the 1950s, you could buy this Rolex 1951 beauty for less than U$400.

And the average 1951 wage was $2,799.16.

http://www.ssa.gov/OACT/COLA/AWI.html

50-something years later, and I wonder how much a similar Rolex with its complications, would cost if it were made? $9-10k?

The average 2006 wage in the USA was $38,651.41. I think a Rolex DJ and a 111/112 Panerai are priced JUST right, for the average middle-class person, whether or not you agree they're worth it. That's why they sell.

BTW, here is a Rolex price list: not Panerai, but I thought it might be germaine somehow.

http://www.mkmotorsport.com/Rolex%20page_600M.jpg

EDIT: Oops, correction. 1952 Rolex. It's from the Guido Mondani collection of 309 vintage Rolex watches:

http://www.antiquorum.com/eng/press/2006/0...ease_result.htm

"Lot 200 Ref. 8171, Stainless Steel, So-Called " Padellone" Rolex, "Perpetual, Officially Certified Chronometer". Made in 1952. Very fine and rare astronomic, antimagnetic, self-winding, stainless steel gentleman's wristwatch with triple date, moon phases stainless steel Rolex buckle.

Sold including buyer's premium: 187,000 CHF" (U$180,189)

Yipes.

[milsub5517]

nm

Edited March 5, 2008 by mil_sub

[Watchmeister]

A very interesting question. I am much more focused on the genuine aftermarket as I have always bought gens in the secondary market. Reps are worth whatever you think they are worth. And there is no question that PAM resale values are currently well ahead of any brand other than perhaps AP or Patek. I usually expect to pay 50-60% of list price for a well cared for previously sold branded watch. And those numbers can go even lower on some wonderful brands (VC, Jaeger, Lange, etc). Panerai is one of the very few that probably sell closer to 80% of list. And very often you can actually be paying more than list price for a model that was put out only a few years ago. In the current market a reasonable deal for a 2 year old 196 would be in the $6000 range. Now go back and look at the list price of that watch and you are paying close to 100% of the then list. This does not happen with many watches other than truly limited editions. The only other watches that appear to have similar resale characteristics are the AP ROO's which also put out numerous "limited edition" models and IWC Big Pilots. I am concerned that all these watches may all turn out to be the "Pokemon Cards" of branded watches. Okay, I am exaggerating but you get my drift. If you watch TZ or Watchnet these watches are the most traded.

I do think Panerai will have longevity. Why? The trend to larger watches is going on 20 years now (37-40-42-44) and still going strong. It obviously maxes out at some point. But even the old school brands (as evidenced by new Jaeger dive watches, HBB's, AP ROO, etc.) are participating in that trend. I also believe that having Richemont as your parent will further the cause. Having said all that, if I do buy a PAM gen I do assume that paying 80% of list puts you at risk for another 15-20% decline. But for now a combination of good positioning, limiting supply thru smaller runs of numerous editions and having a very affordable price point enlarging the potential customer base will continue to support these prices for some period of time. I will be interested to see how the $10,000 plus models fare. If I were a betting man I suspect the more expensive PAM's will decline faster. In general that is always the case. The more expensive the watch the faster the secondary value declines. When was the last time you saw a $50,000 plus watch which was more than a couple of years old go for more than 60% of list. And it makes sense as you have a much smaller target audience. On the newer more expensive 8 day PAM's it appears to me that their prices are declining more in line with other brands. I have seen a couple of 190H's trade in the $6k area well down from their list. So in a funny way you might say that if you are determined to protect value go to the lower end.

[Victoria]

I will be interested to see how the $10,000 plus models fare. If I were a betting man I suspect the more expensive PAM's will decline faster. In general that is always the case.

Massive reply, Kru.

Just to piggyback on your point, I am reminded of my and Dani's posts on the RIDICULOUS price of the Fiddies today. $20k, easy.

But you know, if someone had bought and kept their $400 Rolex in 1951, they'd be 180,000 dollars richer. I mean, Jeez, that's appreciation you don't see in many blue chip stocks.

I think people who are into watches sometimes know TOO much about watches, and consequently say to themselves, there is no way I am paying 20 thou for a Fiddy. It's not worth it.

But a wise man or woman could've made $11,000 in two years if they had bought one. Who are the losers now?

[Watchmeister]

Is that really the price for a Fiddy? I know one person who recently bought one and I will tell you the price was nothing like $25k. Similarly I had the opportunity to inspect a true 3646 with impeccable provenance immediately preceding a Christies auction. Christies accounts for 70-80% of the legit watch auctions. With all the hype of $100,000 WWII vintage PAM's the seller went with a conservative $70-90k estimate and very reasonable reserve. Well, it didn't meet its reserve and at the same auction the better Rolexes went through the roof. On a lesser note the La Bomba which is the first 1000 out of Panerai has been theoretically selling for $9k or so according to experts but in reality one which had never been worn just traded at $6k which is 100% of list and well below what people thought it was worth. Watch markets are very inefficient and as such we all have to think long and hard before buying if you don't know you want to keep it forever.

V-

You are right that if you are willing to keep a watch for many years you have a shot. But just think of all those 50's Rolexes that sell for $1,000. Kind of like cars. Keep your car for 20 years and you are either going to look like a genius or an idiot.

[Victoria]

Similarly I had the opportunity to inspect a true 3646 with impeccable provenance immediately preceding a Christies auction.

You lucky so-and-so!

You are right that if you are willing to keep a watch for many years you have a shot. But just think of all those 50's Rolexes that sell for $1,000. Kind of like cars. Keep your car for 20 years and you are either going to look like a genius or an idiot.

Is it better to be lucky than good? Because the watch expert is good, but the watch aficionado is lucky. Again I say, part of this is inductive reasoning, and just plain being able to sense a trend.

Sometimes knowing too much about watches takes away the ability of the latter (due to too much reasoning).

[longshot]

having owned a genuine pam in 2001-2002 i would have to say (IMHO) they are overpriced. i first saw them popping up on the knife forums in the late 90's and thought they were unbelievably cool. so i sold off a couple thing and bought an 001. and decided it was just not that special. and not very accurate. so it got sold.

for me, i get 95% of the pleasure i got from my gen pam with my reps. at a fraction of the cost

and to suggest that "panerai could be the next rolex" is kind of absurd. rolex has been around for a long time and is one of the most recognizable brand names on earth. i have been wearing gen (and later rep) pams for 7 years now and have run into exactly two people who recognized my watch as a pam. honestly i think if you covered the logos on a pam and asked 100 average americans what it was you would be extremely lucky to fine one that could identify the watch.

[sssurfer]

On a technical point of view no doubt, Panerai are overpriced.

Just, maybe not so much as one can think by looking at the movement only, though. There are a few details (crown guards, cyclops, sandwich crystals, sandwich dials, date on sandwich dials, linear PR gauges...) that are likely to contribute to the price in unexpected ways.

So, one might say that PAM price is driven by non-movement details at a higher extent than in, e.g., Rolex.

Or, in other words, that the Officine are investing more in fashion details than in function good basics -- at least in comparison with Rolex and some other brands.

What brings us straightforward to the second point.

When we include fashion in consideration, "overpricing" becomes a meaningless word, price being only driven by the law of demand and supply (as the 127 and 203 tales teach us, too).

In these ages where looking (especially looking rich) seems more important to common people than being (especially than being intelligent), this may reveal a winning long-term strategy.

So in the end I too think that Panerais are here to stay, and to progressively subtract increasing market areas to Rolex and other brands in spite of any overpriceness.

[ravishingrick]

Surprises me that the discussion about the price of Panerai's arises so frequently. People claim that the price of a Panerai using the ETA 6497-2 movements is too expensive. Basicly an ETA 6497-2 costs more the a ETA-775x or ETA 2892-A2. A tremendous amount of high end watch munufacturers use these same movements and price the watch similarly or more expenseive. What about the IWC chrono's, Hublots, Breitlings, Chopards, Mont Blancs, etc, etc the list is endless...

[t]

hold on guys

sure in fact nearly all watch brands are overprices, because luxury items.

But isn

[sssurfer]

Also are the new PAM "in-house" caliber TOTALY

Really?

Even so thin 8-10 days PR movements w/ PR indication etc?

[TeeJay]

I think people who are into watches sometimes know TOO much about watches, and consequently say to themselves, there is no way I am paying 20 thou for a Fiddy. It's not worth it.

But a wise man or woman could've made $11,000 in two years if they had bought one. Who are the losers now?

I'm of the opinion that no 'brand-name' product is actually worth it's inflated price tag. Wether someone will pay the price tag, is a different matter. Equally, just because someone is prepared to pay that price tag, I do not think that actually justifies said price tag in terms of product value for money. This is an opinion I hold thanks to generic products and reps, which, for my purposes, are quite adequate.

The 127 is a prime example. $20K for a watch is crazy. That money could buy a car, a deposit on a house. But. Is the 127 really worth that much money? If reps of it can be sole for say $200, which are functionally, just as good as the gen, and, with another $300 (tops) spent on modifications such as relume or cannon pinion fix, are aesthetically just as good, how is the rest of the cost justified? R&D? Designer's fees? Not that much, and, certainly costs which would have been recouped long ago. I don't think someone can know too much about something, especially if that opens their eyes to the rip-off world of Corporate Greed. Good job McCarthy isn't still around, he'd have me hunted down as a Commie

[Victoria]

$20K for a watch is crazy. That money could buy a car, a deposit on a house. But. Is the 127 really worth that much money?

Of course you know this, Teej, but just to say that Panerai are not charging 20k-25k for the Fiddy. That's the price appreciation between collectors.

I think they got it right with their original price, TBH. It's a very special watch.

However, on paper I agree -- I love Vacherons, but are they really worth $50,000? I mean, really and truly?

It's all to do with the times.

500 years ago, men died on the High Seas for some pepper and cumin. Now we can buy them for a few pennies at the supermarket. Tout passe, tout casse, tout lasse...

[Watchmeister]

IMHO things have changed dramatically. Richemont has done a great job of increasing brand awareness. They are more aggressively sponsoring yachting, watch events and the like as many larger brands do. They are showing up in big advertisements in the WSJ, etc. This is the Rolex formula. I have been curious whether Richemont would try and get PAM involved in Tennis or golf. I doubt it as PAM's are based on the whole nautical theme. Now they are trying to expand the brand with the Ferrari line and their own movements. Just give Richemont some time. They don't usually fail.

Two years ago I would see one every few weeks on the subway or in the streets. Lets face it. You can't miss them. Then two summers ago Panerai became the "it" watch for the Hamptons and showed up simultaneously big time in Hollywood. Like everything else of a style nature in the U.S. a brand typically starts on the coasts and works its way inwards. In NYC I now see them much less frequently than Rolex or Breitling, of course, but more frequently than just about any other branded watch with a list of $3,000 or more. Even more telling, if you walk down 47th street in NYC to the watch dealers it is a similar story. Two years ago they wouldn't even put them in the window. Today they occupy significant portions of their window space and if you ask them (I asked two) they are their most frequent sellers. You now can buy virtually any regular model and they get a strict 90% or so of list. If you look closely at the listings on the bay or on Risti you will see at least 4-5 NYC dealers regularly selling there. As I said earlier, I continue to believe there is real downside in the secondary market. In the long run they are likely to trade at the same 50-70% of original list. A combination of style and affordability of a "cool" watch has worked for the brand so far. AP sold 24,000 units last year. I wonder what PAM sells these days. I will tell you that there authorized dealers are still getting very little inventory. Something is going right.

As to what they worth, they are worth whatever you think they are worth. There is a 3 year waiting list for a $10,000 Hermes bag made out of leather. Is a Patek wrist watch really worth the value of a Ferarri? So if you like the aesthetics of PAM's - wear and enjoy them. Are they overpriced? Maybe but the question is relative to what. The ones I have bought buy tend to be older and/or rarer models. I am still deciding whether to keep them for 20 years and see if they become the Red Sub or sell them when I get bored. I am sure I will end up selling them when I get bored. But I am loving them now. And yes, my reps still get more wrist time.

[t]

Really?

Even so thin 8-10 days PR movements w/ PR indication etc?

of course... i don

[TeeJay]

Of course you know this, Teej, but just to say that Panerai are not charging 20k-25k for the Fiddy. That's the price appreciation between collectors.

Indeed, maybe not Corporate Greed as such, but, still a sign that all the time people are prepared to pay the price, people will charge it

It's a very special watch.

Sure, but, equally, to some, it could be considered a monstrousity (It's certainly a perversion of a watch, regardless of for or against ) I mean, the case is huge, the crystal is huge, the crystal permantly distorts the dial markings, the gold hands detract from the simplicity of the black hands of a regular Luminor, all in all, it's got more criticiseable points than plus points. Ooh, it has a nice clear dial... It looks nice... (depending on one's point of view )

I think much of it's mystique among gen collectors (I'm not really into the risti crowd, so can't say for 100% sure) could well be that it's a limited edition, thus more desireable to some collectors.

I think they got it right with their original price, TBH.

But, was it honestly worth that price either... Sure, it might have been a reasonable price as far as the rest of their catalogue goes, but, in term of actual materials etc, it's still a heck of a hike in price from $500 for something which will be aesthetically and functionally, just as good. 'Gen' is just a qualifier. No rep can ever be a gen, but, that doesn't mean that a rep can't be as good as a gen... If it was down to a bar 'wrist comparison', I'd put my money behind some of the more unique, and modified reps here, than some city boy's gen daydate...

However, on paper I agree -- I love Vacherons, but are they really worth $50,000? I mean, really and truly?

Really and truly, no. And, if they're not really worth the money, then how can any like product be worth the money?

500 years ago, men died on the High Seas for some pepper and cumin. Now we can buy them for a few pennies at the supermarket. Tout passe, tout casse, tout lasse...

If pepper and cumin where still being shipped in by people at risk from scurvy, floggings, and a run-in with BlackBeard, I'm sure the prices would be reflective of that Indeed, times have changed, but changed in various ways, and for various reasons. Until folks realize that, in the main, brandnames are a con, then prices will remain high.

The one example of a brandname product being better than a generic one, I can admit to, is a set of earphones I recently bought for my MP3 player. I bought a set of Apple-branded earphones for use with my phone, and my seperate MP3 player, as, the headphones for the player kept popping out of my ears, and, the set which came with my phone got damaged... Anyhoo, with the standard earphones which came with the MP3 player, I had to have the volume set at 20, just to get a reasonable playback (it was a cheap player, and one I've since made redundant with a Samsung player) with the new Apple earphones, 20 was not only loud, but exceptionally good quality playback. As with any soundsystem, better quality speakers means better quality playback. But. Were the headphones good just because they were Apple-branded, or, would other generic headphones (possibly by the same manufacturer) be equally as good? Also, when I was passing through London, I saw that the majority of people with 'white earphones', had the same model as I'd bought, so, from that point of view, they are clearly a good quality model, or people wouldn't be using them, and would replace them with an aftermarket set.

I think the real issue is one of product value compared to product price.

Edited March 5, 2008 by TeeJay

[Watchmeister]

Actually I think it is more about supply and demand. In luxury branded products it is up to the marketing department to develop that demand.