It has been more than two years ago since we last looked at the most valuable watch brands in the world. What has changed two years later?

On the very top not much. The top 4 brands still remain the same. Rolex followed by Omega, Cartier and Patek (all rankings and numbers are property of BV4).

Rolex alone gained over CHF 400m in brand equity strength since the last ranking in 2013. Rolex continues to be the leader led by the strong brand name, the great new introductions of the new Daytona with black bezel (a nod to its illustrious past).

Omega, the cash cow of Swatch group still is strong at second place. No doubt the latest Bond Film helped Omega and the new speedmaster limited editions are being well received by the market which bodes well for the future value of the brand.

In third place Cartier, the big cash cow of  Richmont group remains firmly in place three. It seems the red box is still in demand. In fourth place is Patek, the only family owned firm to be among the top most valuable brands worth more than CHF 1bn.

What is interesting to note also in the rankings is the following: The two brands that gained most in value are relatively young brands and both owned by the LVMH Group: Tag Heuer and Hublot both gained 11% more than any other brand. 

What has changed since the past two years are two things: China slowing down & the Apple introduction of the smart watch.

China’s slower economic growth together with the crackdown on corruption on gift giving has negatively impacted the watch industry. The Swiss watch industry just showed its 11 consecutive monthly export drop now in May 2016  led by a weakness in Asia. Given the China slowdown the Swiss watch industry is holding up quite strong in terms of brand strength.

The smart watch introduced by Apple is likely to impact those companies on the lower end of the price spectrum.

However I think companies like Cartier, Patek and Rolex are relatively safe in term of market share for the moment. The buyer of the Apple smartwatch is looking for functionality whereas the buyer of Patek and Rolex are buying out of other reasons: Status, aspirational behaviour, quality in craftmanship and personal style. It is thus no surprise that the top 4 brands have not suffered much as they are on the higher end of the price spectrum (Omega excluded).

Before we look at the ranking below a quick comment on the methodology used how to calculate the numbers. 

How is this ranking calculated? Is it based on enterprise value? Or based on purely the value of the brand power of each watch brand and thus on brand equity? Looking at the values it is clear that only the earnings power of the brand is calculated – which includes brand equity (an intangible asset based on the power of purely the ‘brand’). If the enterprise value of the brand were used then Rolex, assuming they did around CHF 6-7bn of sales in 2015 would be valued at somewhere between CHF 50 – 70bn, clearly much higher than the CHF 5.4bn indicated below. 

As BV4 who did the rankings states: 

Our ISO-certified valuation method determines brand value as the earnings of a watch manufacturer that are solely attributable to the brand. In practice, brand value corresponds to the sum of future brand-specific earnings discounted to the present value.

For more on the way BV4 calculates the watch brands value please see our interview here from 2013/14. It is still relevant today.

Lets look at the most valuable watch brands in the world in 2015/2016.

(NB: Please note the comments after each brand are my own personal comments and have nothing to do with BV4 who supplied the numbers. All the numbers and rankings and methodology used are property of BV4 consulting. For more information please see the groups website here.) All figures below are in CHF (swiss francs).

by Edmond Saran