We write about watches on our finance blog for several reasons. The first is that watches measure consumer confidence. Hardly anyone needs a watch, and the few that do would be best with a Casio F91w, so there’s a lot to read into regional changes in demand for more tricksy and showy stuff.

The second is that Swatch and Richemont are listed, as is Watches of Switzerland, so it’s markets-adjacent content. Third, the privately owned watchmakers expect us to reproduce their hoopla while respecting their secrecy around business practices and frankly, we’d rather not. Fourth, our readers click a lot on stories about watches.

That’s why, when a new horological microbrand appears, we take notice. For example:

The Victory Tourbillon is the limited edition flagship of a range of watches sold by Trump, a multi-faceted leisure and lifestyle brand. The ticket price is $100,000, which made FTAV wonder about the mark-ups.

Tourbillon means there’s a rotating cage around a tick-tock bit. The idea is to make the watch mechanism more accurate by minimising the effects of gravity and, though it probably does nothing, people appreciate the extra engineering required.

Tourbillons have become a lot less special in recent years though, with Chinese factories churning out decent reproductions and simulacra of Swiss workmanship, and the Swatch-owned ETA movement maker able to supply the most fiddly bits in kit form. Only a few makers design their own movements from scratch and, at the super high-end, the arms race has moved to making everything as thin as possible.

Or, to put it as an old meme:

The Trump Victory Tourbillon isn’t particularly thin, but it does say “Swiss Made” on the dial, so it can’t be using a Chinese-made movement. (There are a lot of rules governing adverts of Swiss origin, including that a watch movement has to be assembled in Switzerland.) ETA only really makes movements for Swatch brands these days, which narrows things down further.

The website says:

The Trump Victory Tourbillon comes equipped with a Swiss-made TX07 Tourbillon. Each watch is composed of over 200 individual parts, all working in perfect harmony for outstanding performance.

. . . which means nothing. However, the page also includes a video of a movement in close-up with a distinctive symmetrical plate over the balance wheel:

That’s one tell-tale sign of a BCP T02. Designed by Olivier Mory, the T02 is a movement sold to small-batch watchmakers including Yema, Aventi and Louis Erard. Time & Tide says Mory discovered “the cheat code” for making Swiss tourbillons affordable.

Mory confirmed by email that he was supplying the Trump Victory Tourbillon movement to a third-party watch assembly company, adding:

We use the standard price list of our Tourbillon range which is around 4700 USD / movement for batches in the 100-200 size. We are usually very competitive in this batch size for a movement which is 100% Swiss Made. 

(Mory also sent us a schematic of the movement that lists suppliers for every cog, spring and pin. The information doesn’t add anything to this post, but in an industry addicted to secrecy and bullshit, such transparency is like a breath of fresh air.)

So anyway, we’re off. Movement: $4,700.

Another Swiss watchmaker that avoids woo-woo is Code41, which is sort-of a horological BrewDog. Members of its online community vote on designs and get detailed spec sheets for each build, including for the tourbillon it developed in 2022/23 in partnership with Olivier Mory’s BCP Tourbillon.

Code41 has a fair bit of detail on its website that breaks down the wholesale cost of watch parts. Quality and intricacy move the dial a lot but for a basic build, watch faces start at about $10 and cases can be as cheap as $25. Better quality might mean $50 for the face and $80 for the body, Code41 says.

Watch retail prices are typically six to eight times the assembly price, but Code41 only sells direct so says it applies a mark-up of 3.5 times cost. Its tourbillons sell for about £12,500 ($16,700), implying a wholesale unit price of about $4,800. It’s therefore reasonable to assume that, even for something aiming at the high end, the cost of bits other than the movement probably doesn’t add up to more than $200.

This won’t be true of the Trump Victory Tourbillon, which according to the website features “approximately 200 grammes” of 18 carat gold “across the band, case and buckle,” and is “decorated with 122 VS1 diamonds”. All we need to cost up is the acrylic backplate, the face and some fixings. We’ve gone cautious and added $200 for these items but judging by the photos that’s highly likely to be an overestimation.

Nevertheless, two-hundred grammes of gold is a lot of gold. It’s approximately the weight of a hamster, which puts the Trump Victory Tourbillon on the same weight category as big units like the Rolex Deepsea, which in gold has a US list price of $52,100.

Gold spot is $2648 an ounce at pixel time so 200 grammes of 18 carat is approximately $19,000 of gold.

Then there are the diamonds. VS1 means a diamond that’s slightly imperfect. It’s five notches below flawless, so if diamonds were rated like bonds it’d be approximately a BBB+.

But there’s not much in the way of information at this end of the diamond market. Certifying the quality of any stone that weighs less than a quarter of a carat (meaning about 4mm in diameter) is a waste of money. The stones encrusting the Trump Victory look to be 2mm at most, so even with the VS1 clarity rating, any estimate of value has to be a guess.

A single pinhead-sized diamond might retail at $15 (or a fraction of that when lab grown). Again, we’ll go cautious. It’s not unreasonable to think that 122 pinhead VS1-clarity stones would cost approximately $2000, though it might be much less.

Here are the scores so far.

Movement: $4,800
Gold: $19,000
Diamonds: $2,000
Face, fittings, etc: $200

Square the cost off to $25,000 to take into account of purchase timings, assembly, third-party bulk discounts etc and we’re probably in the right sort of ballpark. As Dolly Parton said, it takes a lot of money to look this cheap.

The big thing in Swiss watchmaking at the moment is hyper-premiumisation. The bottom fell out of the watch resale market last year, causing some pain among speculators and meaning waiting lists are much less of a thing, but the big brands have been able to counter lower volumes with higher average selling prices.

Swiss watch exports data for August showed precious metal sales by value up 21 per cent and steel watch sales down 10 per cent. Watches priced at more than SFr3,000 wholesale ($3500) were the only category growing, thanks probably to gold and platinum watches that cost on average 25 times more than their steel equivalents.

That still only means about 30,000 precious-metal Swiss watches sold per month though, with most of those sales happening in Asia or to Asian consumers. Morgan Stanley estimates that bling only makes up 2.6 per cent of the market by volume.

The top tier of Swiss watches (meaning Rolex, followed not particularly closely by Vacheron Constantin, Patek Philippe, Audemars Piguet and Richard Mille) accounts for three-quarters of the Switch exports by value. That’s the market the Trump Victory Tourbillon is competing in.

And the profit pool is even more unevenly distributed than those figures suggest. Privately owned Rolex, Patek and AP are raking it in, with estimated operating margins of about 40 per cent. But publicly owned watchmakers report operating margins of about 20 per cent for their watch divisions, which in part reflects portfolios that include halo brands. Richemont-owned Lange & Söhne probably can’t turn a profit, for example, in spite of routinely costing $50k+ per unit.

Morgan Stanley estimates that below the big sellers like Omega (Swatch) and Cartier (Richemont), “a large number of other brands in the listed groups’ portfolios were not covering their cost of capital.”

But of course, the Trump Victory Tourbillon is a built-to-order watch that’s being sold direct to consumers from one website that has a marketing budget of zero, because articles like this are all the publicity it needs.

There are very few operational costs to add to the $25,000 materials cost, so the operating margin is probably not much worse the ~75 per cent gross margin. If Trump sells all 147 Tourbillons that’s an estimated $11mm operating profit. That’s decent.

Nor are 75 per cent margins exceptional. Morgan Stanley estimates that Moonswatch, Swatch’s co-branded fashion disposable range that has sold more than 3mn units in the past two years, has a gross margin of about 80 per cent.

The difference is that Trump’s watch is in a market segment that’s dominated by a big five plus several hundred loss-leaders and vanity projects. These manufacturers have big fixed costs, as they are mostly vertically integrated, and run very high inventory levels. They are increasingly exposed to a very small segment of an Asia-reliant market that’s highly sensitive to FX, policy stimulus and capital controls. This makes them more fragile to any sustained downturn, in which operational degearing will be brutal.

Does that make Trump’s asset-light, demographically targeted approach to hyper-premiumisation a potential way forward for the Swiss watch industry and the wider luxury goods sector? No. Of course not.

Further reading:
— Is that the sound of a luxe watch bubble popping? (FTAV)
— What the Watches of Switzerland warning says about Rolex demand (FTAV)
— Watches have stopped (FTAV)

A FILM-maker quit his £500-a-month houseshare to live for free in a static caravan.

Using YouTube videos for inspiration, Benn Berkeley, 38, transformed the derelict 44ft shack into a cosy log cabin.

8

8

Advertisement

8

Despite having to rip all of the walls out after discovering it was riddled with damp, Benn now says that he’s created his dream home.

The 38-year-old lost all his work prospects as a freelance film-maker in 2020 due to the pandemic.

At the time, he was living in a house share spending £500-a-month on rent but realised he wanted a different lifestyle.

In August 2020, his brother took over a farm which had a static caravan on and asked Benn if he wanted it.

Benn leaped at the opportunity despite admitting it was a “fixer-upper” and started working on gutting out the caravan in September 2020.

After four months, he had transformed it into a off-grid cabin complete with a log burner.

Benn said he did everything apart from the electrics and plumbing himself after learning everything on YouTube.

Benn, from St Ives, Cornwall, said: “It wasn’t pre-planned, it was forced out of Covid.

He said: “When Covid happened, I lost all my work. It was a mix of having nothing to do and the opportunity to do up this static home.

“I had zero experience in building and DIY but there was an opportunity to do it up and live in it so I jumped in head first.

“Everything we learned was through YouTube, it was a really amazing and empowering experience,” he added

Benn spent £10,000 on the renovation – a fraction of the price of buying a property in the area.

Proudly speaking of his work, he said: “I completely gutted the place out.

“It is 44ft by 10ft. We had to support one of the walls as it was caving in – the first job was to make it safe.

“We changed the windows and then we realised there was a damp issue so we ripped all of the walls out – it was a completely open space.

“From there we had free reign to do what we wanted, originally it was two bedrooms with a bathroom and kitchen.

It is a very simple lifestyle which I think we have lost.

Benn Berkeley

“All of that went, we now have a double bedroom, bathroom, corridor and open plan living and kitchen space.”

Since moving into the cabin, Benn has made the place off-grid.

He heats his home with a log burner, uses gas bottles for his oven and his electricity comes from solar panels on the farm.

He said: “It is a very simple lifestyle which I think we have lost.

“There is an element of simplicity when you are living a life like this.

“I can govern myself a lot more, I am not pressed into working a certain amount of hours a week as I know my outgoings each month.”

8

Advertisement

8

8

8

8

Advertisement

Singapore continues to be the primary destination for all significant investors among the global financial centres. The country’s tourist and financial sectors are also booming.

However, why open a Singaporean business bank account? Establishing a business bank account in Singapore may present advantageous circumstances.  

Motives for opening a Singaporean business bank account

Companies should open a Singaporean business bank account. Understanding the significance of having an account in Singapore will help you to better understand why it could be a prudent investment. 

1. A secure and steady economy

For their operations to run effectively, businesses seek stability and safety. Investors can benefit from Singapore’s secure and stable economy. Its triple-A-rated economy makes doing business easy for you. 

You can safely preserve your assets by creating a business bank account in Singapore in case political unrest or economic turbulence affects your home base. 

2. Completely included in the world banking system

To access updated financial systems, businesses in Singapore need to register for a business bank account. It provides investors with cutting-edge technologies. 

Because of Singapore’s fully integrated financial system, opening such an account has even more advantages. A corporate bank account in Singapore gives you easy access to your funds in addition to safety and protection.

3. More favourable prospects for investing

Singapore is the main hub for investors. It consistently presents investors with fresh investment options. To handle your business capital, it offers you access to investment firms and wealth management choices.

Singapore has a strong economy in and of itself, and investors can benefit from regional markets there. To seize possibilities, investors must create business bank accounts in Singapore.

4. Safe banking with accounts in multiple currencies

Investments are possible in Singapore through multi-currency accounts. Additionally, it is a secure and safe banking procedure. Companies can use any currency to manage their finances and start transactions.

Singapore does not impose any limitations on investor transactions conducted within or outside of its borders. Consequently, to create multi-currency accounts with the lowest possible bank fees, investors need to register an account in Singapore.

5. Major banks are present in Singapore.

In Singapore, almost every major bank has a branch. For investors, it is a terrific opportunity. They have access to reputable banks all over the world to manage their assets and money.

There are many prestigious and well-regarded domestic banks in Singapore. Investors who register a business bank account in Singapore can take advantage of those institutions’ many benefits.

6. Simplicity of use for online bank accounts

Prospective investors are constantly searching for methods to reduce the transaction fees levied by banks. They want their company bank account to be as simple to use as possible. Investors can accomplish this by opening a Singaporean corporate bank account.

The DBS digital bank accounts are becoming increasingly popular among Singapore’s corporate investors. Investors can effectively manage their corporate accounts using digital bank accounts.

7. Using a company bank account makes tax filing easier.

Registering a business bank account in Singapore has various benefits related to compliance. It provides the convenience of conducting business internationally. Having such an account in Singapore can facilitate the tax filing procedure. Business banks in Singapore help you with every little aspect related to business bank accounts.

The purpose of opening a business bank account needs to be made evident to investors. It provides protection and security for the money, assets, and transactions.

Investors should register a business bank account in Singapore right away. The possession of a Singaporean business bank account entitles you to a host of advantages.

Good morning. Austria’s far-right Freedom party (FPÖ) is projected to win a historic electoral victory in yesterday’s parliamentary election with just under 29 per cent of the vote. As our Europe editor writes, victory for the FPÖ, which has embraced increasingly hardline and extremist policies on immigration and the war in Ukraine, further consolidates pro-Russian, anti-establishment forces in central Europe.

Today, I reveal EU crisis talks on how to respond to a rapidly unravelling situation in the Middle East, and our Rome bureau chief reports on the surge of pro-Trump, pro-Russian rhetoric in Italy.

Carnage

EU capitals are organising an emergency meeting of foreign affairs ministers to respond to the rapidly escalating conflict in the Middle East, as Israel’s assault on Lebanon and the Hizbollah militant group ramped up during a weekend of devastating missile attacks.

Context: Israel’s bombardment of Lebanon over the past fortnight has killed more than 1,000 people. On Friday, a massive missile strike on southern Beirut killed Hizbollah’s leader Hassan Nasrallah. Israel also widened the conflict with attacks on Iran-backed Houthis in Yemen yesterday.

EU diplomats and officials, whose calls for a ceasefire and de-escalation have been ignored by Israel, were last night working to arrange a virtual meeting of the bloc’s foreign affairs council, people familiar with the talks said, with some pushing for a discussion as soon as today.

Separately, the European Commission yesterday released €10mn in additional humanitarian aid to Lebanon, which it said would provide “the most urgent needs such as protection, food assistance, shelter and healthcare”.

The new tranche takes the EU’s total humanitarian aid to Lebanon this year to €74mn.

Israeli Prime Minister Benjamin Netanyahu this weekend insisted that Israel’s “work has still not been completed” and that his armed forces would continue to attack Iran-backed militants until it had succeeded in “changing the balance of power” in the region.

“There is no place in Iran or the Middle East that the long arm of Israel cannot reach,” Netanyahu said.

EU capitals have in recent days repeated their pleas for citizens still in Lebanon to evacuate as soon as possible, and some are drawing up contingency plans for emergency evacuations.

Chart du jour: Downward slope

The ECB is expected to cut rates again next month, according to economists’ predictions, in response to a string of recent indicators pointing to the Eurozone’s slowing growth.

Billboards in Rome

Italian Prime Minister Giorgia Meloni has been a staunch supporter of Ukraine’s battle against Russian aggression. But not all Italians share her zeal, writes Amy Kazmin.

This weekend, deputy premier Matteo Salvini expressed hope that Donald Trump would win the upcoming US presidential elections — to bring a quick end to conflict.

Context: The EU has stood firmly behind Ukraine in its fight against Russia, but pro-Russian voices have slowly grown and could be encouraged by Trump’s re-election. Czech former premier Andrej Babiš has also expressed his support for Trump. A comeback for him in elections next year could cement Europe’s illiberal flank led by Hungary and Slovakia.

Salvini, who is a longtime Putin admirer, echoed those sentiments.

“Because for me war is horrible, I hope the Republicans win,” Salvini said. “This is my personal opinion . . . Whoever will contribute to the end of the conflict that brings death, destruction and hunger to Russia and Ukraine, I will be happy.”

He also said Italian weapons sent to Ukraine “cannot be used to unleash World War III bombing and killing in Russia”. Rome has donated SAMP-T air defence systems to Kyiv.

Meanwhile, mysterious billboards have gone up in a dozen Italian cities over the past days proclaiming “Russia is not an enemy” and urging Rome to halt military support for Kyiv. Authorities are investigating who put them up.

Beniamino Irdi, a senior fellow at the Atlantic Council, said Russia and its supporters were eager to stoke public opposition to support for Ukraine.

“The Russians have been fighting two wars — one is the military effort on the ground, and the other is the cognitive and propaganda campaign against the west,” Irdi said. “Italy is one of the hottest fronts because it is perceived by Russia as a weak link in the chain.”

What to watch today

1. French far-right leader Marine Le Pen goes on trial over accusations of embezzling EU funds.

2. UK minister for EU relations Nick Thomas-Symonds meets commission executive vice-president Maroš Šefčovič in Brussels.

3. Mario Draghi discusses his EU competitiveness report in conversation with Bruegel, from 1230.

Now read these