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Royal Oak Reference 5402 Sales Numbers

One premise of economics is that human behavior often follows certain predictable paths. It isn't always the case, but it often is. For example, every semester I poll my students with a certain question and every semester the results of the poll are perfectly predictable because there are two laws in economics which almost always hold. Of course, I would be hypocritical if I didn't also follow a predictable path and I'd venture to say that I follow a law of behavior that applies to almost all empirically-oriented economists. It is this: when we see a table of data we want the spreadsheet.

Yesterday, I virtually attended a talk hosted by the Horological Society of New York entitled "The Royal Oak: from Iconoclast to Icon" delivered by Audemars Piguet's Heritage and Museum Director (Sebastian Vivas).
A fairly rare red-dialed Audemars Piguet Royal Oak I photographed at a Phillips Auction preview.
The Royal Oak is a horologically famous watch design celebrating its 50th anniversary this year, you can read more about it here. Sure enough, Mr. Vivas presented a slide during the talk and I immediately wanted the spreadsheet.

Unfortunately, a data-driven economist in these circumstances ultimately ends up doing fairly khafkesque work. That is indeed the case when it came to the Royal Oak sales slide. At one point I kind of chuckled at the fact that somewhere in Le Brassus, Switzerland on a bit of computer memory, there is a spreadsheet of numbers that was converted into a slide deck. The deck was put up on a screen in New York City, converted into bits that went across the internet via Zoom, landed on my computer monitor, I captured the picture, processed it with image manipulation and OCR, and now I have the spreadsheet which still sits on the drive in Le Brassus. The norm when it comes to communicating numbers seems to involve entropy that often has to be reversed.

In any event, I decided to offer the resulting spreedsheet for download, it is available here. I'd just kindly ask that if you use this data, you thoroughly document the source to include Mr. Vivas, the talk at HSNY and this humble blog. Throwing a few links back to these sources would undoubtedly be appreciated.

I also wanted to offer a somewhat barebones analysis of the data and my own interpretation of the numbers.
Sales trend of all AP Royal Oak reference 5402.
Let's begin with the figure presented here. Some have claimed that the Royal Oak didn't find many buyers when it was introduced. The data certainly doesn't match this claim. A sale of almost 500 examples during the first year of availability does not strike me as a lukewarm reception given that AP was a fairly small company in 1972. There was double digit grown in sales (between 10 and 17%) in '73, '74 and '77. There was a decline in Royal Oak demand in '75 and '76, but these were the years when the OPEC-induced energy crises was really starting to bite. It isn't surprising that sales of a watch, or anything really, slumped in those years.

In 1977, sales of steel Royal Oaks decreased by an additional 15% but AP found a solution to this retrenchment in demand: make the watch in precious metals. This is apparent in the next figure, presented here.
Sales of AP Royal Oak reference 5402 broken down by metal.
In '77, the sale of two-tone (steel and yellow gold) and yellow gold references allowed total 5402 sales to resume double-digit growth, which lasted one more year. Following the 1978 peak in 5402 sales, demand declined year-in and year-out. By 1990, sales were hardly noticeable. However, the Royal Oak Offshore was just around the corner which was then followed by many additional riffs on the theme. AP thrived in no small measure due to the enduring popularity of Royal Oak variations.

One final note on this data: there is one lonely 5402BC which was sold in 1972, roughly five years in advance of the other precious metal examples. The provenance on this progenitor white gold Royal Oak is undoubtedly fascinating. We can only hope that in future years the story is told.


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