This is as best a recount of events as I remember, and please forgive me if I do make any mistakes. As always, do your own research before buying.

On 29 July 2025, in the Imperial Ballroom of The Hilton, Mr Michael Tay, CEO of The Hour Glass, regaled us with a tale from the imperial court of China.

In 1601, an Italian Jesuit priest, Matteo Ricci, became the first one from Europe to visit the Chinese court. Amongst the things he brought were 2 mechanical timepieces - a striking clock, and a chiming clock.

Tay used that example to demonstrate how important watch collecting was to the Chinese people, but also to show how difficult it was to penetrate the Chinese market.

In every market, there are flagship partners. And for the Chinese market, The Hour Glass simply wasn’t one of those. Some might worry after hearing that, especially in light of all the conversations around the rich Chinese market, and how one should capitalize on that.

But one should not discount The Hour Glass, or the cultural deftness that Michael Tay has portrayed over the years.

His focus over the past few years, has been on working the Australia market, extremely patiently.

In fact, my favorite quote that day was this.

If there’s anything we have in abundance, it is patience.

Australia, the undiscovered outback

In 2014, The Hour Glass bought 192 Pitt Street in Sydney, a prime commercial property for a cool A$32.8 million. There did not seem any reason to do that.

And for the next 6 years, there was nothing done to the building - beyond leasing it to tenants. And then suddenly, in March 2021, it became a Rolex standalone boutique, becoming “Australia’s most prominent Rolex stand-alone boutique” (described in The Hour Glass’ 2020 Annual Report).

Why buy such a property? Because when big brands decide which partners to keep, it helps if you have something more than just a retail network.

If you’ve prime retail space that you control, and can renovate, and do whatever you’d like with it, it gives the likes of Rolex and Patek less reason to leave you.

But more importantly, they went from 6 boutiques in 2019, to 15 across 6 cities by end 2026.

That’s a lot of money. And you should never underestimate the Australian wallet.

Right sizing the network

Michael Tay did not exactly say how many stores he closed, but one investor was complaining about the stores he used to see in Tampines, and how that was now gone.

It’s true. The market has gone premium, and The Hour Glass has gone with it. Rather than trying to sell cheap watches below $8000, it has gone deeper into the luxury brands. It has not tried to be many things to many people.

Just pure luxury watches.

Why you buy property?

Another Italian investor was asking about Tay’s purchases of prime property in Australia, given that they could always lease.

But Tay was clear. If they were just going to offer leased units to the likes of Rolex and Patek Philippe, there didn’t seem to be any special reason why these watchmakers should go with them.

So on and on The Hour Glass bought, and slowly strengthened their position within the watchmakers.

In 2021, Tay recounts a conversation he had with Stern, the CEO of Patek Philippe. Tay had done a count of the dealerships that Patek had, and told Stern, “You need to start closing stores now.” In 2021, Stern didn’t believe him.

By the next year, Stern agreed. And Patek committed to reducing their store count by 30%.

But The Hour Glass hasn’t been as affected, because of two reasons.

Trust is the inescapable currency in luxury retail

Firstly, they have continued to be a trusted partner, offering the best retail locations - that they control.

But more than that, The Hour Glass has continued to show itself as a partner that can offer insight into retail. Just look at the earlier example. You’d have thought that The Hour Glass would tell Patek to expand. That would make more money for The Hour Glass!

But they didn’t. They asked them to slow down and reduce their retail network. And Patek realised they were right.

Over and over again, The Hour Glass has shown itself to be aligned to the long term interests of these watchmakers. Michael Tay was clear when he was asked about growth.

Those aren’t the goals of watchmakers. They are aiming for 3 to 4% per year.

For The Hour Glass to do what’s best for the watchmakers, rather than eking every dollar out for themselves, is an incredible joy to watch. Because when you see how Michael talks about watches you see someone who loves watches, and just happens to sell them to share his love for them.

He didn’t go into watch retail because it was the best business.

He went into it because he sees watchmaking as the ultimate art.

You can see how much these watchmakers trust The Hour Glass. In March 2025, Patek chose to open a boutique in Ginza with The Hour Glass, the premier shopping district of Japan.

Secondly, The Hour Glass’ focus on storytelling through its documentaries and articles has simply been a cut above the rest. Just look at Cortina. All Cortina tells you is where to buy your watch.

Instead, The Hour Glass has organized things like IAMWATCH, a flagship event that brought together the world’s leading independent watchmakers under one roof last October.

Don’t believe me? Just look at Patek’s store reduction over the years, and how much that has affected The Hour Glass, compared to its closest competitor. Whilst other competitors have lost 50% of their previous dealerships, The Hour Glass has only lost 3. They went from 15 to 12.

Granted, The Hour Glass, under Michael Tay’s leadership has done pretty well.

But the Italian investor had another ace up his sleeve.

But you pay yourself pretty well…

The Italian investor went on,

but you pay yourself pretty well too…

Michael Tay was unabashed and admitted that he paid himself well. But he added,

it’s in my contract that I can fly business class.

But I don’t for domestic flights.

I think Michael meant short haul flights, but either way, it’s evidence that despite their wealth, they are not flaunting it around.

He cheekily added,

you can try running it.

Let me be clear. Michael was definitely not trying to defend himself. But he was honestly trying to explain how difficult it was to run a watch business when the economy was looking increasingly precarious.

Michael Tay pointed out how his net margins of 11.7% were not too shabby compared to the other retailers like Cortina, at 7.9%.

Michael Tay also shared his aversion to debt, saying that seeing what happened with his family helped him to see the wisdom of keeping little to no debt.

In a world which is becoming increasingly polarized between those who have, and those who have not, you might wonder why people would still buy an expensive watch. Or an expensive work of art.

Well, for years, I never understood it. After all, all I had was a simple Casio, from the days of the army.

But now I think I know why. Because a luxury watch isn’t about the signaling - that I’m rich and you’re not. The richest people don’t have to flaunt that. In fact, they hate flaunting it.

You rarely ever even see the watch they wear, nor would they tell you about how expensive it was.

What one really pays for in the luxury watch is, I think, certainty. It is an expression of assuredness - I have so much money that I can spend $100,000 on something as useless as a watch.

But on a deeper level, it is also paying for the certainty that come what may, human endeavor will prevail. That as you observe every second that artfully ticks away on the watch, you are reminded that humans have always sought to bring order, even to something as chaotic as time, and we might just do it again in these troubled times.

 

John is the founder of Media Lede, which designs annual reports.