Swatch Gives New Meaning To Investment Dressing

If you didn't buy Microsoft stock when it went public for peanuts in 1986, here's another missed investment possibility that will make your day: That same year you could have plunked down $50 for a Swatch wristwatch designed by pop artist Keith Haring that might be worth as much as $5,555 today.

Yes, we're talking about one of those plastic, techni-colored watches with plastic bands and hands instead of digital readouts. Their looks change each season according to the fashion whims of the Milan, Italy, design team and guest artists who design them, making Swatch the watch industry's equivalent of trendy T-shirts or costume jewelry.

But the company's policy of producing each design for a limited time has had an ironic result: The inexpensive watches that were originally marketed to trend-conscious teenagers as an alternative to Japanese digital watches have become collectors items. Watches that were meant to be bought several at a time and changed with each outfit are being stored in bank vaults.

At a 1990 Sotheby's auction in Milan, and a 1991 Christie's auction in Zurich, rare Swatch designs in mint condition brought from $150 for a 1988 model called "Roses are Forever," to $25,432 for a limited-edition Swatch designed by Italian artist Mimmo Paladino. Members of recently organized Swatch collectors' clubs in Europe and the U.S. study new models in coffee-table sized catalogs and buy and sell rare watches among themselves.

At the downtown Seattle Bon Marche, where 563 Swatch designs are on display through Sunday, collectors have been poring over this season's designs, trying to guess which will become the most sought after. They have also been snapping up the limited inventory of Swatches from previous years' collections that the company has pulled from its back stock and is selling for the same prices at which the watches were originally sold.

The Swatches on display, and the back models for sale, are from the company's first collection in 1983 through its 1991 designs. Swatch produces between 40 and 60 new models each year, said Amy-Beth Chamberlin, Swatch exhibit director. Not all of its previous models are on display or for sale.

"Swatch works like haute couture," she said. "There is a spring/summer season and a fall/winter season. The watches are sold for six months only, they're not discounted and they aren't made after a certain date."

Chamberlin says Swatch doesn't know which watches will become the most valuable on the resale market and that the company steers clear of predicting future prices.

"Sometimes it's the watches with the fanciest bands and fanciest faces that become valuable," she said. "Sometimes it's because of the artist who designed it. Or it can be because of a particular color. The color yellow doesn't sell well. So Swatch doesn't make many. So when they do, they become valuable."

For Swatch enthusiasts, the promotion has been like offering car collectors the chance to buy a never-used, 30-year-old Porsche for its 1960 price.

It enticed Chong Stewart and her husband, James, to drive from Puyallup within the first hour that the back-stocked watches went on sale Friday. The Stewarts, who already own 46 Swatches (most of which they keep in a safe deposit box) got into collecting by accident.

"We started buying them for our four kids," said Chong Stewart. "We bought a set of the four Keith Haring watches so they could enjoy the art. We didn't know they would become so valuable."

The Stewart children no longer are allowed to wear the watches designed by the now deceased Haring, and their parents have replaced the Harings with less valuable models. But Chong, who has been in touch with Swatch brokers, estimates that her collection, which cost her about $2,000, is now worth close to $20,000.

A man in his 30s who described himself as a Seattle artist, but who wouldn't give his name, bought four Swatches from previous years' collections soon after The Bon opened Friday. He said he owns 250 Swatches and has been collecting for four years. He started, he said, "because they're beautiful. Now I pretty much buy anything that's new." He said he recently sold for $750 a limited edition watch called "Hollywood Dream" that cost him $80 when it was new in 1990.

Swatch puts out special Christmas watches each year that sometimes cost more than the $40 that still is the price for basic models. "Hollywood Dream," a Christmas special, had a band and face covered with rhinestone-like faux gems.

Swatch's history is a marketing Cinderella story. A division of Swiss Corp. for Microelectronics & Watchmaking Industries, known as SMH, Swatch was created in 1983 as a last-ditch effort to grab the watch market back from the Japanese, who had captivated consumers with digital display watches.

Though SMH, based in Zurich, Switzerland, also produces and markets such prestigious and pricey watch brands as Omega, Longines, Hamilton and Rado, the company in the early '80s devised a way to make durable, low-cost watches by reducing the components in a standard quartz watch. Production costs were slashed enough to make the Swatch label competitive with inexpensive Japanese watches.

Swatch also took a cue from the fashion industry and started changing designs each season. Starting with unadorned black, brown and khaki generic models in 1983, the designs became increasingly trendy.

In 1984 the "Skipper" series had a nautical red, white and blue theme. That same year the first "Jellyfish" or all-transparent model was introduced. (A 1984 Jellyfish brought $17,094 at the Sotheby's auction in '90.) By 1990 Swatch was selling such artsy lines as the "Medieval" series, which included watchbands decorated with Gothic lettering, and a line inspired by African art.

Always nodding to social trends, late '80s lines included a conservative gray pinstriped "Wallstreet" series, and a model called "Hacker's Revenge," which was covered with Day-Glo circuit-board motifs.

Marketing Swatches as fashion as been so successful that SMH is now one of the two biggest watch producers in the world along with Hattori Seiko of Japan, the maker of Seiko and other watch brands.

And it appears that the watches also have caught the fancy of those who figure that $40 invested in a watch is at least as good a gamble as many other investments.

Paul Davis, a young Seattle software designer, already owns six Swatches, including one of the coveted Haring models. He says he regularly wears all but the Haring. Though Davis doesn't describe himself as a serious collector, he was contemplating buying more, and was considering joining the collectors' club.

Studying a dozen or so watches on the counter in front of him, he said, "I may have another six or seven more by the time I leave."