GLASHUTTE, Germany — A. Lange & Söhne, a watchmaker once expropriated by the Cold War communists of East Germany, is celebrating its 160th anniversary with a timepiece that's so expensive only staunch capitalists can afford it.
Its priciest watches to ever hit the market, it's called the Tourbograph and retails for $460,000.
But what's more stunning than the price tag is the fact that the Richemont-owned company has already managed to sell 50 of the 51 pieces that make up the limited-edition run (one is destined for the company's museum) and not a single watch has been made. Since each platinum watch is so complex and features hand-engraved components, it will take years to fill all the orders.
Tourbograph orders reflect an overall strength in the luxury market, A. Lange & Söhne executives said. Although they declined to give financial forecasts, the executives expressed optimism for the Christmas season and beyond, especially in the critical U.S. market.
"There has been a strong development of new complicated watches," Fabian Krone, A. Lange & Söhne's chief executive officer said in an interview at company headquarters here. "The market is getting quite big."
Richemont's watch division saw its operating profits for the six months ended Sept. 30 spike 64 percent to 118 million euros, or $138.7 million at current rates. Sales advanced 23 percent to 522 million euros, or $613.6 million. In addition to A. Lange & Söhne, the division owns watch brands such as Jaeger Le Coultre, IWC, Panerai, Vacheron Constantin and Baume & Mercier.
Janice Davies, a luxury goods analyst at Lehman Bros., said there is particularly strong demand for watches in the U.S. and Asia. She also noted how high oil prices have generated wealth in the Middle East and Russia.
"You would be surprised at how many people out there will take the [Tourbograph] up," she said.
Meanwhile, Krone warned that A. Lange & Söhne's future growth and potential expansion to new markets such as China requires more skilled workers. The company's factory hosts a watchmaking school to train the next generation of timepiece assemblers and toolmakers but it takes between six and nine months to handcraft and engrave the components of a single watch, while the Tourbograph requires more than a year. All in all, the company can make only a couple of thousand pieces a year.
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