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The warranty isn't part of the contract of sale (hence all warranties stating that they're in addition to your statutory rights) but you can legitimately expect them to be honoured.
However, in this case (as with most long term warranties) they only warrant to "repair or replace" and to choose which at their discretion. They also don't specify that they'll replace with the same item.
Both of those are reasonable restrictions on a lifetime warranty because repair may not be possible forever (spares they buy elsewhere - like movements - may go obsolete) and the same model won't be available forever. They'd have to keep massive back stock of obsolete models which would either be kept running - and so wearing out themselves - or not running and suffering from lack of use.
So they offer "equivalent" replacement which they seem to define as replacement to an equivalent value. If there isn't a similar model at similar value when you need to call on the warranty then that's basically bad luck. Unfortunately for the OP it's their warranty and up to them to set the definitions.
Having said all that, not having spares or spare stock for a relatively recent model is pretty poor service - the two big Japanese makers provide support for at least years after a model is discontinued and Sekonda (at the lower end of the market but fantastic value) can support some models right back to the 1970s!0
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