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RECOMMENDED READING: Do watches hold their value during a downturn? RECOMMENDED READING: Do watches hold their value during a downturn?

RECOMMENDED READING: Do watches hold their value during a downturn?

Nick Kenyon

Much has been written about the growth of the pre-owned watch market in recent years, but just how long has this been happening, and will watches hold their value during a recession? With consecutive seasons of watch auctions breaking all-time records, luxury conglomerate Richemont spending an estimated €200m to acquire second-hand dealer Watchfinder & Co just over 12 months ago, and brands such as Audemars Piguet announcing their intention to sell their own pre-owned watches, there is a current land-grab for control over the lucrative pre-owned market.

Rolex Paul Newman Daytona watches hold their value
The Rolex Daytona ref. 6239 owned by Paul Newman, which sold for AU $23,092,206 in 2017. It is the most expensive wristwatch ever sold at auction.

Beyond specific pre-owned markets, something is happening in the retail watch market too, which Sandra discussed in her frustration at the combination of waitlists and the premium over retail for certain models. In 2019, stainless steel is literally worth more than its weight in gold. But the phenomenon of waitlists feels recent in the watch collecting world, with some Rolex professional models being relatively easy to buy at retail only a half-decade ago.

2019 Rolex GMT Master II 126710 watches hold their value
The 2019 Rolex GMT-Master II 126710, with a retail price of AU $12,250. At time of writing, the cheapest example of the same watch on pre-owned marketplace Chrono24 is AU$25,017.

In actual fact, this uptick in the pre-owned market began a lot longer ago, with the FHH Journal observing strong auction results in 2008. That’s right, if you wanted evidence that the watch market behaves a little differently, this article was published only a couple of months after the US Congress passed the Emergency Economic Stabilization Act of 2008, indicating that the pre-owned watch market was fairly well insulated from the broader economic downturn.

As far as watchmaking items are concerned, auctions in 2008 have totalled some US $83 million, a remarkable surge compared with the US $55 million recorded in the preceding year. Even last May, a Patek Philippe “Perpetual Calendar” (Ref. 1526) was sold for US $4 million, an absolute record for a steel watch. And since the autumn sales have not suffered the repercussions of a financial crisis which has led us to fear the worst, we have to assume that this is due to the intrinsic value of these models, and the arrival of newcomers on the market.

The article goes on to say this is not the first time the watch market has responded to a slowdown. Taking comment from the former head of Sotheby’s Watch Department Alexander Barter, he observed similar behaviour after the events of September 11 2001.

…we might have feared that after the events of 11th September the market would experience a certain downturn. But precisely the opposite happened. Because there was a lot of available liquidity in large fortunes as a result of reluctance to invest in markets that had totally collapsed, some of this money was invested in valuable horological items, because of their price stability, and also perhaps in the hope of future gain.

While these comments might be unsurprising to some, this at least gives some historical context to those frustrated by 200 per cent premiums on the retail prices of some pieces today.