The dos and don’ts of buying a high-end watch
Few people can have failed to recognise that, in the past five years, watches have become a new asset class. Extraordinary prices reached at auction for previously ordinary watches - starting in 2017, when Paul Newman's Rolex Daytona sold for more than $17 million - set the ball rolling, and as more and more watches started to make headlines, increasing numbers of people began to take notice.
The enforced house arrest of lockdown, and the 'free money' situation that accompanied it for the lucky few, led to more interest, with some testing the waters by buying and selling accessible models. All of a sudden more people than ever before wanted watches - but only certain ones. Audemars Piguet Royal Oaks, Patek Philippe Nautiluses and Aquanauts, and just about anything from Rolex.
But 'I want' doesn't always get. Today, demand greatly outstrips supply for the most popular pieces, and brands are generally unable or unwilling to increase production for fear of flooding the market.
The one thing experts all agree on is that watches are a growth area for investors despite the stratospheric prices. 'Look at the Rolex Daytona,' says Burlington Arcade dealer David Duggan. 'It may carry a big premium, but over a decade or so, it will still rise in value. It has been this way since 1989. Prices dropped slightly in 2008, but they quickly bounced back. What other product has kept its premium for 33 years? I hesitate to say it, but certain watches are almost recession proof.'
Duggan's neighbour David Silver of The Vintage Watch Company agrees: 'The market is so much more mainstream now, it is not just collectors we are dealing with but normal people who want to wear their watches and enjoy them. This means pieces are being held on to and not sold as often.'
But Rebecca Ross, head of sales at Christie's watch department, encourages buyers to follow their hearts and not fixate on potential profits. 'Watches are synonymous with art and should be appreciated as such,' she says. 'They can be a good investment, but they are also a way to hold on to memories and can be heirlooms passed down from generation to generation.'
On that note, if you are ready to take the plunge, what is the best way to go about it in today's feverish market?
Buy what you love
While it's only natural to want to buy from a brand that will hold its value, all the experts agree that it is even more important that you actually like the watch you buy. 'Don't be guided by others telling you this watch is better than that, or this colour is more sought after... if you don't love it you will ultimately never wear it,' says Silver.
Finding your perfect watch should be an adventure not a chore. And even if you find something that you love at first sight, remember that you don't have to buy it immediately. As Phillips watch specialist Chris Youé says, 'Try the watch on and come back a few days later to see if you really love it. Fomo is the enemy of a long-term purchase.'
Do your research, set your budget and take your time
Decide what brands you are interested in, remembering that you don't have to stick to the obvious names. Many manufacturers are pretty safe bets for holding their prices, says Duggan, among them Omega, Breguet, Cartier, Vacheron Constantin and Jaeger-LeCoultre.
Once you have narrowed your choices down to a maximum of five models, take a look at sale prices at auction houses, and on online pre-owned retailers and marketplaces such as Chrono24, WatchBox, Watchfinder and Subdial to find out how big a saving you may be able to make by buying a second-hand watch.
When you're sure you know the watches you're interested in, visit your chosen retailer - or retailers - to talk to a watch specialist face-to-face. As Harrods head of fine watches and jewellery Beth Hannaway says, 'Researching online is super important. But you'll only know it's the watch for you by trying it on.'
Depending on the price of your chosen watch and the complications it features, there will also be practical considerations of ongoing costs. Youé suggests that you factor these in from the start. Does the seller or brand have a good reputation for aftercare if something goes awry? Do you need a safe, and will your insurer want a big premium to cover the cost of replacement?
Finally, are you prepared for longer-term running costs of service? This usually should be done every three years (although technical advancements in modern watches can reduce this to as infrequently as every 10). Taking Patek Philippe as an example, prices can range from CHF120 (£109) for a simple battery replacement to CHF2,300 (£2,000) to service a complicated watch such as a chronograph with perpetual calendar, and even more for a grand complication such as a split-seconds chronograph or minute repeater.
Time to buy: a trilogy of options
You've done your research, you know your upper limit price-wise - unlike with engagement rings and mortgages, there is no formula for this beyond the obvious advice of not spending more than you can afford to lose - and you understand the ongoing servicing costs involved, so what next? The choices for buying are threefold:
1. Buying new
The traditional way to buy is to go to your local retailer, choose your watch, hand over your cash and leave with your new timepiece in a nice presentation box tied with a ribbon. Sadly, it's not always that easy.
As Silver points out, there is very little possibility of walking into any Rolex agency in the world and actually leaving that day with the watch of your choice. The pieces displayed are all 'exhibition only', and you need to get to know the retailer. This could mean buying a different watch from your grail piece in the first instance, or just making an appointment to drop in to say hello every couple of months. Karl Irwin, director of retailer David M Robinson, with showrooms in Liverpool, Manchester and London, advises you to support your chosen retailer on social media: 'Attend our events and visit us to let us assist you with repairs and after-sales needs.' The keepers of the all-important waiting lists don't make decisions based only on how much a client spends. Charm is also key - anything to show store staff that you are a genuine customer.
The watch world hates so-called 'flippers' who buy a sought-after piece and immediately sell it at a profit. Your retailer has to be sure that you are not going to flip what they sell you. And temperatures can run high; retailers have plenty of stories of enraged customers unable to buy a particular watch resorting to threats, shouting and even physically lashing out at staff. There's no quicker way to ensure that you'll be blacklisted.
According to Hannaway, you have to keep your options open. 'Don't fixate on 'one elusive "unicorn",' she advises. Instead, present your retailer with a top five, any one of which you'd be happy with. 'There are also so many fantastic watch brands and watches to discover, so you may fall in love with another piece that you can wear and enjoy, whilst you are waiting to find your ideal investment piece.'
As the director of Ninety, the only official retailer of pre-owned Richard Mille watches in Europe and the Middle East, Tilly Harrison is an expert on the laws of supply and demand. 'Be yourself and get to know the brand and the sales representative,' she says. 'Shop locally and stick to one retailer.'
2. Buying pre-owned
A report published last year by McKinsey and The Business of Fashion estimates that in 2019, the pre-owned watch market was worth $18 billion, and that by 2025 that figure may have risen to $32 billion. Once shunned by cognoscenti and often referred to as the 'grey market', the pre-owned sector is now an acceptable face of watch retail.
It's also an opportunity to make big savings as well as allowing you to source discontinued watches. Even better is the prospect of instant gratification - albeit at a price. A brand new Rolex GMT Master II 'Batman' for example costs £9,000 at retail but has a waiting list of approximately three years. Buying it now on the secondary market will cost around £17,000.
The watch world is small, and everyone knows each other, so when it comes to choosing a pre-owned dealer, Ninety's Harrison suggests that you 'talk to people who have bought before and ask for recommendations on where to go. Word of mouth is often the most powerful and trustworthy source in this industry - and will help you ensure you are purchasing from a reputable dealer.'
Asking auction houses and big watch retailers you already know, as well as collectors, what they think of a dealer is a sensible idea, echoes Duggan. 'They may not all want to give you advice,' he says, 'but on the whole, they are keen for their clients to be treated well.' You should always be offered a guarantee of a minimum of 12 months and the golden rule is, if you get a feeling that the dealer will not honour that guarantee, then trust your instinct and keep your money in your wallet.
'Buy the seller, buy the seller, buy the seller,' agrees Youé. 'Check their reputation and only buy when you're comfortable with the whole process. They should be treating you as well as any authorised dealer but will need to understand that they have to offer more in the way of reassurance. Understand what guarantees they offer in terms of authenticity and warranty, and ask what happens if you change your mind.'
If you do find your perfect watch through a dealer, there are a few things you can do to safeguard your purchase. The registration service watchregister.com, which works closely with police forces around the world, will allow you to search the serial number of a watch and compare it against a database of 70,000 lost, stolen and fake watches. If there is no match, the register will issue a certificate that shows you have done due diligence on the watch before buying. Each search costs £10 plus VAT.
Ask for the serial number and/or movement number to be recorded on the receipt so there is a paper link to the seller. And be sure to keep all sales and service receipts and anything else that gives the watch a pedigree. If there is no paperwork when you buy, then get the watch serviced by the brand it came from. This will, in effect, authenticate the watch - it won't be cheap (a service on a steel-cased Omega Speedmaster, for example, would cost about £630) but it will be money well spent.
In the past, there may have been an element of mistrust in buying from platforms such as eBay, but since introducing an authenticity guarantee service on watches of more than £2,000 last year, the marketplace giant has been selling a watch every eight seconds. General manager of luxury Tirath Kamdar says that this is down to an added layer of trust and peace of mind.
Lastly, never under any circumstances arrange to meet someone you don't know at a quiet or secluded location with a view to buying a watch. Thieves use this tactic to lure victims to a place where they can rob them of the cash they have brought for the purchase.
3. Buying vintage
Whereas 'pre-owned' usually refers to current or recently out-of-production models, the other option, and one that is becoming increasingly popular, is to go vintage with watches that are 25 years old or more.
Lovers of vintage watches will point out that these models have far more hand involvement versus contemporary line assembly watches, which adds to their rarity and makes them a good bet for investment. The crash of crypto currencies and the war in Ukraine have led to volatility in the pre-owned market recently. But the vintage market is largely immune to these fluctuations thanks to the rarity of the pieces. As Silver points out, 'People will think long and hard before selling their prized vintage Rolex, as the likelihood of finding it again in the future is small and [even if you do] the price would have gone up by the time you replace it.'
However, if considering auctions, remember your budget and don't forget about the buyer's premium, which will add anything up to 25 per cent to the final hammer price. The other big question here, as Ross at Christie's says, 'is about condition and originality. The vintage Rolex market in particular does have a caveat emptor warning attached to it. You have to trust who and where you buy from. You need a specialist retailer with experience as it takes years to amass this knowledge.' Of course, rarity, provenance and original documentation are gold dust when it comes to authenticating and re-selling your prized auction finds.
And finally... once you are happy with your timepiece
Once you have your new watch, you should wear it and enjoy it. The worst will probably never happen, but if your watch is ever lost or stolen, there are steps recommended by the Met's Flying Squad that you can take to ensure its safe return.
Before you take ownership of your watch, have it insured for both in and out of the home.
When not wearing your watch at home, keep it in a secure, locked place.
Never keep your watch together with its box and papers; this is just a gift to anyone who may steal it.
Take photographs of your watch and make a note of the serial number. Email these to yourself.
Report a watch theft to the police immediately to obtain a crime reference number. Notifying the police quickly helps them to highlight any known suspects in the area, and may mean they can identify the criminal involved and likely addresses where they might store or sell-on the stolen property.
In the case of theft, contact the watch brand, and if it has a database of stolen watches it can be registered in case it is brought in for repair or service some time in the future.
If your watch is ever stolen, notify thewatchregister.com. It will cost £15 plus VAT to register a stolen watch, and it will be added to the 70,000-plus strong database where it will remain listed until it is recovered. If any watch registered as stolen is taken to an authorised service centre, it will be seized and returned to its rightful owner.