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Pandemic and the Watch Market

It is a safe bet that some version of the thought "where is this all heading?" enters everyone's mind at least once or twice a day as we muddle through this pandemic.  Perhaps it is indulgent to ask this question of the luxury watch market.  But an important part of getting through this moment is holding onto the things you care about.  Based upon my Instagram feed the #watchfam's passion has no doubt persisted.  I know I've been keen to gather some evidence about the path forward when it comes to the watch industry.

So on Saturday, March 20, I tuned in online, late, to the Antiquorum auction in Geneva of 270+ lots in order to get some sense of where we stand.  I live streamed the auction on YouTube and you can find it here
A screenshot of the Antiquorum live stream
As in so many things right now there was both good news and bad news.  I will lead with the good news since often that is easy to overlook.  The preowned market is still functioning, particularly in the mid-to-low four figure (CHF) price segment.  In no small part this has to do with the auction industry fully embracing online bidding so that "social distancing" need not impinge upon auction "attendance."  Passionate collectors with non-astronomical budgets are still out there, or at least dealers believe that is the case and they're willing to place auction bids accordingly.

Many of the Tudor lots, for example, were pleasantly well received.  A Tudor Ranger II in steel (reference 9111) sold for CHF 3,200, 28% above the high estimate. 
A Tudor "Monte Carlo" Chronograph from a 2017 Philips auction catalogue.
Full disclosure: as an owner of the Ranger-inspired North Flag, I have every reason to emphasize this result.  Two Submariner Tudors, references 702/0 and 94010 sold for CHF 8,600 and CHF 9,000, respectively.  These were 32%  and 50% above their high end estimates.  A block of IWC military watches with accessible prices did similarly well.  But as the Tudor lots reached a crescendo in the five figure territory the bidding tailed off and results were less impressive.  This is a theme to which I will return.

Even in the upper four or five figure range, if a lot in good condition appeared, and the reference has a passionate following, the buyers were there.  An Omega Speedmaster reference 145.012 featuring the legendary 321 movement sold for CHF 10,000, double the high estimate. 
The first three Speedmasters with reference 321 movements to have flown in space.
AP Royal Oaks were selling but not many performed impressively.  One exception was the AP Royal Oak Jumbo reference 15002 in yellow gold which was produced in a run of 27 and sold in 1999.  The hammer dropped at CHF 70,000 for this lot, which was at the high end of the estimate range.  But the auctioneer noted that this price was a world record for this reference.  A very rare Patek manual wind two hander reference 3574 in steel with hands and indices engraved in a "clous de Paris" style went for CHF 10,000, beating the high end of the estimate by CHF 1,000.  The auctioneer was grateful and said "thank you," almost in relief, after the hammer dropped.  A Patek Perpetual Calendar reference 3960G in white gold beat its high end estimate by the same margin, selling for CHF 36,000.  And a Rolex Sea-Dweller Comex reference 16660 full set in outstanding condition went for CHF 76,000, 17% above the high estimate.

As encouraging as these results are, though, I would note that they were the exceptions.  Many, many lots went for the low end of their estimate or simply went unsold.  At one point the auctioneer blazed past numerous Pateks unsold and at another point numerous Rolex vintage models went nowhere and I basically had to pick my jaw up off the floor.  A lot containing four Patek Perpetual Calendar with moonphase reference 3970 (in platinum, yellow gold, pink gold and white gold) drew only one bid of CHF 350,000 and failed to make its reserve. 
Cover of a 2017 Philips auction catalogue featuring the OG Paul Newman Rolex Newmand Daytona.
The final lot, a Rolex Daytona reference 6241 "Paul Newman" from circa 1967 went for the low end of its estimate at CHF 165,000.  xThis is still an impressive price but nowhere near the CHF 253,000 average price we saw for this reference in 2018.  Times have definitely changed.  If it was flooded it didn't sell.  If it was the most impressive Metiers D' Art you'd ever seen: nope. 


The big money in the watch game seems to have weakened the most and the fastest.  My guess is we will see this persist for upcoming auctions.  Estimates and reserves will begin to fall.  Auctions are probably where we will see the fastest response of prices to the unprecedeted uncertainty we're living through.  And in many ways the auction market serves as the lead sled dog: the grey market and retail will soon follow.  There is no question that certain references and price points will offer calm in the storm.  But we are definitely in for some turbulence.

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