Category Archives: News

Putin’s Watch? Or Fake News?

A story recently caught the luxury watch world by surprise when it was reported that Vladimir Putin’s personal Patek Philippe 5208P was going to be sold at auction.

The 5208P is a very rare and expensive watch, and rare and expensive watches often attract attention when they come up for sale.

putin patek 5208pHaving the name of a famous (or infamous, depending on your point of view) person attached to it can drive up the price considerably.  That’s why it was noteworthy when the auction house declared that the listed owner of the watch was Putin, a man known for wearing fine (and very expensive) timepieces on his wrist.

This week, the office of the Russian President says that the watch is not Putin’s watch, but they declined to elaborate.

The auction house, on the other hand, insists that it’s Putin’s name on the ownership documents.

Granted, anyone can fill out any name they want when they buy a watch, but it’s pretty unusual for a watch that sells for $1 million new to have the name of someone other than the buyer put on the paperwork at the time of purchase.

High end watch companies insist upon having the paperwork filled out at the point of sale.  This defines the watch as having an owner, and once that is done, the watch is considered owned (or pre-owned, if it comes to market shortly thereafter.)  The point is that the name on the paperwork means the watch is no longer new.

It’s true that someone could have purchased the watch as an intended gift for the Russian leader, though even that would be a bit unusual.

The 5208P is not a run-of-the-mill watch, even for Patek.  It’s a chronograph with a minute repeater and a perpetual calender that shows the day of the week, the date, and which even has the ability to take leap years into account when showing the date.

The watch is also not for sale to just anyone who asks.  It’s a limited edition model that is only offered to regular customers of Patek Philippe…who also happen to have an extra $1 million or so lying around to pay for it.

The provenance may be a bit shaky, at least in terms of who is the registered owner of the watch.  It might be Vladimir Putin, or it might be “Vladimir Putin.”  Still, it’s a rare watch and having the name of the Russian leader attached to it is likely to drive up the price, simply because the stories making the rounds, true or not, are bringing the auction to the attention of more potential bidders and would-be buyers.

The more people who know about it, the more people are likely to bid.  The more bidders there are, the higher the price is likely to go.

Current estimates for the sale are something in the vicinity of $1.6 million.  The item will be sold on July 19, by Monaco Legend Auctions.  It’s worth noting that their Website simply lists the item as “Patek Philippe Triple Complication – Vladimir Putin.”  At the moment, there’s no other description.

 

In Watches, Provenance is Everything

There are many factors that can determine the price that something will sell for at auction, but few things can affect the price quite so much as previous ownership by someone famous.

Things can be collectible on their own, but if they’ve been owned by a famous person, the price can go through the roof.  A good example is the recent announcement that Paul Newman’s personal Rolex Daytona is going to be sold.

jackie kennedy's watchThis watch sells for a lot of money, as it was a rare model even when new and has become closely associated with the famous actor.  The model is even known as a Rolex Daytona Paul Newman among collectors, even though it wasn’t sold by that name.  The watch is expected to sell for 3-5 times the amount that a common example that was not owned by an Oscar-winning actor might bring at auction.

That’s not the case with the Cartier Tank Ordinaire that will be sold this week.  This watch, while a bit unusual, has most of its value in the fact that it was once owned by the then-First Lady of the United States, Jacqueline Kennedy.

The watch was a gift to Jackie Kennedy by her brother in law, Prince “Stas” Radziwill, who was married to Jackie’s sister.  The back of the watch is inscribed, “Stas to Jackie,” and includes the date of a 50 mile hike that Radziwill took as a challenge from Jackie.  He gave the watch to her as a thank you present.

While Cartier watches have their fans, they’re mostly viewed as jewelry and aren’t sought out by watch collectors, who tend to favor larger models with more elaborate features.  It’s also worth noting that women’s watches tend to sell for a lot less on the market than men’s models do.

As such, the going rate for even a vintage Cartier Tank is about $3000 or so.  This particular model, the Ordinaire, was one of only three made that year in 18 karat yellow gold.  Despite its relative rarity, the timepiece likely wouldn’t attract much attention were it not for its provenance.

Because Jackie Kennedy (later Jackie Onassis) was such a beloved and much-watched public figure during her life, the watch has an estimated price of $60,000-$120,000, though it could go much higher than that.  It only takes two people to drive prices into the stratosphere, and watch collectors and Kennedy aficionados tend to be both stubborn and wealthy.

An undisclosed portion of the proceeds from the auction will be given to the national endowment for the arts.

Simplicity is Back

For years, watch manufacturers have been trying to out do themselves when it comes to technical innovation.  It’s not enough to have a watch that tells the time; you also have to provide multiple time zones, the tidal schedules, the phases of the moon, the barometric pressure, and whatever else a company’s engineers can dream up to stick inside a watch case.

simple watchThen you end up with something like the Patek Philippe Grand Complication, which is lovely, but so hard to make that there’s only one, and it wouldn’t matter, anyway, because if there were more than one, you still couldn’t afford it.

Watch fans love these kinds of timepieces, though they don’t necessarily want to wear them or carry them around.  They want to own them, and talk about them, and they’re great for a company’s public relations department.

At the end of the day, however, watch companies are in the business of selling watches, and ideally, selling a lot of them.  Elaborate timepieces with other-worldly complications are great for publicity, but you couldn’t sell a thousand of them if you wanted to.

People want watches they can wear every day.  They want watches that are practical for use at work, or at the store, or on a night out on the town.

They don’t want watches that have to spend time in the shop every six months for elaborate (and expensive!) maintenance.

That’s why few people were truly surprised at this year’s Baselworld convention in Switzerland to see that the sort of watch that a lot of major manufacturers were showing off had a feature that has seemingly disappeared in recent years.

Three hands only.

The industry seems to have scaled back a bit in the last year or two, partly due to a slump in the sales of high end watches and partly due to a perceived glut in the market.  In times of turmoil, it’s best to go back to what you know best, and that’s your basic, time-only watch with hands for the hour, the minute and the second.

Such watches will never go out of style; they evoke the basic necessity of a timepiece – they tell the time.  They don’t tell other stories, or draw attention to themselves for additional faces, hands, buttons, lights, wheels, tourbillons or any other gadget.

They just tell the time.

That said, they’re not necessarily simple watches.  Movements are constantly being refined and there’s a new trend in recent years to make watches as thin as possible.  People are looking for simple looks with oversized faces and thin cases.

Companies are complying and the result at Baselworld was a showing of tasteful and attractive, yet simple-looking timepieces that will look good today and will likely look terrific and continue to run well thirty or forty years from now.

Such watches may resemble the sorts of timepieces your grandfather bought back in the day, but rest assured they’re more accurate, built quite a bit better, and are far less likely to give you trouble of any kind than those timepieces of a generation or two ago.

Simple is back.

Asus Getting Out of Smartwatch Market?

The smartwatch market continues to baffle pretty much everyone, and that includes both buyers and manufacturers.  Once thought to be a sure thing that simply couldn’t miss, the smartwatch has not become the must-have device that everyone thought it would be.

asus zenwatchThree or four years ago, manufacturers of traditional timepieces were worried that smartwatches were going to jeopardize the market for traditional mechanical watches, as it was thought that everyone who was already carrying a smartphone would flock to buy a watch that could interact with it.

This led a number of computer manufacturers to jump into the smartwatch business, including Asus and Apple, whose Apple Watch was expected to take the market by storm.  Apple was so confident of the success of their product line that they introduced a model whose price topped out at some $17,000.

At that price, manufacturers of traditional watches, such as Rolex, were starting to panic, concerned their potential buyers might go buy the Apple Watch instead.

That hasn’t happened, and while a few traditional manufacturers, such as Tag Heuer and Fossil, have introduced smartwatches, a number of other makers have either scaled back their offerings (Apple’s five-figure watch is long gone) or bailed out completely.

Asus ZenWatch line was hardly the company’s bread and butter, and their plans to scrap the smartwatch line will likely not significantly impact the company’s bottom line.  A lot of buyers are staying away from smartwatches as they’re not all that functional without a smartphone nearby and some of them are downright unattractive.

Since you can buy a watch for the same price that looks good, offers a lot of features and will likely last for decades, it doesn’t make sense to spend the same amount of money on a smartwatch that may be stuffed in a drawer in a year or two.

asus zenwatchMany of us are old enough to remember the “new” quartz watches with digital displays that became ubiquitous in the 1970s, only to find them not working at all some six months after purchase.  They were expensive and most of them had relatively short lifespans.  We suspect that a lot of buyers remember that and they’re staying skeptical.

One of the downsides of Asus’ exit from the market is that the ZenWatch line was one of the more affordably priced lines of smartwatches on the market.  That they were only able to sell a few thousand of them each month is a testament to the relative shakiness of the market.

Rare Rolex Sells for $5 Million

rolex bao dai 5 million Five million dollars is a lot of money to spend for anything. For most people, they’d expect to get real estate for that kind of money, and probably a lot of real estate, at that.

In this case, we’re talking about $5 million spent for a single wristwatch, the so-called “Bao Dai” Rolex.  This watch bears the name of its first owner, Bao Dai, who was the last emperor of the Nguyen dynasty in Vietnam.  He purchased the watch in Paris in 1954.

Officially, the Bao Dai Rolex is a Rolex Reference 6062.  The timepiece features a gold case with a black face, and is one of only three such models sold.  Making this one unique is that it’s the only one of the three that had diamond markers on the even numbers around the face.  The watch is a certified chronometer with a sweep second hand, a moon phase indicator, and a display that shows both the day of the week and the month of the year.

The $5 million is the most money ever paid at auction for a Rolex, and this isn’t the first time that this particular watch has held the title.  It previously sold in 2002 for a then-record $369,000.

While watch collectors seek out pieces that are unusually rare or which have unusual features, they’re also attracted to models that have unusual provenance.  Watches with famous previous owners usually fit into that category, and this one is no exception.

This sale continues the trend of unusually high priced watches selling well in a market that is slowly growing a bit stagnant.  That’s not to say that the market is sluggish, but it’s sluggish in the mid-to-somewhat-high-priced range.  It’s not stagnant in the upper end of the spectrum, as the people who would buy such pieces have finances that are likely to remain stable over time.

Watches like this one also rarely come to market, so the opportunity to buy them is equally rare.  In those case, buyers always seem to find the money to pay for them.

While a number of bidders were at the auction to bid in person, the ultimate bid was placed over the phone by a buyer whose name remains a mystery.

Though the $5 million price is a record for a Rolex, it is not a record for the most expensive watch ever sold at auction.  That belongs to a Patek Philippe Reference 1518 that sold for more than $11 million in 2016.

That’s a lot of money for anything, even for a one of a kind Rolex.

Why Smartwatches Haven’t Taken Over

A few years ago, the smartwatch made its debut, and people who follow such things were concerned that it might destroy the Swiss watch market, which has been thriving for at least a century.

Those concerns weren’t entirely unwarranted, as a similar watch crisis had occurred just a few decades ago when quartz movements first came to market.  In the end, the traditional model learned to survive along side electronic watches, and a few high end makers manufacture both mechanical and electronic watches today.

smartwatchThe smartwatch was thought to present a different kind of problem, in that many people thought they’d replace traditional watches altogether.  A lot of people don’t even wear watches anymore, as they get the time from their phone.  Smartwatches work with a smart phone to provide some functionality that you’d never get from a mechanical timepiece.

Adding to the problem is that a few companies, such as Apple, even introduced high end smartwatches that were intended to attract the interest of the well heeled watch buyer.

As with the quartz crisis of the 1970s, a few traditional makers have jumped on the bandwagon to make smartwatches alongside their mechanical models, but…

…three or four years later, the noise has mostly died down, and no one seems to be particularly concerned about the smartwatch destroying the market for mechanical wristwatches.

The Swiss watch industry is not without its problems, and there has been somewhat of a downturn in business.

But those issues have more to do with a lack of well-funded buyers for high end models than it does with a lack of interest in the product itself.

The smartwatch problem has largely gone away, however, because the industry has discovered something that should have been obvious from day one – people who buy high end mechanical watches and people who buy smartwatches are two entirely different groups of people.

High end watch people are fans of watches.  They like the mechanics.  They like the attention to detail.  They like the attention to quality.  But the people who buy smartwatches are a different type of consumer.  They like what a smartwatch does, and that’s about it.

That the two groups don’t overlap at all was made perfectly clear when Apple made the decision to discontinue their high end 18-karat gold Apple Watch, which was priced between $10,000 and $17,000.

Sales of that particular model were so poor that the company removed it from their product line and their Website, and they’d prefer that the public at large forget that it ever existed.

People who want smartwatches weren’t going to pay five figures for one, and people who want to pay five figures for a watch want one with moving parts.

traditional watchA few hybrid models are trying to bridge the gap between the two worlds, but they’re staying fairly close to the smartwatch price range, which tends to run between $100-$500 or so.

People buy high end watches because they’re built well, they’re built to last, and they’re the sort of things that you can wear for a lifetime and hand down to future generations as an heirloom.

While first generation Apple watches may reach collectible status, as early iPhones have, they’re not likely to attract the sort of buyers who would rather buy a Audemars Piguet or a Patek Philippe, and the people who make those high end watches are no longer concerned (if they ever were) about losing market share to the likes of Samsung or Apple.

Is the Watch Market Due for a Correction?

The rare watch market, particularly as it concerns mechanical wristwatches, is an odd duck as collectibles go.  Most people don’t even wear wristwatches anymore, as they have their smartphones to tell them the time.

Despite this, and the decades-old trend towards quartz movements in the timepiece industry, the market for rare and unusual timepieces seems to be insatiable.

Just a few years ago, during the Great Recession, watch manufacturers were concerned about going out of business due to the lack of demand worldwide.  In less than a decade, this has changed dramatically, and makers such as Rolex, Patek Philippe, Breitling and others are suddenly churning out tremendous numbers of watches.

Many of these are limited editions, with unusual features – moonphases, a tourbillon, lots of gold, lots of diamonds, and often with production numbers that are well under a hundred pieces.

Some of these also have prices that are well north of $50,000.  A few even have prices that go into seven figures, as seen below:

One would think that the market for such things would be saturated by now.  Everyone has but two wrists.  You can only store so many watches in your case.  The limit for the number of $10,000+ timepieces that someone might want to own would seem to be finite.

Yet production continues, and people are snapping up the limited edition items as fast as they can come off of the assembly line.  Much of this is due to the explosive growth of the economy in China, and people there are quick to want to show off their success.  One way to do that is to show people that you have “Western” symbols of success, and expensive automobiles and luxury watches are a great way to do that.

Rolex Cellini

Because of this, a surprising number of these expensive watches have found their way to Asia, and that does leave some people in the industry concerned.  If all of those watches are over there, what happens if there’s an economic collapse?

Another issue is that there is a seeming glut of vintage pieces for sale right now.  You might flinch at the price that you’ll have to pay for a brand-new Rolex, for instance, but you can buy one from the 1970s or 1980s that’s in great shape and which still has the Rolex pedigree for a lot less money than you’d pay for a new one.

Savvy collectors know this, but the newly wealthy in Asia don’t care…today.  That may change if the market gets a little shaky.

There are a few other factors that suggest that a market correction may soon be in order:

  • Anti-corruption laws in China now make it difficult to bribe public officials, and high-end watches used to be the currency of choice for that.
  • As sales have increased, so have prices, and a lot of would-be buyers are starting to balk at prices that have doubled or tripled in recent years.

It’s hard to say if the market is going to collapse, or fade, or just quietly slow down.  But as anyone in manufacturing can tell you, double-digit sales booms don’t last forever.

Sooner or later, and possibly sooner, there’s going to be a downturn in the high end watch market.  The biggest driver of this, of course, will be the overall economy, and if there’s a global slowdown in the stock markets, then the luxury goods markets will soon follow.

Now might be a good time to start investing in vintage timepieces, rather than limited edition new ones.