Watches, once admired solely for their craftsmanship and style, are now capturing the attention of investors seeking unconventional avenues of financial growth. This trend emerges against the backdrop of a vibrant market that has maintained its fervor for three consecutive years.
The revered Rolex, renowned for its precision and artistry, now finds itself in the curious position of being unable to keep pace with the fervent demand. With the intricate creation of a single timepiece stretching over a year and waitlists varying from several months to years, enthusiasts are increasingly turning to the flourishing secondhand market.
Delving into the realm of luxury watches unveils a captivating market valued at a staggering $75 billion, with the secondary market contributing a significant 30% to this sum, as per insights from Boston Consulting Group. This sector’s allure continues to thrive, propelled by the growing resonance of demand, particularly among the younger generation.
The surge in popularity of the secondhand luxury watch market can be traced back to the robust demand emanating from the retail sector. Rolex aficionados encounter waitlists spanning anywhere from six to 36 months when pursuing their prized timepiece through official channels. In response, secondhand shops have evolved into a haven for instant gratification, keeping stock readily available for walk-in customers.
Founder of Prestige Watches, Yuri Iskhakov, sheds light on this swift transactional landscape, sharing how customers can step into his New York City-based establishment and secure a watch within a mere 30 minutes. A Texan tourist’s anecdote further exemplifies this expeditious experience, as he was able to procure a 26 mm Rolex Datejust watch from Prestige Watches, bypassing the extended waitlists and sold-out scenarios often encountered in traditional retail settings.
Yet, the secondhand market does come with a price premium. Watches in the gray market may bear price tags a few hundred dollars heftier than their brand-new counterparts at Rolex, or even ascend to several thousands of dollars for the rarest of finds.
The allure of Prestige Watches extends beyond the immediate purchase, assuaging customers with a full money-back program and a Rolex card equipped with scanning capabilities for direct authentication. This blend of reassurance and convenience becomes all the more attractive in the face of the ever-present tension between supply and demand.
As the report from the Boston Consulting Group suggests, 29% of collectors acknowledge paying above the retail price for their recent pre-owned acquisitions. Furthermore, a notable 40% of these discerning buyers cite the avoidance of lengthy retail queues as a compelling rationale for venturing into the secondhand market.
Yet, the allure of luxury watches extends beyond the realm of aesthetics. These elegant timepieces have morphed into an intriguing alternative investment option, with certain brands surpassing the performance of conventional investment avenues.
The allure of luxury watches as investment vehicles becomes palpable as one examines the performance metrics. From August 2018 to January 2023, the secondhand market prices for luxury watch giants like Rolex, Patek Philippe, and Audemars Piguet registered an impressive 20% annual growth. Remarkably, this trajectory was maintained even during the turbulence of the COVID-19 pandemic, overshadowing the 8% annual growth rate of the S&P 500 index.
Investors also harbor the conviction that luxury watches possess resilience during economic downturns. Drawing from the Great Recession’s lessons, luxury watches displayed their capacity to outperform the S&P 500, rebounding within a two-year timeframe following the 2008 market crash.
Yasha Tehrani, the proprietor of Rex Watches, encapsulates the investment sentiment succinctly, revealing how individuals spanning different age groups, from seasoned individuals to younger enthusiasts, are exploring watches as a long-term financial strategy. Encouragingly, the focus often centers on steel Rolexes, deemed by Tehrani as having substantial potential for appreciation.
The watch market is witnessing its own evolution, as buyers embrace authenticity, transparency, and accountability. The tides have shifted, with authentication services and the wealth of information in the digital era ensuring that discounts and promotions no longer raise skepticism but instead usher in credibility.
This transformation extends to the younger cohort, who are eager to uncover unique deals and rare gems. A resounding 95% of watches are no longer in production, propelling their value and appreciation potential. As this generation joins the ranks of watch enthusiasts, sellers are venturing onto social media platforms, leveraging platforms like TikTok to forge connections and engage in lively exchanges with customers.
Even the venerable Rolex has embraced the secondhand wave, inaugurating their own certified pre-owned program in 2022, a testament to the shifting dynamics of the luxury watch landscape. As investors and enthusiasts alike navigate this evolving arena, the intersection of style, craftsmanship, and financial prospects casts a tantalizing aura over the world of luxury watches.
