Watch your money!


Buying premium watches as an investment demands a deep knowledge of brands and models. Then, there are other factors at play, like the cost of restoration

  • Last year, Christie’s sold a 1949 Rolex Oyster Perpetual model with a cloisonné enamel dial (Facing page) for $1,242,040. in 2005, it had sold for $83,237.

  • "In the US, most people will want the watch completely refurbished like brand new. in Japan, Switzerland or Germany, owners are more focused on preserving the original watch" - Laurent Cantin, customer service director, Patek Philippe

A vintage timepiece can be a blend of historic artifact and status symbol. But, for buyers who choose wisely— something often hard to do—it also can be a sound financial investment.

The values of premium second-hand watches have been rising. Every major watch auction is accompanied by news reports of sellers achieving substantial profits. In May, Bonhams sold an Omega 1968 Seamaster 300 for £25,000, or about $38,500. The auction house had sold the same watch for £1,140 in 2007.

And, Christie’s last year sold a 1949 Rolex Oyster Perpetual model with a cloisonné enamel dial for $1,242,040; in 2005, it had sold for $83,237.

At auctions, “focus had been on contemporary watches, but tastes have changed and there is recognition that vintage watches are more collectable,” said Thomas Perazzi, head of Christie’s watch department in Geneva. “We have seen a huge increment in interest from mainland China and the Middle East.”

There also are indications that valuations will continue to rise. According to Knight Frank’s 2014 Luxury Investment Index, watches are expected to appreciate 68 per cent over 10 years. (The greatest growth, however, is projected for classic cars, at 487 per cent.)

But, for Perazzi, treating an old watch purely as an investment is anything but straightforward. “It is always extremely difficult to invest in watches,” he said. “Of course, we have many examples for watches that have increased in value enormously. It’s a delicate issue that requires expertise.”

Sticking to well-known brands is one strategy for buyers with an eye to resale value. Steven Kivel of Central Watch, a mechanical watch service and restoration company in New York, said, “For me, Patek Philippe and Rolex are the two watches that stand out in terms of investing, they’re like buying stocks in Apple or Microsoft.”

“The biggest mistake people make is focusing on obscure brands,” he added. “It’s not great odds unless you’re really in tune to exactly what the hot brands are.”

And, as interest in vintage timepieces grows, finding bargains has been getting harder, said Jack Forster, managing editor of online wristwatch magazine Hodinkee. “Twenty years ago you could find incredible watches at flea markets for a relative pittance. Today you just need to spend half an hour researching auction prices and seeing what a model goes for on eBay to know whether you’re paying over the odds,” he said.

“The likes of vintage Rolexes, Cartiers and Patek Philippes have become almost impossible to buy, except for the wealthy,” he added. “Now if you want a blue-chip brand and you want vintage, you are going to pay for it.”

A 1,500 per cent return on investment, like what Christie’s achieved with the 1949 Rolex, is certainly not the norm and usually applies to rare historic models from a handful brands, Forster said. “But, if you’re willing to look off the beaten track, and you really don’t have to look that far, you can find really wonderful watches that aren’t terribly expensive,” he said.

“My advice is to find a watch brand that you are really interested in, and collect because you’re emotionally invested,” he said, citing Omega dress watches from the 1950s and 1960s, as well as lesser-known brands like Universal Genève.

Perazzi of Christie’s said the auction house was “seeing a lot more interest in brands like Omega and Longines. The first Omegas are extremely sought after and are extremely expensive compared to five or 10 years ago, the production in the late 1950s was just a few thousand models.”

After deciding on a desired model, a potential investor then has to find a watch in the right condition and at the right price. Experts say the cost of servicing should be considered, too, as regular maintenance can double the expense of a watch.


And, if restoration is needed, getting it right can make the difference between a watch that resells for $10,000 and one that commands $1,00,000, Perazzi said.

He added that the market had changed drastically since the early 2000s, when collectors started to pay more attention to the quality of the original watch. “If we can find pieces from the 1940s, 1950s, 1960s or 1970s that are untouched—what we call ‘new old stock watches’— worldwide collectors are willing to pay a big premium, whatever the brand,” he said.

He advises that restoration work should be kept to a minimum. “Don’t polish a piece, don’t restore, clean or replace dials, even if it is scratched. It’s better to keep it in its original, if imperfect, condition,” he said. But, he added, “sophisticated movements do need to be oiled, so it’s strongly recommended to only service the movement.”

Opinions about the correct way to restore an older timepiece are partly cultural, said Laurent Cantin, customer service director at Patek Philippe.

The company’s specialist department in Geneva restores watches dating from 1852 to 1970. “In the United States, most people will want the watch completely refurbished like brand new,” he said, “whereas in Japan, Switzerland or Germany, owners are more focused on preserving the original watch.”

“Our goal is to restore the watch to its original condition, so we try to keep the original parts, even if there’s rust or damage,” he added.

Cantin’s opinion on restorations echoes Perazzi’s: “When it comes to restorations, from my point of view it is better keep the watch in the original condition as much as possible.”

And, while Patek Philippe is generally considered one of the blue-chip brands for watch investments, Cantin says he believes that profit rarely motivates collectors. “I would say the number of people who buy primarily as investors are the minority,” he said. “I would think that for most of the collectors it is more in terms of emotion and something they can pass on.”

For Kivel, at Central Watch, it comes down to whether a buyer wants to wear a watch, or keep it in a safe. “If you’re investing, don’t polish,” he said, “but if you want to enjoy it, I would suggest polishing it and it will come out like brand new. The best reason would be that you want to own a beautiful watch, and one that will last a lifetime and beyond.”

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Topics : #business | #luxury

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