When Berlin-based Watchmaster collapsed following a heist in which watches valued at €10 million were stolen last year, the company’s UK operation attempted to continue trading and, right up until this week, had around 1,400 watches on sale on its website that had been consigned to the company by mostly British clients.
Despite the obvious uncertainty hanging over Watchmaster UK since the collapse of its German parent company last November, clients in the UK have been unable to get their watches returned because of a clause in their consignment contracts that said that they effectively have to first pay the profit margin that would have accrued had their watches sold at a minimum agreed price.
Realistically, all these consignment clients could do was cross their fingers and hope their watches sold through the still-active Watchmaster website.
At the same time, Watchmaster wanted to keep trading in the belief that this gave the company the best chance of finding a buyer for the UK operation.
But, because Watchmaster had little or no money for marketing, coupled with a cooling market for pre-owned watches, there was little prospect of these sales.
As a result, the fight for survival for Watchmaster in the UK has ended and the business looks certain to be made officially insolvent next week.
“The problems for Watchmaster began in November 2022 with a robbery that occurred at the parent company Watchmaster gmbh in Berlin, sending it spiralling into financial difficulties. I think we all knew that there was an element of the writing being on the wall. We fought as hard as we could but, in the end, we couldn’t make it work,” Thomas Rickard, managing director UK for Watchmaster tells WatchPro today.
“Initially, we were confident the UK company would be able to weather the storm with the right buyer and we immediately took steps to protect the operation, getting legal advice and ultimately making sure that any watches we were holding on trust for third-parties would be unaffected in the event of the UK needing to close,” Mr Rickard continues.
“Throughout this whole process we have been trying to find the buyer; that is the reason that we’ve been continuing to trade because ultimately that is what makes us most attractive and would be the best case for customers and staff alike. Thursday last week, we realised that we weren’t going to be able to achieve that, and at that point, we moved very swiftly to ensure that all consignment watches were protected, would go somewhere where they would be taken care of appropriately, stored securely, and with the ability to organise orderly returns. This was the primary focus,” he describes.
If Watchmaster UK went into administration, the watches on consignment would likely be tied up in legal purgatory for months.
This happened when the German business collapsed, with consignees, whose watches were among those stolen in the Berlin heist, still waiting for news on compensation of when their goods will be returned six months after the robbery.
Enter BQ Watches, one of the UK’s largest pre-owned market watch specialists, which has secured an eleventh hour deal to acquire some of the assets of Watchmaster and the consignment contracts for each client, effectively giving the company control over the 1,400 watches along with some equipment.
The deal was finalised yesterday, while Watchmaster was still a going concern. The company is now not expected to go into administration, but straight into insolvency.
“The situation in the UK is that we are not going into administration. The company is currently solvent, but we are putting plans in place to put it into insolvency,” Mr Rickard confirmed today.
BQ Watches took ownership of the 1,400 watches on consignment yesterday (Thursday).
Spencer Dryer, owner of BQ Watches, tells WatchPro that: “BQ Watches aims to sort out the mess and rescued the watches for their owners”.
Mr Dryer says every client will be contacted by both Watchmaster and BQ Watches with a notification about the arrangement and an offer will be made by BQ Watches to return the watches, without charge.
“Or they can enter a new consignment agreement on a better basis than the contract they had previously with Watchmaster,” he promises.
BQ Watches, which has been in the pre-owned business for over 30 years, is one of the most active traders in luxury watches in the UK and is opening an 8,000 square foot lounge in Hertfordshire where customers can come to buy and sell watches or just talk about their hobby with experts and other collectors. The venue will also be used for regular collectors’ events.
“We want these clients of Watchmaster to know that we are here to help,” Mr Dryer says.
“We sat on the side lines watching this play out within our watch community and realised we had the ability to step in and help. We do not own the watches we have taken over from Watchmaster, they belong with their rightful owners and we will return them at our own cost. Alternatively, we would be happy to help sell them throughout extensive operation online as one of the largest pre owned luxury watch specialist in the UK.”
Chronext made a similar offer to Watchmaster consignees in Germany last year.
The deal looks like a potential win-win. The previous customers of Watchmaster UK now have certainty over the sale of their watches by BQ Watches on a new consignment contract, or for clients who would prefer to have their watches returned to them, BQ Watches will deliver that faster than would have been the case if administrators were handling the process, and for free.
Mr Rickard believes the BQ Watches rescue is the best available outcome for the owners of consigned watches, and is grateful to BQ Watches.
“As soon as we realised that there was no possibility of rescuing Watchmaster, we decided to work with Spencer at BQ Watches. He has taken on a very, very big undertaking and we are grateful to him for stepping in to support us in this way. I’m absolutely confident that it will work out well because BQ is very experienced. And I’m sure our customers will feel confident when they understand what BQ is offering – to continue to sell their watches or return them,” he concludes.
Nice to know a company exists that actually wants to help people and not just rip them off, Id love to know the difference in commission as I can’t find it on the watch master web site so i guess it was much much higher
13%
I hope my kermit is safe.