The challenges facing all pre-owned watch specialists after prices spiralled upwards in 2021 before plunging into the summer of 2022 are brought into sharp relief by accounts published by Watchfinder & Co. this week.
The UK-based business, owned by Richemont since 2017, is a pioneer that dragged the trading of secondhand watches out of the murky shadows and into the mainstream, arguably blazing a trail that led, eventually, to Rolex launching its Certified Pre-Owned programme last year.
There could be no stronger evidence of the gentrification of pre-owned than Richemont’s buy in followed by Rolex wrapping its arms around the sector.
Along the way, investment flooded in, with stars including footballer Ronaldo backing Chrono24 and Grammy Award winner John Mayer and quarterback Tom Brady joining a 2020 funding round that helped Hodinkee buy Crown & Caliber in the United States.
But the bubble that blew up before deflating in 2022 was driven by flippers trading watches between themselves at ever-rising prices.
This was how the market looked at the start of the 2023 financial year just reported by Watchfinder, and provides important context for the results.
Turnover dropped 19.3% for the financial year from April 2022 to March 2023, a period when prices for pre-owned watches fell relentlessly and lost almost half their value.
This was a tough time to hold stock, which is the Watchfinder model. The value of Watchfinder’s stock fell by 23.6% in its 2023 financial year.
It is important to note that the 2023 accounts are almost a year old, and Watchfinder has been actively broadening its operation with efforts to grow outside its core UK market into the United States and Continental Europe.
In a statement shared with WatchPro today, the company concedes that 2023 was a challenging financial year to navigate with external factors putting significant downward pressure on prices, but conditions and performance has improved.
“Since the start of the new financial year we’ve seen prices begin to stabilise and a resurgence in consumer interest with the volume of customers we served rebounding,” the company says.
“The launch of our UK marketplace has helped with this acceleration, with the additional 2,500 authenticated watches now available to customers, boosting both our volume of sales and supporting our inventory management goals. More broadly, the resurgence in consumer interest has been observed both online and in person via our network of boutiques, with Watchfinder Bicester Village a valuable addition since we opened in November 2022,” the statement continues.
“Looking beyond the UK we’re also seeing positive momentum with continued investments in our local partnerships, including Nordstrom and Printemps, generating incremental momentum,” Watchfinder concludes.