We are living through arguably the most disruptive period in the luxury watch industry since the quartz crisis and, rather like the era when Japanese watchmakers transformed the landscape, it is forces beyond the venerable Swiss maisons that are driving the change.
In this instance, it is the digital-native pre-owned traders and platforms setting the agenda.
Today, it feels as if professional operations like Watchfinder have been part of the fabric of the global watch industry for decades, but the business is only 20 years old, and was acquired by Richemont just five years’ ago in 2018.
That was the starting gun for a rush of investment into pre-owned watch trading that created the competitive landscape we see today.
Compare what has happened in the primary market for luxury watches to that of the secondary market in the five years since Richemont bought Watchfinder.
In the primary space, the biggest and strongest historic Swiss marques have consolidated their market-leading positions.
Rolex has doubled its turnover from around CHF 5 billion to just shy of CHF 10 billion, if Morgan Stanley’s estimates are to be believed.
Other leading brands such as Omega, Cartier, Patek Philippe, Audemars Piguet and Richard Mille have jostled to break into or remain in the top five, but few have done so through breakthrough product launches.
They rise and fall on the back of strategic business decisions, predominately how well they manage partnerships with retailers, and how much they position themselves as direct to consumer operations.
Collectively, these brands make roughly the same number of watches as five years ago. The only major difference is that they charge more for each watch, and they try to retain as much profit as possible for every transaction.
The secondary market is different. It is still in a period of hyper-disruption driven not by a cosy consensus, but by fierce competition, new entrants with fresh ideas, the sort of glaring transparency loathed by the Swiss and Darwinian survival of the fittest.
As a result, a chaotic and mistrusted sector with few obvious leaders beyond Watchfinder have evolved over just five years into a force that competes to sets new standards for the quality, authenticity and provenance of watches that routinely change hands for six or even seven figures online.
That bears repeating: pre-Richmont’s acquisition of Watchfinder, it would have been unheard of for swathes of the public to have enough trust to buy a Timex online, let alone a Patek Philippe or Richard Mille.
‘Trust’ is the operative word, and Richemont is continuing to build that trust with initiatives including the trading of pre-owned watches through the boutiques of Vacheron Constantin, Panerai, IWC and Jaeger-LeCoultre.
It has set and continues to improve standards of second-hand watches sold online by Watchfinder, which for many years has issued two year guarantees for timepieces that have been through its service and refurbishment processes.
This trust and professionalisation is responsible for millions more consumers taking an interest in luxury watches.
In the beginning, they found that they could acquire their first top end timepieces more cheaply than they imagined by buying second hand, just as they might buy a used Mercedes for the same price as a new Ford.
Secondly, they discovered that luxury watches hold their value and even, in recent years, increase in price on the accessible secondary market. Ultimately this led to hot watches from the likes of Rolex, Audemars Piguet, Patek Philippe and Richard Mille selling at prices way above their retail value at authorised dealers.
Flippers piled in, driving prices ever-higher, and making these waiting list watches a commodity as liquid and instantly tradeable as gold or bitcoin. Unlike the pre-Watchfinder period, it was simple to see prices online, and they seemed to be heading only in one direction.
As with any gold rush, a shadow economy has emerged with criminal gangs desperate to steal these high-ticket items and turn them into instant cash.
A new study by Watchfinder has found that, after watch crime fell to a historic low during the pandemic, data from UK police forces reveals that watch crime hit a peak in 2022, with a total of 15,058 watches reported as being stolen, the highest number of cases in two-years, with the average value of the watch reported to be stolen at £1,345.
Watchfinder’s study, overseen by Research Without Barriers, is based on freedom of information requests with police forces and a survey of 2,000 adults in March.
It found that over the past 12 months, more than 6,000 watches were reported stolen in London alone – accounting for 55% of watch crime nationwide – with £162 million worth of watches being stolen across the capital over the last five years.
There have been a number of high-profile crimes with celebrities robbed and major retailers raided, which has affected public attitudes. Watchfinder’s study reveals that two thirds (65%) of those surveyed agree the increase in thefts has made them more vigilant when wearing their watch and a third (36%) want to do more to protect their watch against theft.
These insights have led Watchfinder, and its parent organisation Richemont to launch a new initiative designed to make it harder for criminals to profit from the theft and resale of luxury watches.
The initiative, named Enquirus, is designed to make it far easier to trace stolen watches back to their legitimate owners and is underpinned by two simple steps.
First, it encourages watch owners to register new timepieces as soon as they are purchased so that there is a database of who owns what.
Secondly, it encourages pre-owned retailers to authenticate all stock as standard so that they are never — often unknowingly — buying or selling stolen goods.
Both steps make it harder for criminals to offload their ill-gotten gains, which reduces the incentive to steal watches in the first place.
As a pre-owned specialist, Watchfinder has had years of implementing standard procedures that check and authenticate all stock that comes through its doors, and hopes to spearhead change in the pre-owned sector by encouraging all pre-owned retailers to follow suit.
Richemont has made the initiative entirely independent of brands, authorised dealers of new watches and secondary market players. The aim is to drive participation as high as possible, because the more legitimate businesses join the programme, the harder it becomes for individuals or gangs to profit from their often-violent crimes.
It also makes it easier for authorities to reunite stolen watch with their owners if they are registered on the Enquirus database. Richemont wants the programme to be as widely adopted as possible, and is in a unique position to create a global deterrent via a worldwide database.
Enquirus has been designed in close collaboration with a wide range of international partners including watch manufacturers, law enforcement agencies, insurance companies, the pre-owned market and consumers.
The bigger it becomes, the more effective it will be for companies and individuals wanting to register, declare and search for lost and stolen watches.
“We are hoping to break the cycle between theft and re-sale by encouraging all customers to register their timepieces, as well as inspire all other pre-owned retailers to implement thorough checking processes for their stock,” says Watchfinder CEO Arjen van de Vall.
“With these steps in place, we can help ensure the pre-owned sector is a safe and trustworthy place to shop. At Watchfinder, we believe in the value of purchasing pre-owned, and pride ourselves on the procedures we’ve developed to provide customers with authentic timepieces they can treasure. With crime on the rise, it is more important now than ever to purchase from trusted retailers. If considering a pre-owned purchase, do your research and check the retailer has thorough processes in place to trace and authenticate stock to give you peace of mind,” he urges.
The fluidity of the secondary market created the conditions for watches to change hands quickly and profitably for criminals, but Watchfinder believes it can reverse that cycle with mass participation in Enquirus.
The company has already stopped the re-sale of over 200 stolen watches that came through its doors thanks to its stringent inspection and authentication by in-house watch experts backed by 19 of the world’s largest watch manufacturers, but wants that rigour replicated across the industry.
According to Steve Wilkins, a former British detective chief superintendent, more than three quarters (78%) of owners who have had a watch stolen say that their timepiece was never recovered. “It’s time for us to do more to protect our watches and help combat watch theft once and for all. The partnership between Watchfinder and Enquirus is a positive step in the right direction to help make stolen watches too hot to handle and more difficult to sell on,” he adds.
Enquirus works by encouraging watch owners and industry partners to register, declare and search for lost and stolen watches and jewelry through individual or business accounts.
The process for individuals could not be simpler. First, create an account and register your collection using the brand and serial numbers. Secondly, upload documentation to a secure digital vault. Should the worst happen and a watch is lost or stolen, the owner can quickly report it with Enquirus, which then alerts all partner organisations so it is flagged.
Whenever the watch reappears, customers are quickly alerted and, hopefully, reunited.
Even before buying on a secondary market site, people considering the purchase of a pre-owned watch or piece of jewellery can check the database and ensure that it is not stolen.
Enquirus has more than 175 luxury watch brands and several top jewellery brands already pre-loaded, to make registration easier for clients. These include all the Richemont maisons, as well as other major players in the watch industry.
Thousands of customers have uploaded their collections to date, and there are 28,000 watches and jewellery items registered as lost or stolen.
The Département de Sûreté Territoriale in Paris, as well as the Geneva Police Service des Bijoux department and other European police forces are registered with Enquirus and using the platform to help break the cycle of theft and resale of stolen watches and jewelry.
Current insurance partners include, LMG Jewellery, the UK’s largest organisation specialising in the professional management of insurance claims for jewellery, watches and other valuable items, as well as Zurich Insurance Group, the largest insurance company in Switzerland. and auctioneer Bonhams.
