The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
Swiss luxury watch brands have long considered the market for pre-owned watches as a potential threat to their business, but now their view is shifting as they see it can provide valuable insights into pricing and demand.
Initially seen as cannibalising sales of new watches, the pre-owned market has become the best place to assess the value of a watch over time and provide liquidity to watch owners who want to trade in their watch for a new one.
Richemont, which owns Cartier, has so far been the only big luxury goods company to embrace the pre-owned market with its acquisition of online store Watchfinder in 2018.
Watchfinder has just launched a home collection service to make transactions easier during the pandemic.
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Justin Reis, chief executive of pre-owned platform WatchBox, said the size of the pre-owned watch market was estimated at $16 billion and WatchBox’s business was growing about 25 percent per year, including last year, when sales of new watches took a severe hit.
“We’ve seen so much in terms of new tailwinds pushing this sector. There’s been a cultural change where people are more emphatic about collectibles,” Reis told Reuters.
Reis said prices for popular Rolex, Patek Philippe or Audemars Piguet models had increased by around 25 percent and smaller independent brands like H. Moser & Cie, F.P. Journe or De Bethune were also gaining traction on WatchBox.
WatchBox and Watchfinder both set out as online platforms, but now also have some physical showrooms.
H. Moser & Cie head Edouard Meylan told Reuters demand for the brand’s new watches had benefited from the “good job” WatchBox and peers were doing in the secondhand market.
“Some brands still try to fight this market instead of working with it,” Meylan said. “We monitor it almost day by day, it gives us indications on prices, on what we should produce,” he said in an interview ahead of the Watches & Wonders virtual industry event launched on Wednesday.
Watch brands like Audemars Piguet and established retailers like Bucherer have already started selling pre-owned watches, while eBay recently launched an authenticity guarantee for luxury watches sold on its marketplace.
Kepler Cheuvreux analyst Jon Cox, who estimated the size of the pre-owned market at close to $20 billion, said brands used to see the secondary market as a channel for discounted grey market products, but tighter controls had helped ease that problem with some pre-owned models now selling at a premium.
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“This is a positive,” Cox said. “It is part of the change that ultimately can rejuvenate an industry that struggled for much of the last decade.”
By Silke Koltrowitz; editor: Jane Merriman.
Hermes saw Chinese buyers snap up its luxury products as the Kelly bag maker showed its resilience amid a broader slowdown in demand for the sector.
The group’s flagship Prada brand grew more slowly but remained resilient in the face of a sector-wide slowdown, with retail sales up 7 percent.
The guidance was issued as the French group released first-quarter sales that confirmed forecasts for a slowdown. Weak demand in China and poor performance at flagship Gucci are weighing on the group.
Consumers face less, not more, choice if handbag brands can't scale up to compete with LVMH, argues Andrea Felsted.