Before the pandemic, sales mostly featured more run-of-the-mill timepieces. But that was then.
On May 4, at precisely 8 a.m. in Los Angeles, two prospective buyers began a spirited bidding war on the watch auction website Loupe This over a rare 1967 Cartier Crash wristwatch.
By the time the frenzy — 34 bids over 20 minutes — had ended, the bidder identified as “swoop” had beaten “sionofbo” with an offer of $1,503,888. Once the 10 percent buyer’s premium was added, the total was nearly double the highest result ever achieved at auction for the famously bent-out-of-shape timepiece, an icon of 1960s watch design.
“We smashed the record for a London Crash,” Eric Ku, a co-founder of Loupe This, said on a recent phone call, referring to the London designation on the dial, denoting an early and highly sought-after variation of the timepiece.
While the moment had none of the drama associated with a live auction — no bidders wielding paddles, no auctioneer rattling off prices and certainly no hammer — it epitomized where many industry experts think the future of luxury watch auctions is headed: the internet.
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Online watch auctions have been around since 2002, when eBay pioneered the format, but it took the established auction houses — including Bonhams, Christie’s, Phillips and Sotheby’s — another 11 years or so to begin holding dedicated digital watch sales. Until recently, however, they treated those events as a way to auction more commercial timepieces whose sales made up in volume what they lacked in prestige.
The pandemic changed all that. In addition to supercharging demand for all things digital, it gave rise to a handful of online-only watch auction upstarts — like Loupe This, founded in 2021 in Los Angeles — that have challenged conventional wisdom about how much collectors are willing to pay online. In the process, these newcomers have underscored the appeal of auctions at a time when the market for collectible timepieces — especially steel sport models such as the Patek Philippe Nautilus, the Audemars Piguet Royal Oak and the Rolex Daytona — appears to be cooling.
“Auctions — the whole dynamic is made for these somewhat turbulent times,” said Silas Walton, founder of A Collected Man, a London-based pre-owned watch dealer that in April kicked off a series of online auctions featuring a curated selection of rare timepieces.
“What we’re seeing is a paused breath on fixed price sales,” Mr. Walton said during a phone interview in June. “A lot of collectors are waiting to see what something is worth before engaging in a sale.”
There is no question that prices on resale websites such as Chrono24 are in flux. At the start of this year, the most in-demand wristwatches were valued at record highs as collectors and dilettantes flush with crypto currencies, stock market gains and stimulus cash began to treat timepieces as an asset class. Then came the war in Ukraine, soaring inflation, the crypto collapse and the stock market’s recent tumble.
Mr. Ku, a well-known vintage watch dealer based in Berkeley, Calif., said prices for key steel sport models had fallen 20 to 30 percent since April.
“In early spring, every auction house tried to do a Royal Oak 50th anniversary sale and those always feel like a harbinger of doom,” Mr. Ku said. “If you hype everything up to that point, everybody starts seeing dollar signs in their minds and tries to get a piece of the pie. And suddenly there’s three times the volume of Royal Oaks than there typically is.”
Even so, many analysts familiar with secondhand watch sales are emphasizing the market’s resiliency.
On July 8, WatchCharts, a research consultancy focused on pre-owned watches, released a report produced in collaboration with Morgan Stanley that analyzed secondhand watch sales in the second quarter of 2022. Among the report’s key points was that prices for highly traded models had declined since April, but “the secondary watch market remains strong relative to equity or crypto markets.” It noted that secondhand prices of the 30 most-traded Rolex watches had risen 35 percent since January 2021, while the Standard & Poor’s stock index was what it called “essentially flat” and Bitcoin was down more than 30 percent against the dollar.
In spite of the current market turmoil — or perhaps because of it — online auctions, once “an experiment,” have become “a necessity,” said Rebecca Ross, New York-based associate vice president and head of sale for watches at Christie’s.
Ms. Ross said the house held its first online watch auction in 2013, but it only recently became clear that online was “the primary way our clients want to buy watches,” she said.
Millennial collectors comprise 34 percent of the clients for all watch auctions, both live and online, she said, adding, “They are younger, they are hungrier, they are not willing to wait.”
That may explain why Loupe This’s five-day-a-week auction schedule and A Collected Man’s seasonal weeklong sales have struck a chord with buyers and sellers. Unlike live watch sales — which typically are held in late spring and late fall in the watch world’s three major cities of Geneva, Hong Kong and New York — online auctions offer timepiece lovers a quick, year-round fix with no worries about canceled flights or middle-of-the-night phone bids.
“We will never replace the traditional auction schedule, but we occupy the downtime,” Mr. Ku said. “Every weekday, there are auctions. It doesn’t matter what time of year it is.”
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Rich Lopez, senior watch specialist and head of online sales at Sotheby’s New York, said that shortly after he joined the house in February 2020, his experience in online sales proved more critical than anyone could have anticipated. From April to December of that year, he helped Sotheby’s organize a series of weekly online watch auctions, more than 100 in all, run out of its Hong Kong, New York, Geneva and London offices.
The payoff has been evident. In 2020, Sotheby’s online-only watch sales earned a total of $46.9 million, five times more than in 2019, Amanda Bass, a spokeswoman for the house, said. But it wasn’t just about sales; the digital format was attracting new and younger buyers.
“Because we were online-based, we started to see fresh customers that had never transacted with us before,” Mr. Lopez said on a recent call. “Nearly 40 percent of online buyers year-to-date were under 40. That was a 50 percent improvement over 2019. And nearly half of the buyers had never bought a watch from Sotheby’s.
“A third of buyers were from Asia,” he added. “That was a little bit surprising because normally the Asian market wants to go to previews, touch it, see the condition.”
Even more surprising to Mr. Lopez was how much online bidders, in general, were willing to pay. “The number of lots selling online in the $50,000 to $100,000 range has increased 65 percent in over a year, from 2021 to 2022,” Mr. Lopez said.
Numerous auction experts said comfort — or, more accurately, a lack of discomfort — was one of the biggest benefits to bidding online. “You’re engaging with an audience that not only appreciates the convenience and flexibility, but also people who have found more traditional auction mediums intimidating,” Mr. Walton said.
The other big benefit is speed. Just ask Sam Hines, the former global head of watches at Sotheby’s who in June joined Loupe This as its Hong Kong-based managing director. A live sale, from start to finish — collecting watches, “to photographing, cataloging and marketing, to holding the auction and selling, to getting payment from the buyer and paying the seller — can take up to six months,” he wrote in an email.
At Loupe This, Mr. Hines wrote, the entire process takes about a month.
And yet large and influential players in the luxury watch market, particularly those that specialize in rare, vintage timepieces, remain committed to live auctions, with all their pomp and circumstance. Phillips, which runs its watch department in association with the consulting firm Bacs & Russo, is chief among them.
Phillips is in the midst of its first dedicated online-only, noncharity watch auction, which closes on Wednesday. But as the record-holder for the most expensive wristwatch sold in a noncharity sale (Paul Newman’s $17.8 million Rolex Daytona), the company is not about to stop printing catalogs for its live sales or forgoing the elaborate world tours of its offerings before the auctions, said Paul Boutros, Phillips’ head of watches in the Americas.
“We view the dedicated online auctions as a volume-based business,” he said. “But a live auction is a cultural event that brings together the community.
“When everyone on the phone, online, in the room participates in the bidding, it’s much more competitive,” Mr. Boutros added. “It becomes emotional, with lots of adrenaline — especially when you have a live auctioneer, like Aurel Bacs. In maybe 50 words or less, he’s telling the story of the watch. And people pay attention.”
But will all that still be a winning strategy for an audience of global buyers weaned on watches and screen time during the pandemic?
Mr. Hines may be biased, but he has a different view: “In five years’ time, the live auction will offer 100 great vintage watches and will be like the Wimbledon tennis tournament,” he wrote. “Is it best to play on grass with a very small audience? No.
“However, it is a very prestigious event that everyone loves. It will never disappear — however, all other tournaments have much faster games with much greater audiences.”
