Sweeping away years of scepticism around online sales, the Covid-19 pandemic pushed the auction world into an incredible phase of experimentation last year. In a bid to find newer ways to connect with their clients amidst a global health crisis, luxury auction houses took a massive digital leap with record sales in 2020.

According to Mercury Project, a Switzerland based research firm, the five big auction houses —Antiquorum, Bonhams, Christie’s, Sotheby’s and Phillips clocked a revenue of CHF 316 million against all odds last year. “As the world started to shut down in March, we were not sure how the luxury watch market would respond to the pandemic but we soon realised that our clients were still hungry forwatches. They wanted to buy from the confines of their homes. So instead of having our usual auction in May, we organised our first auction for 2020 in June,” says Alexandre Ghotbi, Phillips head of Watches, Continental Europe, and Middle East director.

The Digital Boom

A smashing success of sorts, this live watch auction proved to be a game-changer not just for Phillips but the overall industry, which had been talking of digital sales for over a decade but not with the same conviction as seen in 2020. “Our sales at this auction totalled over USD 31.7 million. It was the first-ever, non-thematic white glove auction. We had over 2000 people bidding online and over phone calls, it was just so exciting,” says Ghotbi.

Although the pandemic hit a pause button on an entire season for auctions in spring 2020, the world’s top five auctioneers organised 189 sales for luxury watches last year, up from 66 in the pre-pandemic world of 2019. According to the Mercury Project, there were 9,392 watches sold through auctions last year, down by just 10 per cent as compared to 2019.

In some ways, the pandemic has also changed the unsaid rules of the auction world. Until a few years ago, one could not imagine collectors picking up grail watches at an online auction. There was always a price ceiling for pieces going up on a digital stream and achieving world records was a tough feat. Not anymore. In November, Phillips in Association with Bacs & Russo’s Geneva Auction XII sold a rare Patek Philippe world timer ref. 2523/1 for USD 5.5 million. “This was one of the top five watches by value that we sold online last year. The watch is one of the only four models made in rose-gold and one of only two to ever appear at an auction. The reference 2523 dates back to 1953 and it was then equipped with the brand’s two crown system, one for winding the watch and the other at 9 o’clock to control the city disk,” explains Ghotbi.

At Sotheby’s, which organised over 140 online sales worth USD 47.4 million (almost eight times the number of sales and five times the value for 2019), 2020 was a record year in terms of the average price of the timepieces sold online. We saw huge gains in contemporary watches made from stainless steel watches by Patek Philippe, Rolex and early examples of Richard Mille and almost all F.P. Journes, discontinued and current production. Most collectors are now buying a great number of expensive watches online. The average price of our watches sold online was up by 50 percent as compared to 2019,” says Sam Hines, worldwide head of Sotheby’s watches. Sotheby’s had a record year for its private sales as well, which quadrupled in value and doubled in volume compared to 2019.

Come One, Come all

Phillips’ summer auction flipped the switch for luxury watch sales across the spectrum, encouraging first time buyers and millennials to explore the world of pre-owned watches like never before. While Sotheby’s overall footfall for online sales reported around 25 percent first time bidders for each of its auctions, at Christie’s 32 per cent of the new online-only sale buyers were millennials.

According to Justin Reis, Global CEO & Co-Founder at WatchBox, the pandemic ushered in a shift in collecting behaviours. It encouraged people to be more research-driven, which contributed to a growing appetite for high-quality watch content. “Many collectors turned to the watch community as a welcomed outlet for entertainment, enjoyment, and distraction. Overall, our clients were incredibly engaged throughout this period. They participated in webinars and IG Live sessions, watched special interviews, hands-on watch reviews and weekly reports on the state of the watch market,” he says.

There was a great deal of uncertainty across the market during the first quarter of the year but the second quarter proved to be incredible for most pre-owned watch businesses. “The consumer confidence was on the rise post the first quarter. While people weren’t going out, they spent time researching, trading, and being more deliberate about the growth of their collections,” says Reis.

The other big factor that led to this boom in online sales was the availability of long-sought-after pieces that made their way into the market thanks to collectors who culled their collection with all that free time on hand. Right from vintage Patek Philippes and Audemars Piguet to Cartiers, old Roger Dubuis and Philippe Dufors, various high-ticket timepieces were bought online by a new breed of young watch collectors who fuelled the market transformation last year.

“The rise of online events, which went up from just 22 in 2019 to 144 in 2020, favoured the arrival of a younger audience — a new generation of collectors aspiring for good value bargains. They aren’t responsive to all price segments, nevertheless Patek Philippe and Rolex seem to be the most popular brand at these events. Despite the fact the watch auction results declined 19 percent in 2020, they confirm the appeal of vintage pieces,” says Thierry Huron founder of Mercury Project.

For collector Wulf Schutz, who is also the founder of the vintage watch dealership Rare & Fine Vintage Watches, 2020 brought in more clients to his business than ever before. “The lockdown brought me closer to clients in some way. I never had (and still have) so much interaction and expressed interest with my existing clients and prospects. I would say I gained more new clients in the last 12 months than in any year before. The existing clients are loyal and keep buying, 2021 is very strong so far,” says Schutz, who thinks the limited availability of great rare pieces was a big driver last year. “My clients were mostly looking for rare Rolex sports models Daytona and Submariner, as well as rare Patek Philippe (last year was focused on higher value time-only pieces). And yes, a great Paul Newman still finds a buyer. The most valuable watches that I had the pleasure to find a new home last year have been a Rolex 6200, several Paul Newmans and some very rare Patek Philippes,” he says.

The Biggest Success Stories

It is no news that the two leading brands in the secondary market are Patek Philippe and Rolex. However, there was also a surge in demand for brands like A. Lange & Sohne, Breguet, Audemars Piguet, Richard Mille and Philippe Dufour. One brand that really outshined the indies brigade was F.P.Journe. The number of F.P. Journes available in the secondary market is really small but the pieces command some of the top lots by value at most auctions. “While Patek Philippe and Rolex account for more than two third of the most rewarded lots, F.P Journe was present in some very high value lots—five in the top 50 (including two millionaires lots) . Same for Richard Mille (4 lots in the top 50). The Heuer Monaco was a surprise in 2020, and I am not convinced such a deal will be repeated, due to the extreme rarity of this kind of offer,” says Huron.

According to Mercury Project, Patek Philippe left Rolex far behind in the race to the top slots at various auction houses in 2020. It commanded 13 pieces out of the 22 millionaires’ lots (in CHF), whereas Rolex had just four millionaire pieces to its share.

“If we extend the list to half-millions lots (56 pieces in total, including millionaire lots), Patek Philippe has 29 lots, followed by Rolex with 14 lots. Both account for 73 percent of the lots and the remaining portion is shared by F.P. Journe, Breguet, Heuer and Philippe Dufour,” explains Huron.

While Rolex and Patek Philippe have proved to be the most dependable brands in times of crisis and uncertainty, Ghotbi says, from an investment perspective, it is not to choose significant models from these brands. “It is interesting to see the rise of collectible modern watches, which didn’t have many takers until a decade ago. Patek Philippe complications from the 2000s, the steel Nautilus, the iconic sports or tool watches from Rolex have also been gaining popularity over the Bubblebacks, which were a rage 20 years ago,” he says.

The other big brand that is making waves in the secondary watch market is Cartier. Hugely popular for its unique design sensibilities and the iconic Tank series, vintage Cartier models are really hot right now and experts feel the demand for these is only going to go up in the coming years. “I was always a fan of Cartier but the market has been relatively soft for some years. What started in 2019 has continued in 2020 and vintage Cartier is experiencing a strong demand and increasing prices. I would say Cartier is the dark horse of the pandemic. Let’s see if it becomes a longer trend,” says Schutz.

Talking of winners, the Phillips auction house overtook Christie’s in sales as the new market leader in 2020. As per Mercury Project, the sales at Phillips were up by 11 percent last year compared to 2019 and the average price paid for each watch sold by Phillips was CHF 105,000, up from CHF 88,601.

According to Alexandre Bigler, vice- president and head of watches for Christie’s Asia Pacific, the auction house set 11 records in 2020 and sold five watches priced over USD 1million. “There was a major conversion to online sales with a 211 percent increase in value offered online. We set a record for the most valuable watch sold at Christie’s online with the sale of Patek Philippe reference 1463 in pink gold that went out for USD600,000. The top five watches by value sold by Christie’s last year, were all hammered at our Hong Kong saleroom, and they are all Patek Philippe timepieces from our Titanium & Ruby Collection,” he says.

The Rise and Rise of F. P. Journe

Challenging the well-established players in the auction market, F.P. Journe has been increasingly hogging the top 10 slots at most auctions over the last couple of years. In January, Antiquorum sold a platinum-cased 2004 Octa Calendrier with a golden dial and brass movement for more than double its estimate to fetch Euros 188,500.

With his diverse range of watches— time-only pieces, split seconds chronographs, and highly complicated watches with chiming and astronomical complications—made in extremely limited numbers, F.P. Journe has turned out to be the new poster boy of the million-dollar club at auction houses across the globe.

Though no one questions the worth of Journe’s unique design language and impeccable quality, there is a lot of curiosity around the recent rise in prices for his watches made between 1999 and 2004 (the “brass period” when F.P. Journe was manufacturing his movements in brass rather than gold). “Over the last few years, I have observed a general tendency, especially from “younger” collectors, to look for something special and break out the uniformity we sometimes see with the big brands. That led to an increased interest in alternative brands –the so called independents. F.P. Journe is probably one of the top three protagonists in that sector. Journe is managing his brand in a smart way by keeping the balance of a low production and control of the secondary market. Honestly, not every FP Journe needs to be 200K in an auction to be an interesting collectible,” says Schutz.

According to William Massena, a noted Journe collector and former CEO of Antiquorum, this is the classic case of economics offer vs demand. They are making less than 1000 watches a year, but the demand is obviously much more. “FP Journe watches are much an acquired taste. A collector needs a certain maturity and experience to appreciate them fully. More experienced collectors are attracted by the uniqueness of a Resonance or a Remontoir d’Egalité. These are watches that you can only find at FP Journe,” he says.

Rare, limited, and made by the hands of a genius, Journe’s watches are functional pieces of art. Everyone wants a Journe, talks about a Journe and is completely fascinated by Journe. Shawn Mehta, the founder of watch4moi.com and an expert on independent watch brands, feels the actual turning point for Journe was the Christie’s 2019 auction where a seasoned watch collector picked up an F.P. Journe Resonance for USD255’595. “The monumental result was an immediate turning point for the Journe market and is one of the catalysts behind the newfound prices for his watches.

It is important to assess the importance of service Patrimoine, which was launched prior to Journe’s meteoric rise, as the brand felt compelled to buy back and service their old watches, in turn, offering the possibility of owning a discontinued F. P. Journe, backed by a three-year warranty,” he says.

As new collectors enter the market and established collectors discover the work of F.P. Journe, the global demand for his watches continue to outweigh an already limited supply. One of the early proponents of the Journe phenomenon, WatchBox has over 30 pre-owned Journes priced between USD 19,950 and USD189,500 on offer right now but they didn’t expect the market to rise this far, this fast. “It takes time for people to research and understand what Journe represents – the legacy, craftsmanship, the story of this watchmaker. Historically, the only pieces that brought major dollars at auction were by Patek Philippe and Rolex. As collectors realized that significant Journe auction results were not just a one-time-thing, both enthusiasm and demand multiplied. Along the way, we have done our best to continue introducing great products to our collector community, and to furthering the knowledge and respect for independent watchmaking,” says Reis. “We believe the repositioning of value set by the auction market is here to stay, as it marks consumers’ recognition of how special and rare these timepieces are. It is important to note that it wasn’t just the market for Journe that was reset. Philippe Dufour’s Simplicity broke through the seven-figure price range, elevating the world’s perception of living independent watchmakers,”he says.

Outlook 2021

While vintage watches from top auction players like Rolex, Patek Philippe, Audemars Piguet and F.P. Journe would continue to garner collectors’ interest in the coming months, independent watchmakers such as Greubel Forsey, Rexhep Rexhepi, Roger Smith, Kari Voutilainen, Philippe Dufour and Petermann Bédat are also expected to do well in the pre-owned market. “We are quite optimistic about the performance of Patek Philippe and Rolex this year. Particularly for Patek Philippe, leading our Hong Kong live auction this May is Alan Banbery’s Unique Patek Philippe Reference 3448J ‘No Moon Phase’ with Prototype Leap Year Indication (estimate US$3.1 Million – 5 Million). This work of art was presented by Henri and Philippe Stern to Alan Banbery in 1975, is now one of the most legendary wristwatches associated with Patek Philippe, and is poised to set a world auction record for the reference,” says Bigler.

Going by the auction calendar for 2021, it seems online auctions are here to stay and they will continue to thrive in the coming months. The Dubai-based team of experts at Christie’s has curated close to 200 lots of rare and coveted timepieces including grand complications from Patek Philippe, Gerald Genta and F.P. Journe for an estimated total ranging from USD 9,000,000 to 15,000,000. “The Dubai Edit online auction will be live between Mar 24 and April 8 and it is set to become a game-changer as far as watch auctions go. Never in the history of watch auctions has a 100 percent online event offered timepieces of such quality, be they modern or vintage,” says Remy Julia, Director, head of Watches, Middle East-India -Africa- Russia.