Before Christmas arrives, a number of important watch auctions are scheduled to take place in Hong Kong, and auction houses are expecting to see an increase in sell-through rates compared with recent watch auctions.
A world record for watches has already been broken – a stainless steel Patek Philippe Ref. 1518 fetched CHF11,002,000 (approx. HK$ 86,112,503) when it went under the block at Phillips Bacs & Russo in Geneva on November 12.
Phillips auction house started with watches in 2015 – and in the first year its watch department went from zero to US$80 million – in a period when the Swiss watch industry entered a period of decline in exports that has continued for the last 16 months.
Sotheby’s watch department has experienced a sharp drop – US$72.8 million in total sales in 2015 compared with US$97.88 million the year before. This year, not counting the last quarter, which is the main season, its total sales so far have been a meagre US$35.5 million. Having said that, it is worth remembering that the results for 2014 were significantly increased by the sale of one single watch: the Patek Philippe Henry Graves Super-complication – the most expensive watch ever sold –
went for US$24 million in November that year.
“Our most recent watch sale on October 5 in Hong Kong saw a healthy increase in sell-through rates compared with previous auctions and roughly half of all lots selling above the estimates. During this sale we also saw broad international partici-pation from a mix of established and new collectors from 29 countries, demonstrating the market’s demand for modern horological masterpieces,” says Katharine Thomas, Sotheby’s acting head of watches, Asia. “Collectors are becoming more selective and price-sensitive, but demand for the rarest, highest-quality pieces remains strong.”
Aurel Bacs of the watch department at Phillips agrees: “Auctions anywhere in the world have the same pattern: the rarest pieces gain in popularity and value, and the auctions are truly international affairs. There are bidders from 40 countries – in the room, online or via phone. And important watches have travelled the world to three continents prior to the big auction day. Thus it is not like in the past when you had more concentration of vintage in Geneva and more contemporary in Hong Kong.”
Hong Kong and mainland China are now dominant forces in the auctions business.
“I would estimate that 30 to 40 per cent of worldwide sales goes to mainland China and Hong Kong. It is a fast and passionate market where the eagerness to compete and win is greater than in Europe and North America. But not only that: the knowledge of the Hong Kong collectors is extraordinary – their research is extremely thorough; they have really done their homework. If I were to put an average collector from Hong Kong next to a European or American average collector for a quiz, I am sure the Hong Kong collector would come out in front,” Bacs says.
By tradition Patek Philippe and Rolex represent the bulk of the income. Both are rock-solid names that wrote the horological history of the 20th century – and, in the case of Patek Philippe, the 19th as well.
It is telling that Christie’s is celebrating its 250th anniversary this year by highlighting the 40th anniversary of the Patek Philippe Nautilus. The first of four sales with 10 watches per sale took place in Dubai in October and, on November 28, Hong Kong hosts the second quarter of the sales with the boat-window inspired designs.
Of course, there are important vintage watches from other brands as well, for instance from Abraham-Louis Breguet, inventor of the tourbillon.
In 2012, Bacs, while at his previous workplace, Christie’s, sold the Montre plate à deux mouvements, sur le principe des chronometers, made by Breguet for US$4,682,165.
At the same time, Omega watches are popular– and are fetching staggering prices. Audemars Piguet and Panerai have also been doing well at recent auctions.
It would be easy to think that auctions might have a negative impact on sales of new watches. But Bacs thinks otherwise.
“Auctions are not a threat to the watch market. We are too small. If you were to pack together all the auction houses in the world and compare us to the watch brands, I would estimate that we would end up around place 10 or 15. Swiss exports are still up on 10 to 15 years ago. I would say that after 15 years of heavy partying, the watch market is now going through a phase of detox.”