Expert Interview: Should You Consider A Watch As Your Next Alternative Investment?

Some categories of high-end and limited watches with extremely high values could be considered an investment due to a very limited amount ever produced. Or, for instance, a unique and only one timepiece, in which case it might be resold at a higher value than the purchase price. It is very important to take into consideration the estimated future value of the timepiece as the market can change quickly.

Mr. Guillaume Kriquet, who works in the watch industry in Geneva, gave an interview on the topic of “watches as alternative investments”.

-Good afternoon everyone, today we are having Mr. Kriquet with us. Thank you very much for coming!

-Thank you for inviting me.

https://www.youtube.com/watch?v=84VJrkiCOUU&lc=UgweuUKlDmuaIvl7dOF4AaABAg

-We will be discussing  the topic “Watches As Alternative Investments” today. Mr. Kriquet, why do people invest in watches?

-People invest in watches for various reasons. I would say that the first reason is an emotional reason. People buy watches to celebrate birthdays, new-born kid, weddings, engagement also to look like their icon. You know, more and more people are used as brand ambassadors, so that would be the emotional factor. Financially speaking, there are people investing in watches in order to make a profit out of it, which is the second reason. This reason is very particular and would work only if you know very well the market of the watch industry. The market for the watch industry is pretty much like a stock market. Every week the value of the watch can change – can go up or down.

-Would you say that the watch market is growing nowadays?

-Yes, it’s growing nowadays. People are more and more interested in owning timepiece, but obviously, regarding the actual situation, I can’t tell you for sure that 2020 is going to be an amazing year for the watch industry. Obviously, we are facing a huge crisis worldwide with the coronavirus, so all the shops are closed, nobody is selling anything, and nobody is buying anything. It’s a very particular time that we are living in right now. I would say that during the last 2 to 3 years people were buying more and more watches, but I think 2020 would be very different. People are already scared of economic reasons and they don’t really want to buy anything. Funny fact, my father told me yesterday that in France for the month of March they were no transactions made at all for the real estate. In the whole country nobody bought a property, so imagine a watch. People are not really willing to spend any money right now.

-So, would you say that the risks are very high to invest in watches?

-If you purchase something now, yes.

-What watches can you consider as a good investment?

-There are brands that created a couple of models that are trendy right now. People want to get those watches and that’s joining the point of the emotional factor linked to the brand ambassadors. Because of this, so many people want to purchase these models, because they think that it is cool. The problem is that these models are pretty much not impossible to get, but if you don’t have the right connection it’s quite difficult to get. For some watches you need to wait a decade to get it for retail. Like always there’s a “but”. But there is a second-hand luxury watch market, which is a very specific market and people nowadays tend to buy watches as investments. They buy the watch at retail and try to resell it at the premium price. But more and more brands are aware of the situation and they’re trying to go against those people. It is a very unfair thing to do, when you buy a watch just to resell it as there is no emotional connection to the watch. People just want to buy it to make a profit out of it. But the thing is that more and more people are waiting and that is why you get at the end of the day a waiting list for a few years or even a decade for some of the watch models. And I think this is not fair for the people that really want to get the watch to enjoy it every day, to wear as it means something to them. Nowadays brands and clients are actually making an agreement in order to not resell the watch after the purchase for a minimum of at least two years. If you do that before two years you might end up on the blacklist, so the day you will come and you actually want to get a watch for yourself (for an emotional reason), you won’t be able to get it as you got blacklisted before. This is something you really have to take it into consideration and be careful with.

-And what about the “Only Watch”?

-The “Only Watch” is a beautiful thing created a couple of years ago. It is a foundation created by man, who lost his son through a very tough disease and asked pretty much all the watch brands, all big manufactures, and big independent names to create unique watches in order to put them in auction once in every two years. The auction takes place in Monaco, in Geneva and another couple of big cities across the world. Actually, it works pretty well, and watch brands are happy to create a unique timepiece for this occasion. In 2019, we saw the biggest watch sale happening in the world. Four or five years ago there was Rolex that sold for 16 million in New York. It was a Paul Newman Daytona worn by Paul Newman. Last year it was Patek Philippe stainless steel watch with a salmon dial that has been sold for 38 million excluding tax and fees. So, the watch market is growing, the interest in watches is growing and prices are going out of control in some ways. At the end of the day you have to remember that it’s a wristwatch, it’s a tool and, when you think about the world we’re living in, it might be crazy to buy a watch for that much money.

-You also mentioned before that there are two types of watches that people invest in.

-There are the retail watches, those of the current collections that you can find in boutiques, and there is a market for vintage watches. Vintage watches can be very tricky, but people love vintage watches, because there is a history. With vintage watches you really have to be careful. If someone in your audience wants to buy a vintage watch, keep in mind that there are a lot of things to check before purchasing the watch. First of all, make sure that the watch is original. This means that you can go to any official boutique, even if it’s a vintage watch, you can send it to the HQ and check if the watch is original. Secondly, check if every component is original on the watch and that nobody changed them, for instance, the dial, the case. Even polishing on the case can affect the value of the watch after, if you want to resell it. So, there are a lot of things to take into consideration, but the vintage watch market is growing every day. 

-Perfect, thank you very much for sharing with us your knowledge. We wish you a great day and will let you know if visitors of the website will have some questions for you.

-My pleasure. Thank you very much, bye.

Nowadays watches can be considered as a profitable investment. Also, investors don’t have to physically purchase the watch, but they can also do it online. For instance, Sotheby’s and Christie’s (one of the biggest auction houses) let investors to check the models and purchase them directly from their platforms.

I hope you have enjoyed reading this blog and I am looking forward to further discussing this topic with you below in the comments.