Dialing up the bids

While retailers across America shuttered their doors or opened only to serve a dwindling trickle of customers during the Covid-19 crisis, sales at auction houses boomed in 2020. Thanks to Zoom previews, online video condition reports, and easy online bidding, auctions became virtual one-stop shopping destinations for lovers of luxury watches.

Phillips in Association with Bacs & Russo — the full name of the auction house’s watch department — led the market with total sales of $133 million last year. Not only was this a record for Phillips, it was the highest annual sale total across any watch auction department in history. Phillips had 15 timepieces fetch more than $1 million each, including the top three that sold at auction in 2020: two Patek Philippes and a Rolex, signaling the continued dominance of these two brands.

Sotheby’s and Christie’s also saw respectable numbers. Including live auctions, Sotheby’s watch sales for 2020 totaled $97.5 million, while Christie’s came to $79.8 million and set 11 records for specific reference numbers. Sotheby’s sold the fourth- and fifth-highest-priced watches last year, and Christie’s had five of its timepieces go for over $1 million.

Power to the web

The strongest emerging trend in 2020 was the growth of online bidding. Phillips — which held live auctions in Hong Kong and Geneva, but not in New York — recorded 50% more online participants last year than in 2019, and 95% of the watches it sold received bids via the web.

“We saw a 254% increase in downloads of the Phillips app, a 136% increase in new online accounts, and a 62% increase in the number of new visitors to Phillips.com,” says Paul Boutros, head of watches for the Americas at Phillips. “The growth is coming from new, online-savvy clients, as well as existing clients who are becoming more comfortable with online bidding during our live auctions.”

Sotheby’s saw a similar increase in digital bids. The auction house says 92% of watch lots that sold last year went to online buyers — 60% more than in 2019.

“The digitalization of our business has been a key priority for a few years, so we were able to quickly adapt to the new market parameters,” says Sotheby’s worldwide head of watches Sam Hines. “We held over 140 online watch sales last year, which totaled close to $50 million — almost eight times the number of sales and five times the value for 2019.”

Christie’s watch specialist Mike Fossner notes that “auctions are historically known for being social events, and that was forced to change. Alongside this has come a trend of higher-end pieces being offered on online platforms.” Indeed, last year saw a 211% jump in the total value of the auction house’s online watch offerings, Fossner relates, and “the Christie’s watch department broke the record for online watch sales three times.”

Welcoming newcomers

Accompanying the surge in web-based activity was “an influx of first-time buyers, including a robust millennial audience,” according to Phillips’s Boutros.

Sotheby’s found that 50% of its watch buyers last year were new to the category, and that 40% were under age 40. “We have also seen a growing appetite for ‘Buy Now’ — a new capability on our website and app with fixed-price offerings, as opposed to the auction format,” says Hines. “Since we soft-launched this in September, we’ve seen an average sold-price point of $16,000, and 56% of those buyers were brand new to Sotheby’s.”

At Christie’s, Fossner says watches attracted more new registrants for online sales than any other department last year, up 20% from 2019.

Independent stars

Another notable trend was the rise of independent brands. Phillips dedicated an entire sale to watches made in the past 20 years. Younger brands such as Philippe Dufour, F.P. Journe and Laurent Ferrier led the event, which totaled more than $15 million.

“The brand that has really stuck out is F.P. Journe,” says Fossner, noting similarly strong sales of independents at Christie’s.

Bonhams has also seen these brands excel. “One example was an F.P. Journe Octa Réserve de Marche in rose gold that sold for GBP 97,750 [about $134,200], four times its estimate,” says Jonathan Darracott, Bonhams’s global head of watches. That said, the auction house’s two top watch lots this year were no surprise: Both were Paul Newman-style Rolex Daytonas, which sold for about $326,200 and $309,300. This model remains the hottest one on the market.

On the buying end, the division came in second only to the books department in the number of first-time purchasers.

“It’s more of a rocket ship than a trend.”

Lots to talk about

The top five watches that sold at auction in 2020

1 The 18-karat rose gold Patek Philippe ref. 2523/1 went for just over $5.5 million at Phillips in Association with Bacs & Russo. The watch, which Phillips describes as “mythical,” is one of only four of this reference made in rose gold with a guilloché dial, and one of only two ever to appear at auction.

2The provenance-driven Rolex Ref. 6263 — known as the “Big Red Daytona” — was a gift to actor Paul Newman from his wife Joanne Woodward. His daughter, Clea, consigned the piece, which sold at Phillips in Association with Bacs & Russo for nearly $5.5 million. Its nickname comes from its big red Daytona logo.

3The Patek Philippe ref. 1518 in 18-karat pink gold fetched approximately $3.6 million at Phillips in Association with Bacs & Russo — a world record for that model. The 1518 is one of Patek’s rare original series of perpetual calendar/chronograph watches. This is one of only 13 known 1518 models with a salmon dial.

4The possibly unique platinum Rolex Daytona ref. 16516 chronograph with a lapis lazuli hardstone dial sold at Sotheby’s for $3.3 million, three times its high estimate. It represents a world record price for an automatic Daytona. Made circa 1999, it is powered by a Zenith movement.

5A pocket watch that tourbillon inventor Abraham-Louis Breguet made for Britain’s King George III achieved $2 million at Sotheby’s — a record for a Breguet tourbillon. The king acquired the gold four-minute tourbillon secretly in 1808, during the Napoleonic Wars.

Women of the hour

Diamonds are still a girl’s best friend, but men’s watches increasingly make good companions for female connoisseurs

Women’s watches at auction are evaluated primarily by three criteria: jeweling, maker and provenance — roughly in that order. For example, a diamond and ruby Cartier Panthère made for the Duchess of Windsor is likely to fetch a fair ransom at auction, even with a quartz movement. Gem-setting adds intrinsic value: Take a diamond watch apart, and you’ve got a pile of diamonds; take a grand complication apart, and you’re left with a pile of metal and a few synthetic rubies. Despite this, men’s watches, particularly high complications and cult-status models, consistently outsell ladies’ in both price and volume. And while more women still buy ladies’ watches at auction, there is an emerging preference for men’s.

“In the past five years, we have seen more female collectors buying vintage men’s watches like the Rolex Daytona in all types of metals,” says Sotheby’s head of watches Sam Hines. “We have even had Asian ladies buying important vintage Paul Newman models [of the Rolex Daytona]. Five years ago, this would never have happened.”

Mike Fossner of Christie’s suggests this trend may be due to a desire for less ostentation these days. “It’s been postulated that because many ladies’ pieces are designed to be more showy, they’ve been less of a focus at present.”

Paul Boutros of Phillips confirms that “we aren’t selling more women’s watches, but more of our female customers are buying men’s watches.” Of the women’s models Phillips does sell, prices are up slightly, especially if they are gem-set. “A model can see its value increase tremendously with the presence of factory gem-setting [in which the jeweling is done by the original maker, rather than a third party in the aftermarket].”

Fossner also notes quality and authenticity as overarching factors. “There will always be a market for great-quality work, and this is certainly the case with watches that have jewels and gemstones,” he says. “There was a recent period when some brands used the addition of stones to drastically increase [the manufacturer’s suggested retail price] artificially without paying attention to quality, [but] buyers have been educated away from such items.”

Bonhams is “starting to convert jewelry buyers to jeweled-wristwatch buyers,” adds the auction house’s Jonathan Darracott. “Particularly in sales of vintage pieces from the mid- to late 20th century. At that time, watchmakers experimented with new materials, designs and case shapes. They were more playful and fun, which appeals to those who want a more decorative timepiece that stands out.”

Notably, ladies’ jeweled watches consistently sell for less at auction than non-jeweled men’s, which makes them something of a bargain — or less of a risk — considering their greater intrinsic value.

Article from the Rapaport Magazine - March 2021. To subscribe click here.