As Patek Philippe celebrates their 175th anniversary, the major auction houses are celebrating too. Auction houses have done very well over the last few years, thanks to the brand’s popularity among collectors, when it comes to their rarest and most exclusive timepieces. On November 9, 2014, in Geneva, Christie’s will hold its “Patek Philippe 175” watch auction in celebration of the brand’s anniversary. This will be an exciting time, as Patek Philippe themselves will hold various celebrations, along with the unveiling of a new ultra-complicated timepiece, and fellow auctioneer Sotheby’s will be auctioning off the famed Patek Philippe Henry Graves Supercomplication pocket watch, that is expected to fetch around $17 million.
To learn more about Patek Philippe timepiece success at auctions, as well as with collectors, I spoke to John Reardon, the International Head of Christie’s Watch Department. A watch guy and seasoned watch sales expert, John Reardon is one of those people you want around if you have any questions related to watch valuation, rarity, or potential investment worthiness. John is also a diligent advocate of the watch auction process and Christie’s, which is something important to keep in mind when reading his responses and suggestions. So with that said, let’s examine some of the wisdom he has shared below about watch auctions in general about about the Patek Philippe 175 event.
Ariel Adams: The watch auction market is really hot right now. Given your experience, what are some factors responsible for the success of this area of the watch market?
John Reardon: Across the price spectrum, Christie’s has clients that are buying watches for competitive prices. From a couple thousand dollars to millions of dollars, there are quality watches available at all price points. For dealers, they buy watches at auction to sell to their clients. For retail buyers, they are buying modern watches at a fraction of retail with confidence, selecting from authentic watches, properly vetted by our team of specialists. Yet the vintage market is where we are seeing unimaginable growth.
Like the vintage car market, the vintage watch market is where the smart money is making investments. The main reason the watch market is so hot, is that new vintage collectors are discovering the auction world for the first time – and they love the transparency and honesty of the auction experience. These new collectors, combined with an increased level of scholarship and knowledge of the watch collecting world is a recipe for success. Clearly, this market still has room to grow to unknown new highs.
In a world where expertise and authentication is critical, buying a vintage watch at auction is quickly becoming the safest way to transact when one wants to buy a vintage timepiece. There is a comfort knowing that you are competing for a watch, one that has been thoroughly reviewed by our team of experts. Also, it’s just a part of human nature to be driven by the knowledge that others want something as badly as you do, and a great pleasure when you win at auction.AA: When looking at watches to include in Christie’s watch auctions, what are some factors you use to determine if they will be successful lots? What might dissuade you from including a watch in an auction?
JR: Our watch team includes 27 individuals from around the world – the largest and most experienced horological team in the business. When we look at watch for possible consignment, the first things we assess are condition and rarity. Freshness to market is also an important consideration. Once these factors are assessed, price is also a most important factor.
We have a philosophy of conservative estimates that allows the market – our clients – to determine the final hammer price. Auction should be a true competition. The success or failure of a particular watch at auction is often determined by the decisions the team makes when they take a watch in for consignment. Often, if the client requires an estimate that we feel is too expensive, we pass.
AA: Patek Philippe has been a regular star among watch auctions, with strong results, despite relative frequency. How would you explain that?
JR: We estimate that Patek Philippe watches make up approximately 20% of our auctions by lot and over 40% of their value. A great majority of our catalog covers feature Patek Philippe timepieces, and this is a trend that I expect will continue as more and more people join the ranks of Patek Philippe collectors, connoisseurs, and investors.
AA: Are newer Patek Philippe timepieces as successful and popular as the rare vintage models famous for their ultra-high values?
JR: Both modern and vintage Patek Philippe watches are bringing extraordinary prices at auction. Speaking of modern watches, it is basically a commodity based pricing structure. In such an international marketplace, collectors are well aware of the value of watches in the secondary market. However, the days when one could buy a Patek from a retailer with the intent to sell for an immediate profit are gone, with the exception of a small handful of rare references. The reality is that people should buy a modern production watch to wear and enjoy, and pass down to the next generation.
I believe buying a modern Patek is still a solid long-term investment. There are few things in the world today that, with relative certainty, you can say will rise in value over the long-term. You are buying something of real and lasting value, of intrinsic and emotional value. With this is mind, I also suggest that clients buy watches that are no longer being made – and vintage is the safest bet you can make.
AA: What advice would you give to collectors who are interested in purchasing vintage watches, Patek Philippe or otherwise, looking for models that will increase in value?
JR: It is cliché, but you should first and foremost buy what you like to wear and what gives you pleasure. Even after the most recent financial crisis, as most saw their stock portfolios immediately drained, watch collectors were fortunate that their horological assets were still in their vaults or on their wrists. Watches continue to be desirable in both good times and bad.
The best way for people to learn about vintage watches is to read auction catalogs, attend auction previews, and of course, join vintage watch forums and blogs online to see what the watch world is buzzing about.
AA: What about the same advice for people purchasing newer watches interested in value retention and possible future “high-value collectability?”
JR: Buying new watches purely as an investment is relatively risky. You should buy what you love and learn as much as possible about your watches, so that you can make educated decisions when and if you need to sell. I see so many people buying so called limited editions from various brands, convinced these watches will double in value immediately. This is simply not the case.