The end of an Era?

Christie's New York December 9 Watch Auction Review.

As soon as the final hammer fell at Christie’s New York bi-annual auction of Important Watches today, my phone started buzzing; ‘What happened?’ ‘Is the market soft?’ ‘Why did so many of the big lots not sell?’

With a sale total, including buyers’ premium, of almost US$6.4 million dollars you would think it should be considered an amazing success, which in many ways it was. They achieved $317,000 for an average condition Patek Philippe Ref.3448 retailed by Tiffany & Co, which was significantly higher than the almost identical example, in similar condition, sold by Antiquorum New York in 2009 that achieved $132,000. Soft market? Definitely not. Especially when you take into account lot 105, a Patek Philippe Ref.3450, that made a very respectable $197,000. 

  Image from Christies catalog, lot 407, of the Patek Philippe Ref.3448 retailed by Tiffany & Co.

Image from Christies catalog, lot 407, of the Patek Philippe Ref.3448 retailed by Tiffany & Co.

First off, to bring it out in the open, the watch auction world, particularly perhaps Christie's, has seen a significant shake-up recently. Several of the most experienced people, including Christie's world-wide head Aurel Bacs, myself and then Bacs replacement Sam Hines, all left their respective senior positions roughly at the same time. Collectors who were used to receiving buying guidance from someone they knew and trusted are now often having to use the sparse condition reports or, worse, advice from inexperienced specialist’s who  don’t know themselves. This inexperience was perhaps reflected in today’s results with 78 of the 408 lots offered failing to find a buyer, representing roughly an 82% sell rate. This figure is impressive when you consider that the last Sotheby’s Geneva watch auction achieved a sell-rate percentage of around 62 percent, but a far cry from the usual performance we have seen from Christie's watch department in recent years. Personally I don’t recall the last time the leaders in the watch auction field had a sale below 90 percent sold, an achievement they are, or were, immensely proud of. The big question is, now they have a new world-wide head for watches, is this the beginning of the end or just a bump in the road for the once dominant department?

Some will say the market is due for a price correction and these are the same people that will use today’s result as justification for their remarks. Sure, there are currently fewer buyers from China and Asia and the strong US dollar didn’t help, but when a decent watch was offered, it made a decent price. In a way a more focused pool of buyers is a good thing, you can’t offer over-estimated current production watches or poor quality vintage examples and hope that one devoted billionaire will put his hand up to buy it. This isn’t a market adjustment; it’s a wake-up call. If you offer correctly priced modern watches and good-condition vintage examples, the buyers are still there ready and willing to pay, just look at the recent Christies Geneva (regular sale) results. 

  Image of a Patek Philippe Ref.5204,the same as unsold lot 304 at Christie's

Image of a Patek Philippe Ref.5204,the same as unsold lot 304 at Christie's

As an example, in today's market a Patek Philippe Ref.5204 is worth around US$240,000, the example offered at Christie's (lot 304) with an estimate of $230,000-330,000, plus buyer’s premium, would have cost you at least $285,000. Now I confess sometimes big auction houses have clients that just want it regardless and will bid anyway, which is obviously what the NY team were hoping for, but it didn’t happen and the lot didn't sell. Does that mean the market has dropped? No, it means the watch had the wrong estimate. The list of poor condition vintage examples that failed to sell is too long to go into; needless to say Christies NY should consult their in-house specialist’s more regularly to check the Rolex watches being offered in New York. The Milgauss, lot 333, had a dial in very poor condition and the estimate should have reflected this (didn’t sell), lot 403 the gold Rolex Daytona signed Tiffany & Co, well, what to say, no matter how small you make the catalog image you can’t hide the fact Tiffany never signed the dial (also didn’t sell). I didn’t view the other unsold Rolex 6542, 1665 (patent pending) or 2508 to comment but none sold. From the Patek Philippe vintage selection the first lot to miss its mark was a rare oversized rectangular example made in 1919, estimated at $50,000-70,000 it was perhaps considered that if a very similar, albeit exceptional, example could sell in Geneva in 2012 for $155,000 then a poor condition example with restored dial must be worth at least $62,500. Obviously not as it also failed to find a buyer; In short all of the big ticket watches that failed to sell did so for a reason, not because the market is moving out of watches, its not, but because wealthy collectors are usually smart and know when they are being led astray by overpriced or poor examples.

 Of course there were high’s to the sale today, other that the Patek Philippe Ref.3448 and 3450 previously mentioned, the gold Rolex Ref.6542 made a reasonable $112,500, ok so this wasn’t even close to the $214,000 a similar watch sold for in Geneva last year but John Reardon simply doesn’t inspire the same confidence when bidding for vintage Rolex as Aurel Bacs.  Similarly respectable was the Ref.6101 Rolex cloisonné dial cover watch, lot 124, that made $425,000 with an estimate of $200,000-400,000. Perhaps not huge figures but impressive results were achieved by lot 173, the (heavily worn) Richard Mille RM011 that made a total $87,500 (well above its 2007 retail price) but sold for charity so a fantastic result, also of note was the Rolex green bezel Submariner Ref. 16610 that made an impressive $9,375. 

  Image of lot 304 from Christie's New York catalog that made an impressive $9,350.

Image of lot 304 from Christie's New York catalog that made an impressive $9,350.

Overall I personally feel investors and collectors can relax slightly, although I have heard from multiple sources how prices are dropping, this seems to be restricted to certain current production watches and follows a slow-down in the retail sector experienced a year ago. It also seems that only a few people, possible those looking to buy cheap, are the ones spreading the rumour…. Excellent condition discontinued modern watches as well as correctly priced current production, or desirable, original condition well preserved  vintage continue to be in demand. 

Tomorrow is Sotheby’s New York Important Watches auction and I expect we will see much of the same from them, with poor examples failing to sell and stunning pieces, such as the catalog cover pocket watch, making great prices.