Friday, December 21, 2007

Watch Buyers beware!

As printed on the front page of The Wall Street Journal Oct. 8, 2007, the famous auction house Antiquorum of Geneva has been staging unethical auctions for decades in which the leading watch makers have been anonymously buying their own creations with the intention of driving up the perceived value of their wares. And it works. Why does a relatively simple stainless steel Patek Philippe sell for $30,000? Because people think it's worth that much. By artificially inflating auction prices the watch makers in cahoots with auction houses are creating a perception of collectibility where there may be no depth of collectors. The Journal's article focuses primarily on the so called "Omegamania" auction in April which set many new records for Omega and helped establish them as a leading brand, despite the fact that their watches are mass produced.
Conversely, Gray & Sons, the world's market leader in pre-owned high end timepieces, sets prices the old fashioned way - supply and demand. Printing over 200,000 catalogs annually and sending them around the world, Gray & Sons are able to put their finger on the pulse of what the public wants in brand name watches. We price watches according to what is fair and reasonable in the existing market, without a 10% or 15% sellers commission or the normal 20% buyers commission that auction houses charge, not only to make money off the top but also to increase the final sale price to well beyond the fair market value.
Osvaldo Patrizzi, the founder and president of Antiquorum, was removed from his position by the board of directors shortly after the Omegamania auction, but remains a minority stock holder in the company. An outside auditor was brought in to scour the books and records. The moral of the story, however, is that the practice of artificial price boosting is not illegal and no doubt will continue as long as it remains so.
If you find yourself in the market for a collectible watch, check the website at Gray & Sons first... you may be very glad you did.


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January 14, 2008 3:13 AM  
Anonymous Anonymous said...

In the latest WatchTime magazine, Mr. Patrizzi reponds to the article you mention, and it is clear to me and to most that the article was nothing more than sensationalistic journalism filled with half-truths and outright falsehoods.

The reason the watches at auction sell for so much is that they are often very limited production runs (some are unique watches) or watches with particular history.

In these events, they are not typically selling mass-produced watches. In the case of Omega, for example they sold some very rare watches, some of them Omega did buy for inclusion in their warewhouse. The assumption that their participation in the auction somehow drives up the prices of their current production watches is preposterous. You can get a nice mechanical speedmaster for under US$2000 new in the box.

An old addage should be remembered: "Believe very little that you hear, a tenth of what you read and only half of what you see."


February 02, 2008 3:45 PM  

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