Face value

10 August 2021
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Smartwatches may be able to operate as maps, phones and health monitors, but classic mechanical watches still demand a much higher price at auction, says Gareth Francis.

The global smartwatch market is booming. Valued at $20.64 billion in 2019, it is expected to rise to $96.31 billion by 2027. Smartwatches can track our steps, play music, be used as a wallet and much more besides. But while they are selling in huge numbers, their individual value still doesn’t come close to certain classic watches sold at auction.
 
The Tag Heuer Connected Modular 45 Full Diamond is the most expensive smartwatch on the market at the time of writing, costing a cool $180,000. Meanwhile, the one-of-akind 2019 Patek Philippe Grandmaster Chime Ref. 6300A-010, sold for an incredible $31.19 million in 2019 at the Only Watch charity auction in Geneva, becoming the most expensive watch of all time.
 
It took the distinction from The Henry Graves Supercomplication, made by the same manufacturer. That model had itself broken the auction price record twice in the past, first in 1999 when it sold for $11 million, before breaking its own record in 2014 when it fetched $24 million.
 
The watch was commissioned by banker Henry Graves Jr. It took three years to design and five years to manufacture, and features 24 complications (functions other than time telling), including being able to play the Westminster chimes and housing a celestial map of New York as seen from the Graves’s apartment at 834 Fifth Avenue, New York.
 
“The Henry Graves Supercomplication is the most famous watch in the world and the most complicated watch ever made by human hands without computer-assisted technology,” says Benoit Colson, Deputy Director, Specialist Watches at Sotheby’s. “It is considered the Holy Grail of horology and Sotheby’s had the privilege to sell this masterpiece twice.”
 
But while these pieces sit at the top of the table in terms of value, there are plenty of less expensive options for those considering venturing into watch investment. So, what should potential buyers consider before looking to invest?

Put in the hours

Colson says that the first step for those interested in watch investment should be to understand one’s own taste. Investors should then research what pieces might also make a worthwhile investment. To do this, he recommends comparing retail prices (original sale prices) and secondhand market prices (auction estimates and results, second-hand dealers’ prices). “After years of passion, you will be able to have a sense of the forthcoming trends and directions taken by the market,” he says.
 
When looking to buy at auction, he recommends focusing on mechanical watches as most collectors today focus on the technical prowess, craftsmanship and tradition embodied by these pieces. Unsurprisingly, scarcity also comes into play when assessing value, with  unique watches, as well as special editions and models with low production numbers, commanding higher prices.
 
Similarly, understanding supply and demand in different markets can help investors spot opportunities. Tony Wooderson, founder of thewatchcollector.co.uk, buys and sells individual watches and builds portfolio collections for investors. He says understanding trends in foreign markets can allow buyers to identify pieces locally that might demand a higher price abroad. “The world is a smaller place than it was, but the marketplace is much bigger,” he explains. “I can send a watch from the UK to Australia in a matter of days. It’s easy for buyers to see the product virtually, and it’s easy to get a watch to buyers globally.”
 
And finally, condition must also be factored in. Two of the same watches can have very different valuations depending on the marks they have. However, signs of age or fade do not necessarily mean a lower valuation. “The pieces which really set collectors’ hearts racing (and are therefore the most highly sought-after at auction) have been well-preserved and cherished by their owners – but also have not been restored or altered, even if this means the features are faded,” says Colson. “Unusual dial patina, for example, is a prized effect in today’s market.” 
 

Once upon a time…

Another key factor – and one that is growing more important all the time – is the provenance of pieces. The story of how a watch was made or who its previous owner was can have a huge impact on value. “A watch which has belonged to a great collector, someone famous or an important figure can fetch much more at auction than the same piece would without the provenance,” explains Colson.

A recent example is a Rolex Daytona which sold for $17.75 million in 2017 at Phillips auction house. The watch was originally owned by Hollywood icon Paul Newman, given to him by his wife, Joanne Woodward. He wore the watch frequently, was photographed with it often and the model became known in collecting circles as the Paul Newman Daytona. Even those that had not been owned by Newman were reaching high prices, but the whereabouts of Newman’s own remained a mystery for years.

It had been believed to have remained in the family following his death. In reality, Newman had gifted the piece to his daughter Nell’s then boyfriend James Cox in 1984. The potential value of the watch dawned on Cox over the next few decades, with watch enthusiasts admiring it frequently without realising it was Newman’s original. He finally put it to auction in 2017 with the blessing of Newman’s family.

Stories like this bring watches to life, but pieces don’t need to belong to such famous names to add value. A Cartier Tonneau, originally belonging to a British captain in World War I, sold for over £15,000 earlier this year. It came complete with scuff marks, likely picked up during its former owner’s time on the Western Front.
 
“When searching for a watch to start or add to your collection, be sure to find out if the piece comes with its original paperwork and presentation case,” adds Colson. “This account of a watch’s journey and the way it’s been looked after is precious indeed!”
 

Don't leave it too late 

Wooderson also warns that, as with any investment, buyers should carefully consider what their exit strategy will look like once they are ready to sell their collection. “It is something that is overlooked by most people,” he says. And he warns that this can be even more challenging for people inheriting a collection.
 
“I get a huge amount of calls from families in a stressful situation where someone has died and they have inherited a box of watches, but they don’t know what was paid for them or what they are,” says Wooderson. “It’s something people need to take more responsibility for, to curate their collection properly. What’s happened is that because prices have gone up so dramatically over the last ten years, a lot of people don’t realise what they’ve got before they die. It’s worth having conversations before that day happens.”
 

Time to choose 

While money certainly can be made through purchase and resale of vintage watches, simply focusing on turning a profit can be a bad place to start. While many watches retain their value or go up slightly over time, few owners will make huge amounts of profit from them.

Colson agrees, and recommends focusing on buying pieces that you truly love. By doing so, you can get use out of it ahead of sale, wearing it day-to-day or on special occasions, but you are also more likely to understand its value to other buyers.
 

Whatever makes you tick

Whether you are looking for an entry level piece or a piece of history, here are five brands you may wish to consider and some starting prices.

  • Swatch

    This Swiss brand has collaborated with artists, designers and other brands to create collectible yet affordable pieces. Boxed vintage models can be found from around £25 on eBay.

  • Accurist

    The soundtrack to the swinging 60s could almost have been the tick of the Accurist. Boxed vintage models can be found from around £30 on eBay.

  • Omega

    Omegas can be picked up for a wide range of price points. Worthwhile vintage models can be purchased for around £1,000. Perhaps the watch with the most potential value in the world is a particular missing Omega Speedmaster; the one worn by Buzz Aldrin when he walked on the moon.

  • Rolex

    A byword for quality. Second-hand models can be purchased from dealers from around £2,000.

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