Luxury watchmaker Audemars embraces pre-owned market
Luxury watchmaker Audemars embraces pre-owned market
The company said it had carried out a test run in one store in Geneva and would launch the business more widely at its outlets in Switzerland this year. If this proved successful, it said it would roll out the operation in the US and Japan.
“Second-hand is the next big thing in the watch industry,” Chief Executive Francois-Henry Bennahmias said in an interview at the SIHH watch fair in Geneva this week.
Luxury watchmakers have hitherto eschewed the second-hand trade, fearing diluting the exclusivity of their brands and cannibalizing their sales. They have instead ceded the ground to third-party dealers.
But some are now looking to change tack, driven by an industry-wide sales slowdown combined with a second-hand market that is expanding rapidly, fueled by online platforms like Chrono24 and The RealReal.
“At the moment, in watches, we leave it to what I call the ‘dark side’ to deal with demand for pre-owned pieces,” added Bennahmias, whose company is known for its octagonal Royal Oak timepieces that sell for 40,000 Swiss francs (SR156,283) on average.
“Anybody but the brands (is selling second hand) — it’s an aberration commercially speaking,” he said, without giving any details about how they would price pre-owned watches.
Several smaller brands, including H.Moser & Cie and MB&F, have signaled interest in the second-hand trade.
“It is important to control the sale of second-hand watches to protect the owners and the value of watches already in the market by keeping the grey market in check,” H.Moser & Cie boss Edouard Meylan said.
MB&F, which plans to launch second-hand sales via its website this year, said it expected to typically give a 20-30 percent discount on second-hand watches. A spokesman said customers buying from established watch brands could feel confident they were getting genuine products in good working order and with a valid warranty.
Bigger brands Rolex, Patek Philippe, Swatch Group, Richemont and Breitling all declined to comment, when asked whether they planned to enter the second-hand market, while LVMH’s watch division was not immediately available.
Audemars Piguet said it would launch its second-hand business in several, but not all, of its 26 Swiss outlets, but declined to specify how many stores or give a more precise date.
It will initially allow customers to trade in old Audemars Piguet watches as part-exchange for new ones, and then sell on the second-hand watches. It has not yet decided whether to buy second-hand watches for cash, added the firm, saying its sales had come close to the 1-billion Swiss franc mark last year.
Experts say the second-hand luxury watches business, mostly done via online platforms or specialized retailers, is growing rapidly as a new generation of customers that values variety more than permanent ownership enters the luxury world.
In an example of the discounts offered online, a diamond-studded Audemars Piguet Royal Oak “with moderate scratches” sells for $9,450 on The RealReal, about a third of the “estimated retail price.”
Kepler Cheuvreux analyst Jon Cox said he estimated the size of the second-hand market at around $5 billion a year in revenue, including watches sold at auction, and that it had outperformed the market for new pieces in the last couple of years.
That is still dwarfed by a new luxury watch sector worth €37 billion, according to consultancy Bain & Cie. However Swiss watch exports fell 3.3 percent in 2015 and 9.9 percent in 2016 before posting a modest 2.8 percent rise in the first 11 months of 2017.
The US, where sales of new watches have been falling for years, is the number one market for pre-owned watches, followed by Britain and Japan, said US retailer Danny Govberg, who sells new watches for Rolex and other brands, but also an increasing number of second-hand timepieces. His company said its second-hand sales had grown by 37-40 percent year-on-year over the past five years. In an example of prices, it said it listed a second-hand Audemars Piguet Royal Oak for $24,950 compared with a $32,000 retail price.
Together with a partner in Hong Kong and a Singapore-based investor, Govberg recently launched global e-commerce platform WatchBox for buying and selling pre-owned luxury watches.
“People sell us watches by the bucket,” he said.
He said many people sold watches to buy a new one so the pre-owned market was actually driving new sales, like in the car market. “The brands are still trying to figure it out, they don’t have the solution yet,” he said.
Audemars Piguet’s Bennahmias said watchmakers had to amend business models to deal with changing consumer habits.
“We’re witnessing a social and cultural change that forces us to think about what the business will look like in five or 10 years,” he added. “Time flies, we need to watch out.”
Gigi Hadid visits Rohingya refugee camps
- American-Palestinian supermodel Gigi Hadid is visiting Bangladesh to meet Rohingya Muslim refugees
- Hadid visited the Jamtoli Refugee Camp in Cox’s Bazar on Friday
JEDDAH: American-Palestinian supermodel Gigi Hadid is visiting Bangladesh to meet Rohingya Muslim refugees. The 23-year-old model is documenting her work with the United Nations Children’s Fund (UNICEF) in Bangladesh on social media.
Hadid visited the Jamtoli Refugee Camp in Cox’s Bazar on Friday, where she met with Rohingya refugee children.
“En route to the Jamtoli Refugee Camp, Cox’s Bazar, Bangladesh,” she wrote on Instagram. “As well as providing for the Rohingya refugees, UNICEF supports the host communities in need, including an estimated 28,000 people given access to better sanitation and safe water through the WASH Program, and 53,000 locals have been supported in educational activities.”
She shared several images of children at the camp, detailing the conditions they live in and UNICEF’s work in the area. “Across all the camps, 1.3 million people currently require humanitarian assistance; more than half of them are children,” Hadid wrote.
Hadid visited a “women/girl-friendly” zone, where they get a basic education and learn skills such as sewing. “We spoke about their personal stories and hardships, what they enjoy and benefit from currently in the refugee camps, what they still need, and what they hope for their futures. Their strength, bravery and desire to learn and better their lives and the lives of their children is inspiring and encourages us @unicefusa to continue to find new ways to support these amazing human beings during this crisis,” she wrote.
The cause of the refugees is one that is close to Hadid’s heart. Her father, Mohamed Hadid, came to the United States as a refugee before he became a billionaire real estate developer. In January, Hadid and her younger sister, Bella, protested US President Donald Trump’s travel ban targeting some Muslim-majority countries.
On Saturday, Hadid visited UNICEF’s child-friendly space in Camp 9 of the Kutupalong Balukhali Refugee Camp. The purpose of the camp, Hadid said, is to “let kids be kids.”
“As well as psychosocial work to help them get through trauma through activities like art, they also can play sports, learn music, and learn to read and draw (some for the first time in their lives). Separate from educational spaces, the importance of these spaces is huge due to the fact that refugee children can spend a majority of the day working, usually collecting firewood from miles away so their families can cook, taking care of siblings, helping around the house etc., and here they can just focus on having fun,” she wrote.
The model also visited the UNICEF Learning Center in the Shamlapur Refugee Camp in Cox’s Bazar.