A scandal, one mistake after the another, and a futile lawsuit soured the scene on the pre-owned watch market towards the end of last year, which had promised to be a record year across practically all parameters.

At the beginning of 2023, the pre-owned watch market led by three major auction houses was in great shape. Against a backdrop of rising food and energy prices due to the ongoing conflicts in Eastern Europe and the Middle East, everything that slowed the global economy fueled the trade of pre-owned watches.

Even inflation forced investors to continue to look for new ways to save money. Luxury watches in particular have proven themselves to be one of the most profitable investments. Moreover, these are more than just profitable investments, they're also beautiful, prestigious, and trendy.

The fact that manufacturers increased prices for their products from five to fifteen percent over the course of the year had no small part to play in the hype for watches. Alas, last year was filled with a wealth of scandals too.

One saw prominent voices on social media suddenly begin to question the financial records of the Only Watch charity auction founded by Luc Pettavino, who appears in increasingly luxurious suits at these events.

Only around half of the funds raised by the sales were donated to medical research. None of those who raised doubts factored in all the costs involved in organizing, advertising, and promoting an auction, which includes a touring global exhibition on top of the services provided by the auction house.

In the end, Pettavino announced that the auction would be postponed until 2024 to allow time for a thorough financial audit of the Only Watch auction organized by the Association Monégasque contre les Myopathies (AMM), co-founded by Pettavino. 

One Mistake After the Another

The postponement of the auction, where every second lot was a true sensation, left the global community of collectors in a state of mourning for a brief period of time. And in an attempt to make up for the lack of profits from the postponed auction, Christie's auction house suddenly took a controversial decision.

They decided to insure the Passion for Time auction which was meant to take place after Only Watch on November 6 in Geneva by turning to a guarantor for help. Third-party guarantors are a group of independent experts who study an auction catalog and the estimates it gives to lots before providing their own revised estimates.

They then guarantee the organizers that they'll purchase a lot if it receives no bids over their minimum sales price. In effect, a third-party guarantor is a bidder at an auction who makes the first offer to purchase a lot for the lower bracket of their assigned estimate.

If the lot is ultimately sold for a higher price, the organizers of the auctions will pay the guarantor a cut of the profit. What's surprising in this case is that the contract with the third-party guarantor was signed just before the auctions.

The guarantor swiftly provided their own estimate for the lots (there were 113 of them, all from the same consignor — Omani businessman and collector Mohammed Zaman). The organizers had to revise the estimates at the last minute, and they were revised upwards.

The amended estimated sales prices had to be printed and distributed among the participants at the auctions when they were literally already in the room. As a result, the auctions were delayed by almost an hour.

If any of those in attendance had wanted to plunge straight into the deep end at this auction, the turmoil extinguished any desire they may have had. After all, the process of purchasing rare luxury watches brings a great physical, moral, and aesthetic pleasure for the majority of collectors. But they completely blew it here.

The resulting auctions raised a sum that fell significantly short of expectations, certainly lower than Mr. Zaman's expectations. Naturally in the heat of the moment, Zaman filed a lawsuit against Christie's to dispute the results, but he seems to have cooled off after giving it more thought.

Zaman reached a settlement with Christie's, and withdrew his claim. The details of the settlement he reached with the British auction house remain undisclosed: the collector's lawyer stated he had no intent of making any public comment. 

But many others were left unsatisfied: participants at the auctions shared screenshots of estimates which had changed before their own eyes, and collectively expressed their deep dissatisfaction online, which everyone remembers well.

One mistake has led to another, like a domino effect, first the auction, then the consignor, leaving a depressing impression on the pre-owned market. But none of these blows hit as hard as the Only Watch auction getting postponed. The effects can actually be seen in the results of the auctions that followed in November and December.

So, What About Only Watch?

By the way, what's happening with Only Watch? No new date has been set, not even a rough idea. Spring? Summer? Fall? The website states the obvious "as soon as". Model presentations have disappeared, although the Only Watch exhibits were brought to the Dubai Watch Week.

An individual source at this exhibition shed light on why images and descriptions of models donated by potential participants were taken down from the website for the postponed auctions, which Mr. Pettavino is absolutely certain will go ahead in 2024.

Organizers of the postponed auction allowed watch manufacturers to withdraw their models if required due to the circumstances. And that's what some of the manufacturers and independent watchmakers did.

You can understand why the elite micro-brands among them would do so: not everyone has enough spare cash and time at their disposal to wait and see how this story unfolds. This makes quite clear why Jean-Claude Biver's Catharsis was pulled — a minute repeater without any hands and an invisible tourbillon.

Not only would Biver sell this unique watch within a few months (Biver himself claims to have already sold it), he'd also have enough time to create a few new ones. We do believe Luc Pettavino, and hope just as much he does that the remarkable Only Watch auction will go ahead no matter what.

No Pressing, Please!

It's worth mentioning another phenomenon that shaped 2023 — one which also had a negative effect on collectors. Almost all collectors are quite decent, intelligent people, and they really don't like it when someone puts them under some kind of pressure.

No matter what kind of advertising or even psychological pressure Sotheby's and Christie's try to put on collectors to purchase watches by George Daniels and Roger Smith at clearly inflated prices, collectors don't buy it. 

No hype surrounding these models or loud titles like "Most Historically Important Pairing Ever" have helped. Models which fetched around EUR 5 million at the end of 2022 and the beginning of 2023 were ultimately sold for the lower bracket of their estimate (around EUR 1.6 and 0.8 million) by fall, and barely made it over half a million by December.

Sure, it wouldn't be right to compare unique pieces, the George Daniels Anniversary Watch, and Roger Smith Pocket Watch No. 2 with other series models by these watchmakers, even if they were released in tiny quantities, but it's not hard to see a pattern.

The exact same situation, i.e. not a very successful one, has unfolded with the heavily promoted LVMH brands Biver and Daniel Roth. That's why it's not a good idea to put pressure on collectors: they'll make their own evaluations, and acquire each piece on their own terms.

Predictions for 2024

So after the headaches and misunderstandings towards the end of last year, what can we expect from the pre-owned watch market in the new year? Well, nothing! Nothing, in the sense of nothing new.

The scandal and double domino mistakes will remain in collectors' minds for a long time, which is why they'll prefer to steer clear of any risks whatsoever in 2024.

And this means that the market and auctions will be totally dominated by perpetual values in the form of Patek Philippe Ref. 1518 and 2499, as well as repeaters and complicated watches by the same author, plus Rolex Daytona "John Player Special" watches referenced with numbers that begin with "62".

Oh, and of course watches by super-sought-after independent watchmakers: François-Paul Journe, Philippe Dufour, Kari Voutilainen, Richard Mille, and Rexhep Rexhepi. It goes without saying that prices for all the above will go up as a result. Overall, 2024 looks set to be a calm year, which makes it quite a favorable one for shaping decent collections.

Credits taken from: www.christies.com, www.phillips.com, www.sothebys.com, www.onlywatch.com, www.everywatch.com