INTERNATIONAL. Swiss luxury group Richemont is entering the burgeoning pre-owned watches market, following an agreement to acquire 100% of Watchfinder.co.uk Limited.
Announcing the deal yesterday, Richemont described Watchfinder as the leading pre-owned premium watch specialist. The privately held company was established in 2002. It has grown organically under the stewardship of co-founder Stuart Hennell to become the leading platform to research, buy and sell premium pre-owned watches, both online and through its seven boutiques, Richemont said.
Watchfinder operates a customer service centre and has around 200 employees worldwide.
“Together with Yoox Net-a-Porter and our stake in Dufry, the acquisition of Watchfinder is another step in Richemont’s strategy. It will enable us to better serve the sophisticated needs of a discerning clientele.” – Richemont Chairman Johann Rupert
Richemont Chairman Johann Rupert said, ““Sixteen years ago, Watchfinder’s founders foresaw the need for an online marketplace for premium pre-owned timepieces. Watch enthusiasts themselves, they established Watchfinder to provide excellence in customer experience. We believe there are substantial opportunities to help grow the company further. Today, Watchfinder operates both as an ‘online’ and ‘offline’ business in a complementary, growing, and still relatively unstructured segment of the industry.”
In a key observation, Rupert added, “Together with Yoox Net-a-Porter [a takeover clinched one week earlier -Ed] and our stake in Dufry [5% acquired in 2017, later increased to 7.5%], the acquisition of Watchfinder is another step in Richemont’s strategy. It will enable us to better serve the sophisticated needs of a discerning clientele.”
Commenting on the group’s latest acquisition, Rupert said, “Sixteen years ago, Watchfinder’s founders foresaw the need for an online marketplace for premium pre-owned timepieces. Watch enthusiasts themselves, they established Watchfinder to provide excellence in customer experience.
The transaction is expected to close in the summer.
“Richemont is firmly placing its chips on what it believes will be the lucky numbers of the retail roulette wheel of the future.
“A Dufry-run, pre-owned watches store with a strong online offer at an airport? DFS Group adding a pre-owned watches component to its acclaimed Masters of Time Exhibition? Imagine what a compelling new dimension that would add to the DFS watch team’s annual curation. In the fast-changing retail landscape of the 21st century, count nothing out.” – Martin Moodie
MARTIN MOODIE COMMENT: What an intriguing acquisition this is from the owner of such venerable watch brands as A. Lange & Söhne, Baume & Mercier, IWC Schaffhausen, Jaeger-LeCoultre, Montblanc Officine Panerai, Piaget, Roger Dubuis and Vacheron Constantin.
Along with its ultra-premium peers, the company has been monitoring (and been increasingly concerned by) the booming pre-owned timepieces market. In a February article titled ‘Trade In a Luxury Watch Like a BMW: It’s a Booming Business’, Bloomberg noted, “Swiss watchmakers have traditionally viewed the pre-owned market as competition; as the thinking goes, the only watch that can supplant a new Rolex in the shopping cart of a brand-devoted shopper is a vintage Rolex.
“But Switzerland has started to embrace the resale movement, hoping to lure shoppers back to stores by any means possible, says Reginald Brack, a watch and luxury analyst at market researcher NPD Group. Brands are looking to make up for the sales that the industry—a four-century-old backbone of Swiss’s luxury export portfolio—has lost since the rise of smartwatches and the corruption crackdown in China led to a multiyear slump. ”
“You can buy used cars with guarantee — you can’t buy a pre-owned watch in a structured way today in the industry, which is weird.” – Breitling CEO Georges Kern
The news agency quoted Audemars Piguet Chief Executive Officer François-Henry Bennahmias’ estimate that the pre-owned business could be 10 to 20 times the size of the market for new watches. The company planned to open standalone stores to buy and sell second-hand timepieces, Bennahmias said.
Breitling CEO Georges Kern told Bloomberg, “You can buy used cars with a guarantee—you can’t buy a pre-owned watch in a structured way today in the industry, which is weird.”
But that’s all changing as the grand marques of the watch industry swoop to simultaneously control and grow the pre-owned sector. The market is worth an estimated US$5 billion globally and is growing at around +5% each year, according to specialist watches media FHH Journal.
With its acquisitions of a sizeable stake in the world’s leading travel retailer; control of e-commerce site Yoox-Net-a-Porter; and now a pre-owned luxury watches company, Richemont is firmly placing its chips on what it believes will be the lucky numbers of the retail roulette wheel of the future.
A Dufry-run, pre-owned watches store with a strong online offer at an airport? DFS Group adding a pre-owned watches segment to its acclaimed Masters of Time Exhibition? Imagine what a compelling new dimension that would add to the DFS watch team’s annual curation. In the fast-changing retail landscape of the 21st century, count nothing out.
ON THE MOODIE DAVITT RADAR
The FHH Watchmaking Trends Report 2018 describes the second-hand market as a millennials’ playground, citing ‘Changing mentalities – buying pre-owned luxury goods is no longer taboo – and new consumption habits that favour experience over ownership.’ – FHH Journal
Luxury brands have long shunned the second-hand market for premium watches and other luxury goods because of fears that these businesses would impact sales of their products. But several are now looking to break into it, pressured by a sluggish primary market and because they are wary of ceding too much ground to third-parties. – Business of Fashion
Compared to other luxury firms, including high-end clothing and handbag makers, watchmakers might have more to lose by not getting involved, analysts at Berenberg said in a report earlier this year. They cited the greater average markdowns on the price of timepieces compared to other items in the second-hand market, giving watchmakers an incentive to take more control over this business. – Reuters
