Walk into Watchbox‘s first showroom, opened in Dubai last month in partnership with the Middle Eastern watch retailer Ahmed Seddiqi & Sons, and you’re presented with a wall of watches, many of which are as rare as a Trumpian climbdown.
In one case, wrapped in a bronze frame, a smorgasbord of Patek Philippe’s Nautilus—in steel. In another, set in the shadows of the walnut louvers that decorate the walls, a rainbow of Rolex GMT-Master II’s. For all but an elite few, getting hands on any of these through any other retailer, anywhere in the world, is all but impossible at the moment. They won’t even have them in the window. And yet here these watches are. For sale. Now.
By creating a source for these so-called unicorn watches, WatchBox (which was established in 2017 with a $100 million cash injection from a Singaporean investor), has become a pre-owned leader. It claims this year it will turnover more than £150 million. Analysts calculate the secondary luxury watch market will be worth around £12.1 billion this year—just under a third of the primary market—and rising. This is a serious business.
And it’s put the watch industry on a war footing. Last week, WatchPro reported that Richemont would pull its brands out of WatchBox’s sister company, the US jeweller Govberg, in 2020. Why? Because the luxury conglomerate Richemont, whose portfolio includes Cartier, Panerai and IWC, bought WatchBox’s major competitor WatchFinder in 2018. Even seasoned watch industry observers will struggle to remember a shot across the bow fired with such intensity.
Back in the plush 1,650-square-foot store (which includes a large VIP area behind a huge floor-to-ceiling door), the room is peppered with touchscreens that serve as an inventory search engine. WatchBox says around 270 of the 4,000 watches it has inventory worth around £60 million that are on display at any one time. If you can’t find the watch you’re looking for, you can search for it using the touchscreens and reserve or buy it there and then. And if it’s not on the system, you can request it. WatchBox says that barring the obscure, it’ll find whatever you’re searching for in a few weeks, often days.
The day I visit the Dubai store, I’m told WatchBox has 13 Patek Philippe Nautilus Ref. 5711s in stock and 30 of Rolex’s so-called ‘Batman’—a version of the GMT-Master II with a black-and-blue bezel. These are two of the most in-demand watches in the world. I’m also told they have around £3.8 million worth of watches made by the increasingly collectible independent watchmaker F.P. Journe. They own every watch they sell, they say.
None of this comes cheap, though. As a rule of thumb, the harder a watch is to come by new, the higher the premium you’ll pay for a pre-owned model. At the time of writing, WatchBox was selling pre-owned 2019 Batmans for around £11,000. The list price is $9,250, , or around £7,000.
Believe it or not, that’s not bad compared to what else is out there on the secondary market at the moment. Either way, it’s creating a market for ‘flippers’ who buy new and then sell on to make a quick buck—an uncomfortable situation for the brands involved.
As with its competitors, WatchBox’s model appears to depend on four things. First, access to product, both those in-demand pieces and pre-owned watches made available at a discounted price compared to new. Second, a vast online inventory supported by a global network of watchmakers, valuation professionals and clients looking to buy, sell and trade. Third, authenticity; WatchBox says customers won’t be able to spot the difference between new and old and offers a two-year warranty on every watch it sells. And finally, growing consumer knowledge. People are starting to understand they can release the equity in their existing collection by selling or trading it via a specialist pre-owned retailer.
At first glance, WatchBox’s Dubai store is just another luxury watch showroom. But as Richemont’s announcement shows, scratch the surface and it soon becomes clear it’s more than that. Much more.