GENEVA — Are watches a good investment?
“Absolutely not,” John Reardon said during an interview in November. But in late December he still introduced an online business focused exclusively on trading secondhand Patek Philippe watches and accessories.
Mr. Reardon, 45, knows something about the value of watches. He was international head of watches at Christie’s in New York, where for six years he oversaw about $100 million a year in watch sales, until he left in August to begin working on his new site. He previously worked in Sotheby’s watch department for two years and, from 2001 to 2010, was in sales at Patek Philippe.
“If you are buying a watch to make money, then hold on for the ride, because the odds are not in your favor,” Mr. Reardon said. “Only collectors who buy what they know and love do well in the long run.”
In November, Mr. Reardon was in Geneva helping with Christie’s fall watch sales as a senior international consultant, an independent contractor role he plans to maintain. Shortly after the interview, he was taking telephone bids at the Only Watch charity auction when a Patek Philippe Grandmaster Chime wristwatch sold for $31 million, making it the most expensive wristwatch ever auctioned. (It displaced the Paul Newman Rolex Daytona that sold for $17.8 million in 2017.)
Mr. Reardon said he was as stunned as everyone else in the room when the hammer came down.
“It was an emotional moment when Patek became king again,” he said. “But the sale just confirmed my belief that I was betting on the right horse.”
Collectability, his online site, will buy and sell watches, and also promises what it calls “an education in Patek Philippe” through articles about specific references and question-and-answer pieces with high-profile collectors like the British musical star Ed Sheeran. And its fledgling Instagram account — #collectabilityllc — is where Mr. Reardon has begun engaging with the 20 and 30 year olds who are his target audience.
“The idea of Collectability was born many years ago,” Mr. Reardon said. “I always dreamed of having my own business focusing on my passion, Patek Philippe. I didn’t want to go into the retail world because one is limited by the supply given by brands. And I didn’t want to spend the rest of my life in the auction world, because as a family man, it is difficult to travel all the time.”
Collectability operates out of a restored 19th-century firehouse, a property in New Jersey that Mr. Reardon is renting. It already has an inventory of about 100 secondhand timepieces, 25 percent of which are pocket watches.
“I can post a watch on Instagram, and without soliciting offers, people are offering to buy it,” Mr. Reardon said. “If you are a trusted watch source, you don’t need a store on Fifth Avenue.”
“If you bring me a watch, I will tell you all the existing scholarship about it,” he said. “I could write you a check, or advise you on the best auction route and your estimation strategy. I’m happy to have those conversations. I love this stuff.”
While the market for pre-owned Patek Philippes is red hot today, competition also is fierce with resale sites like Chrono24 and WatchBox vying for a piece of a market estimated in late 2018 to be worth $16 billion annually, according to Jon Cox, an analyst at the financial services company Kepler Cheuvreux.
“Based on global sales in the last 18 years,” the WatchBox co-founder Danny Govberg said, “we estimate that there is close to $500 billion in watches sitting in people’s drawers, with an additional $50 billion in new watches entering the market each year. Our annual sales are now $200 million, and our goal is to grow sales to $500 million in the next three to five years.”
Even Richemont, the Swiss luxury conglomerate that owns brands like Cartier and Piaget, entered the field in 2018, buying Watchfinder & Company, a British trader said to be that country’s largest seller of secondhand timepieces.
For all these businesses, finding quality watches in perfect condition for resale drives their profits.
“Original-owner goods are hard to find out there,” Jeff Harris, a watch dealer based in Los Angeles, said in a telephone interview. “Dealers make money on mint condition watches, but depending on the market, they can lose money on the average, recirculated, pre-owned.”
Mr. Reardon has been gathering his inventory from contacts made during his two decades in the watch business. And he said he believed there was more stock still available than many assumed was out there. “Up until the 1960s, half of Patek Philippe’s output went to America through the Patek USA distributorship,” Mr. Reardon said. “We know what’s out there, it’s a question of finding it.”
While wristwatches generally get most of the resale attention, “I have been predicting that the pocket watch market would ignite for some 20 years now,” Mr. Reardon said. “It has not happened yet, but I’m out there buying them like there is no tomorrow.” (One vintage pocket watch did rather well in 2014 when Sotheby’s sold the Patek Philippe Henry Graves Supercomplication for $24 million.)
Mr. Reardon is also betting that Patek Philippe’s clocks are undervalued and is bullish about the Ellipse line of wristwatches as what he described as “an alternative to the Nautilus,” the company’s highly prized series.
In his new business, Mr. Reardon intends to capitalize on the knowledge has acquired from his own research into Patek Philippe’s history and from a decade of working for the brand. He has close ties to the family-owned company — he writes the Collector’s Guide column for its international magazine and is the author in 2008 of “Patek Philippe in America: Marketing the World’s Foremost Watch” and of two collectors’ guides — but he said it had no financial interest in Collectability.
Despite his realistic view of watches as investment fodder, Mr. Reardon does have a lot of faith in the future of the secondhand business. “I believe that pricing for vintage watches will reach levels not imaginable today,” he said. “But I am only about four months into this, let’s speak again in a few years.”
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