Luxury watch seller Danny Govberg is very busy these days with his Philadelphia-based company, even when he’s selling fewer new timepieces than he used to.
That’s because his 102-year-old emporium, Govberg Jewelers, is seeing an explosion in the secondhand market, where the wealthy owners of expensive wristwatches such as Patek Philippe and Rolex are increasingly trading their used ones for a different (but not necessarily brand-new) style. It’s one of the biggest changes Govberg has seen in the industry’s market landscape in the past two decades.
Swiss watchmakers have traditionally viewed the preowned 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.
“It’s a changing world,” Brack says. “The brands themselves need to be smarter about how to sell their watches. They have to be innovative. Why not bring the customers in store? Maybe they find something new that they like, they didn’t know before.”
Who’s In?
One of the first big players to get into the game is Audemars Piguet, which plans to open standalone stores to buy and sell secondhand timepieces, according to Chief Executive Officer François-Henry Bennahmias. He estimates that the preowned business could be 10 to 20 times the size of the market for new watches. The company, which makes about 40,000 new timepieces annually, is also seeking more control over its products that are currently mostly resold by auction houses, independent local shops, and online platforms such as Amazon.com Inc. and EBay Inc.
Jean-Claude Biver, head of LVMH watch brands TAG Heuer, Hublot, and Zenith, has says he’s considering entering the market, too. Breitling is planning to buy and sell used watches starting in the middle of this year, mostly online through a website it will launch just for that purpose, says CEO Georges Kern.
“This is the innovation we want to bring to the market,” Kern says. “You can buy used cars with guarantee—you can’t buy a preowned watch in a structured way today in the industry, which is weird.”
“All of the groups are looking at how they are going to deal with it,” Govberg says. That includes Richemont, the parent company of such brands as IWC, Vacheron Constantin, and Piaget. “It’s no longer a hidden secret anymore. It has a life.”
A Broader Trend
The trend comes at a moment when global luxury fashion brands are focusing on their own archives to contend with online resale startups like TheRealReal.com and Grailed.com. To compete, and to share in the enthusiasm for vintage among shoppers, powerhouses ranging from the Gap to Gucci are rereleasing old designs.
Luxury brand Richard Mille is exploring the sale of secondhand watches in the Americas, the company said in an e-mail. John Simonian, CEO of Richard Mille Americas, also recently introduced a preowned service for Westime, a 31-year-old watch company he founded, because of customer demand.