03. time-business


Auctions: independent dominance explained

VINTAGEMANIA

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July 2018


Auctions: independent dominance explained

The most recent sales in Geneva have once again demonstrated the overwhelming supremacy of Rolex, Patek Philippe and Audemars Piguet. Why have collectors favoured these independent houses over time, ahead of historic rivals taken over by groups?

I

ndependent brand watches have long accounted for many of the standout auction results in the leading art market capitals.

What exactly are independent brands? Let’s use a simple definition. An independent brand is any brand that does not belong to a major watch group (Swatch Group, Richemont, LVMH, etc.) and has remained loyal to its fundamental values since its watchmaking beginnings. The winners, in descending order, are Rolex, Patek Philippe and Audemars Piguet.

In the most recent May sales in Geneva, Rolex and Patek Philippe captured the largest market share – almost two thirds of recorded results – moving far ahead of all major watch groups which now account for a tiny proportion of the watch auction sphere. And this is nothing new.

Auctions: independent dominance explained

Rolex is a ‘no-brainer’ for insiders

“The frontrunner of all the independent brands is Rolex – it’s a no-brainer,” said one savvy commentator from the independent watch world. This trivial phrase seems particularly apt in light of a detailed analysis of the latest auction sales in Geneva.

In this session, Rolex accounted for almost half of all sales. The combined share of Rolex and Patek Philippe accounts for almost two thirds of the auction market. However there has been a new development, with Rolex now by far the most sought-after independent brand at auctions.

While Patek Philippe retains its crown for the all-time watch record, for the famous Henry Graves, sold at auction for nearly 24 million francs in 2014 by Sotheby’s, Rolex has soared ahead in recent years, especially since the Daytona Paul Newman was auctioned off for 17.5 million dollars last year by Phillips.

The guru gospel

Of all the independent brands, Rolex has undoubtedly benefited the most from the power of social media in recent years. A relatively short time ago, collectors struggled to find information but, nowadays, a simple click will tell them almost anything they need to know online or on social networks.

The international watch collector ecosystem has collectively turned its attention to Rolex. The word of certain gurus has become key for many increasingly wealthy collectors. The proof is in the incredible prices recorded during the sale of the Daytona Ultimatum, superbly led by Aurel Bacs with the support of Pucci Papaleo, the ultimate name among enthusiasts since his first opus at Christie’s in 2013.

In under five years, the market has literally exploded. We racked up a total of more than 22 million francs for (just!) 32 watches during the latest Phillips sale, which netted an average of more than 700,000 CHF per lot. In comparison, during the first Christie’s Daytona Lesson One sale in 2013, around 100 watches were auctioned off for just over 10 million CHF. Thus, the May 2018 event at Phillips recorded an average seven times more per lot! For the past few years, the real vintage market barometer has been the Rolex Daytona, illustrated to perfection by the latest auction in Geneva. In addition to the themed Daytona Ultimatum sale, Sotheby’s and Antiquorum have both recorded some of their best results for a Rolex Daytona.

Auctions: independent dominance explained

Patek Philippe: harder and harder to come by

While it was game, set and match for Rolex during this Geneva session, we must not forget Patek Philippe’s long-standing key role in the collector’s world. It has unquestionably set more records than any other brand. However, the standout pieces are increasingly rare or even unavailable, detained within major collections. Though Patek Philippe has opened its doors to collectors, namely through its archives, it appears that the brand’s auction presence is less overwhelming than it once was. By our estimate, the brand accounted for just a quarter of results at the latest Geneva auctions. This has been an underlying trend for almost two years as the value of vintage steel Rolex watches soars.

A leading duo with diverging philosophies

For many years, these independent brands have set a frantic pace in the auction world, partly explained by the wide variety of models available. However their philosophies are different in every way. To summarise in just a few words, Patek Philippe embodies the ‘heirloom’ culture with its watch complications, while Rolex embodies the ’achievement’ culture with its sports watches, which have led the pack for more than 50 years (Submariner, Explorer, GMT Master, Daytona).

However, these two distinct brands do share a very strong identity and brand values, which remain the undisputed priority in the eyes of collectors. Thus, the presentation of the pieces in the sales catalogues is paired with increasingly meticulous and precise documentation. This has undoubtedly played a key role in the record prices recorded at auctions in recent years.

In the space of two years, the world wristwatch record has been beaten two years on the run. In 2016, it was at Philips in Geneva for a Patek Philippe Ref. 1518, which sold for 12.5 million CHF. The following year, it was in New York for Paul Newman’s famous Paul Newman Rolex. Both times, records were broken by steel watches!

Patek Philippe 1518 sold for 12.5 million CHF at a Phillips Bacs & Russo auction in Geneva
Patek Philippe 1518 sold for 12.5 million CHF at a Phillips Bacs & Russo auction in Geneva

Audemars Piguet: a rising outsider

While Patek Philippe and Rolex have formed a winning duo, Audemars Piguet, spearheaded by Francois- Henry Bennahmias, has caused a stir in recent years as an influential outsider. Its heritage marketing is a key factor in its success and remarkable on many levels. Its position in the latest watch sales rankings is the perfect illustration of this.

During the latest auctions at Phillips, Christie’s, Antiquorum and Sotheby’s, Audemars Piguet assembled some very high-quality vintage complication wristwatches in its Geneva store. This bolsters the strategy established by the brand to raise its profile among collectors.

Auctions: independent dominance explained

An independent spirit rewarded by collectors

How do things stand for other independent brands at auction? Some names clearly stand out from the crowd, such as Francois-Paul Journe, who often achieves very good results, not unlike his late mentor George Daniels, whose last records propelled independents to the very highest level. In their own way, they are highlighting another independent watchmaking value highly sought-after by collectors. Their influence is often the result of their founder’s character and their enterprising, uncompromising mindset. Independent brands have held on to this spirit in the auction firmament. They have done so through their storied past (Patek Philippe and Rolex), an extraordinary family history (Audemars Piguet), the genius of their designer (Francois-Paul Journe) and their entrepreneurial spirit. Independence is a quality recognised by collectors at auctions. Some visionary collectors, such as Philippe Stern, have built this watchmaking heritage where others have handed over their brand to major conglomerates and lost part of their soul... and their auction value!