Limited Edition Watches – Really?
We are back with our regular piece from the Watch Whisperer (TWW) and looking at limited edition watches, watch production numbers and the watch collector’s search for their “grail.” We had an interlude for the market report from the amazing auction in New York last December. Our analysis of the illuminating results is that this particular auction will continue to influence the watch market for years to come.
Our friendly gentleman watch collector continues to provide us with a front-row seat on his journey through the world of watch collecting. It is a privilege to be able to receive his insight and understanding.
In this third installment of an extended conversation with TWW, we explore the impact of watch production numbers on his buying decisions and explore the different choices he makes when considering watches of the 1970s and 1980s and modern watches. Finally, he introduces us to “the grail,” that watch that all watch collectors strive to find and acquire. What defines it, and has he ever found his grail?
If you have missed any of these interviews, I recommend you look at the past editions, there is plenty to learn, and you can see all of them here.
Let’s get into it.
Watch Production Numbers – What Is Their Impact
SDM
Productions numbers seem to be key for a watch collector. Do you track the production numbers of modern watch releases? Also, how do these compare to the numbers of watches released in the seventies, for example?
TWW
I have absolutely no idea what the current production numbers for watches are. In general, brands do not limit numbers; their incentive is to make as many watches as possible. All the brands, Tag Heuer, Panerai, or whoever, will often come out with limited edition pieces, but the number produced is often determined by how many pieces they can sell.
Modern Limited Edition Watches – Really?
You can see this in action in the market if a limited run of a thousand or 2000 watches sells out, then a slight iteration will be released soon after the previous limited release has been sold. This new release will have a limited run of another one or two thousand very similar watches. The way I see it, you have to take this trend for modern collectible limited edition watches with a little bit of a pinch of salt. This is all very similar to what I see happening in the car world too.
In The 1970s, All Good Watches Were Limited Edition Watches.
So if we go back and look at what was happening back in the 1970s and the “original” collectible watches. Production numbers were not huge in the 1970s; this was especially so for a watchmaker like Heuer because many Swiss watch companies struggled with the quartz crisis. The general consensus amongst the watch brands was that it was possibly the end of the mechanical watch business.
Many brands were trying to work out if they could make quartz watches and still make a living and determine how they could move forward. Most brands, whether it was Rolex or Heuer, all dabbled in quartz watches at that time. It took a decade or so for people to realize that even though a quartz watch is more accurate and tells the time better, this is not the point of a wristwatch. In the same way that you could buy a modern car with all the electronics in the world, it will allow you to be faster and faster around a racetrack, but this will sanitize the experience of owning and driving the car.
This is seen in the watch world too. Many of us appreciate the great brands and the incredible engineering and design that goes into creating these micromechanical marvels. Thankfully we are not all wearing quartz watches or Apple watches. Many people, a lot of watch collectors I know, do wear an Apple watch on one wrist and a mechanical timepiece on the other wrist. My personal perspective is that beautiful mechanical watches are not primarily about telling the time.
If It Is Limited Enough, Is It Collectible?
SDM
When you look at a watch you are considering to purchase, and there were only ten pieces available in the world, would this make it more attractive for you as an investment?
TWW
This would not be sufficient by itself, but it would be a positive aspect for a watch that I already had an interest in. It would certainly be very positive for the value of the watch. This is probably true for any market where it is driven predominantly by collectors. The desire to have something special and rare is compelling because it is interesting to talk to other people. This is a key aspect of collecting; it is the fun of sharing the passion.
In the background, there is most likely a degree of one-upmanship for everybody. The desire to have something outstanding and incredibly rare is attractive, and for a collector, there is always going to be a little desire to show off. This is not different from anything else, even though most people do not like to admit it. I think it is just fantastic to find something that can be enjoyed as a group. Watch collectors call them “grails,” a specific watch that is unobtainable, that watch that they all aspire to own. The gating item is certainly not that the collectors do not have the money to purchase them. That never seems to be the issue in my experience. It is just a question of finding the right piece at the right time.
If It Is Rare, Then It Can Be A “Grail”
SDM
How do you go about finding one of these pieces – a grail?
TWW
The internet is an excellent source because most dealers, most traders, and all the auction houses publish catalogs and published pieces online. Specialist forums have a vast network of collectors that are genuinely global network. My network is quite large now, so if I wanted to sell a specific, rare watch, I would not advertise it or put it in an auction. I would merely send an email or WhatsApp out to the people I know who are interested in that specific piece.
Although the watch auction market is vast, and you can be mesmerized by the big numbers that some watches trade for, it appears that for the older collectible watches, a lot of transactions are going on behind the scenes. I will often sell watches directly because people want to own the watches I have found because of the watch’s story. I have also bought many watches that way too. The vast majority of the watches I buy are from a direct transaction from somebody I know throughout my network. Occasionally, I buy at auction, but you need to be lucky to get something of value. Usually, when a watch is at auction, it is promoted very well these days, so many buyers are attracted. It is quite hard to find value at auctions unless you are fortunate on the day.
There Is Value In A Modern Classic
SDM
What is the last watch you purchased for your collection?
TWW
One of the most recent watches I purchased was, funnily enough, a modern watch, but it is a modern issue of what I consider a classic. It is a particular stand out in my collection as it is one of the few watches in my collection that is not a chronograph. The Audemars Piguet Royal Oak, a very standard 15202 ST, a 39-millimeter stainless steel sports watch, is almost identical to the original design and compliments an original I also have in my collection. The original was designed by Gerald Genta, who also designed the Nautilus for Patek Philip, and was released in the very early seventies. I had been on a waiting list for a very long time to purchase one of these watches. It had even been a challenge to get on a waitlist for this watch because they are produced in such small numbers.
The Benefit Of A Modern Watch
The watch is lovely because it is mechanically a modern watch, but the design is identical in almost every respect to the original watch. It is interesting from an ownership proposition because it is a modern watch that I can wear every day. For example, I can go swimming in it without concern. Whereas many vintage watches, even vintage diving watches, I certainly do not want to take them into the water.
I have made that mistake in the past, and I can assure you that it was a costly mistake. Getting saltwater in a vintage dive watch is not a good idea, even if it does say waterproof to 200 meters on the dial. When I am buying a modern watch, I tend to gravitate towards reinterpretations of a vintage watch. Quite often, I will have the vintage version as well. Naturally, I still prefer the vintage version, but I like to wear it, and unless I am completely comfortable, I will prefer to wear the modern version. My view is that my watches are there to be worn and used. They are not to be tucked away in a safe, so I tend to wear all my watches and scratch them.
SDM
Adding your own authenticity to each watch?
TWW
Exactly. Adding my own bit of patina to them.
Limited Edition Watches – The Waiting List Challenge
SDM
Going back to the Audemar Piguet Royal Oak you purchased recently, how did you get on the waiting list for that watch?
TWW
I have been a watch collector for over 30 years, and over that time, I have cultivated a relationship with many of the authorized dealers or the importers, and that is how it works. If they know that you have been a collector for a long time, you tend to be offered rare pieces. I think that all the watch brands want to do that. They want to ensure that the watches go to valid collectors because there is a lot of money to be made on these watches. They are scarce in the market and therefore very sought after. A typical waiting time on the waiting list is two years to receive your watch. If you were successful in acquiring one through the waiting list, you could walk out the door of the boutique and walk into a second-hand watch dealer down the road and probably sell it for double immediately.
Watch Companies And Their Limited Editions
The watch companies are not stupid; they want to make sure that the people who buy their watches are not just blatant profiteers. The issue for them is that they fear they have sold their watches too cheap and losing money. The issue is that they have real customers who wish to buy and keep these limited edition watches. If all these customers see brand new watches in a second-hand watch dealer yet can not buy one from the authorized dealer, it damages their brand. It is important for the brands that their watches go to the right people, so it is difficult to get on a waiting list as a new customer for any of these rare editions. Of course, not every new customer will seek to sell their watch for an immediate profit. It is a bit of a shame, and it is something that watch brands struggled with in general.
It is definitely a complicated situation for the brands to manage, and I am unsure what the answer is. I have thought it would be a good idea to allocate watches to customers and hold back the certificates, which is an essential part of any watch, especially for a new watch. The certificate can be released to the customer twenty-four months later to make sure people are not just buying watches and flipping them.
Relationships Are Key
They now track each watch by their serial numbers; this way, the watch brands know exactly who owns each watch. Historically the watch brands did not do this, with many companies selling watches without registering the buyer. These days Patek Philip, Audemars Piguet, and the like will make sure they have all your information before allocating a watch to you. This way, if a watch does turn up at auction or at a watch dealer, the brand can track exactly who the original owner was, and most likely, they will not be allocated another watch in the short term.
Next Time
The last time I trailed the next installment, I was wrong! With several classic watch auctions coming on the calendar over the next few weeks, we may receive a heads up for some interesting action. So if you do not want to miss anything, please sign up for our newsletter, and you can be assured that you will get the latest in the world of watch collecting as soon as it is released
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We look forward to seeing you the next time.
