Designer Watches as an Investment

There are many reasons to buy designer watches; most people do so because they either want to make a fashion statement, because they want a reliable, well-built timepiece or because they like fine jewelry, which many luxury timepieces are.  The reasons are really quite varied, perhaps as much so as the people who buy them.  Other people who buy designer watches are collectors, who simply enjoy watches, and investors, who seek to make money from their purchases.  That may seem odd; don’t investors put their money in gold or stocks?  Well, people invest in a lot of unusual things these days; lots of investors buy high quality wine for investment purposes and we’ve ever heard of a surprisingly large group of people who invest in limited-edition Lego sets.  Good business is where you find it, and if there’s something for sale today that someone thinks might be worth more money tomorrow, then you’re likely to find an investor who is willing to pay for it.

What sort of designer or luxury watches might investors want to buy?  That’s going to vary, based on the criteria of the individual buyer as well as the budget that he or she has to spend, but generally, there are a few things that stand out.

Rolex Yacht Master - steel and yellow goldReputable brands – In many cases, this means buying watches from long-established Swiss watchmakers, such as Panerai, Rolex, Patek Philippe or Cartier. There’s also interest in a few Japanese brands, such as Citizen and Seiko.  These names are well-known, and the more well known they are, the more likely that collectors will have interest in them.  There are smaller and newer companies that have made names for themselves with edgy designs or interesting features, and collectors have taken notice of some of these companies, such as U-Boat or Hublot.  As with any collectible commodity, the best-known names are the ones that collectors tend to seek, and correspondingly, the investors will be looking for those same brands to fill out their portfolio.

Limited editions – This may seem obvious, but collectors and investors are going to seek out those models that have limited availability, rather than those that have been continuously in production.  The Rolex Air King is a fine watch, but it’s been in production for seventy years with relatively little change.  As a result, you’ll pay no more for a vintage model as you will for a new one.  On the other hand, watchmakers such as Chopard, Bvlgari and Panerai have been known to produce models in extremely small quantities; sometimes they make fewer than ten examples of a given model.  This creates both scarcity and demand and as these models tend to get a lot of press, awareness among collectors is good.  These models, despite prices that are often rather steep, tend to sell out rather quickly and once they’re off the market, prices can increase dramatically.  Collectors and investors also like more obscure variations of regular production models; a watch made from stainless steel may not attract the eye of an investor but the same model with a gold case and diamonds on the bezel might be a different story.  Those models will necessarily be more scarce than their less expensive cousins and that’s where the appreciation can come in.


hublot skeletin tourbillon king goldComplications – Quartz models may be more convenient and may keep better time, but it’s the elaborate, mechanical models with multiple features, known as complications, that can really appeal to a collector.  There’s only so much room in a watch case for moving parts, and most watches take up all of that space with just the mechanism that keeps time.  If you add the date, the day of the week, phases of the moon, a stopwatch, a chime, a depth gauge, a tourbillon and a few other features, the watch suddenly becomes incredibly complex.  Some of these timepieces, known as either “grand complications” or “super complications” may have more than 1000 parts inside, and are true representations of the fine art of watchmaking. Due to their complexity, these models are generally very expensive and are often quite limited in production.  Watchmakers produce such models to show the world that they’re still “on top of their game” and capable of producing engineering magic.  The companies know that most people neither want or can afford such watches, but they remind the customer of the quality and precision that the company offers, and that the same people who make those items produce the rest of the company’s products.  Such timepieces may be loss leaders for the company, but they can make shrewd investments, due to the interest in them and their extremely limited numbers.

Patek Philippe Multiscale ChronographThose who want to invest in watches need to keep in mind that it could be years before they can be sold at a profit.  You don’t want to spend money that you cannot afford to spend, as it may be tied up for quite a while.  You need to have a cool, dry, safe place to store them, and if you’re investing in truly expensive models, that could be a problem.  It might not be too difficult to find a safe place to store a $5000 watch, but what if you have ten or twenty of them?  Then you have a problem on your hands, and you’ll need to have access to someplace that’s truly secure in which to store them.  Watches don’t take up a lot of space, but keep in mind that prospective buyers are also going to want the original box, paperwork, and any other materials that were included with the timepiece at the time of the original sale.  Collectors are generally willing to pay a lot more for a “complete” package consisting of the watch and it’s box and papers than they will for the timepiece alone.  All of these things need to be carefully stored and they do take up space.

Still, there’s a renewed interest in fancy, beautiful and elaborate timepieces, and the relatively recent trend towards mechanical complications, limited editions and the use of precious metals and gemstones has led to a resurgence in interest from both collectors and investors.  It’s a good time to buy, but before you start, make sure you’ve got both the money and the room.

 
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