John Reardon, Christie’s senior vice president and international head of watches, has spent over 20 years in the prestige watch industry, including senior roles at Sotheby’s, Patek Philippe and Tiffany & Co. His time has coincided with a period of dramatic change for the auction houses as they face competition from mushrooming pre-owned platforms such as Chrono24, Watchfinder and eBay. From being the only game in town for people trading top end timepieces 50 years ago, the auction houses are now minnows in a market worth, in Mr Reardon’s opinion, $8 billion per year. Exclusivity may suit these venerable institutions, but Christie’s has other ideas and wants to take the fight back to the upstarts as WatchPro’s editor Rob Corder discovered in this broad-reaching conversation.
WatchPro: The secondary market for prestige watches is exploding in scale, sophistication and awareness. How is Christie’s keeping pace?
John Reardon: Four years ago it was a vision of mine and the wider Christie’s team to go digital-only with a small portion of our business. Pure online auctions represents less than 1% of what we do, but it is also our most global platform in many ways.
Right now we have a sale going on of 220 watches. Every other month we have online sales of important watches. These are completely separate from our private sale business and our traditional live auction business, which is still the core of what we do.
The biggest and most pleasant surprise with our online auctions is when we look at who the buyers are. We look through the people that win the auctions and the under-bidders and they are not people that we already know. They are new to us. If I go to a regular auction room, we know everybody there.
The other thing that is new and a wonder is that women are buying online. If you go to watch auctions, you just do not see women bidding and buying, so it feels like these online auctions are opening up our business to a completely new half of the world.
WatchPro: Was Christie’s an early adopter of digital?
John Reardon: Compared to the other major auction houses, we were one of the first to embrace online sales. I was at Sotheby’s in the late 1990s when we were working with Jeff Bezos at Amazon.com. Nobody talks about that; it is all forgotten. The lesson learned back then was that it was too early to expect people to put $5,000, $10,000, $15,000 on a credit card to buy a watch online. Now that has changed, it happens all the time. We are selling watches for hundreds of thousands and people love paying by credit card. It is a fair and transparent process with no borders.
The bidding is so exciting because, just like a live auction, we show where the bidding is coming from online and it is pinging back and forth between countries all over the world. It is unpredictable. If you asked me to say where the top 10 lots would go to in any auction, I could not guess. In a live sale I would be able to guess quite accurately.
WatchPro: Tell me about the impact of star watches like last year’s Paul Newman-owned Rolex Daytona at Phillips?
John Reardon: That has always been part of the industry, but the importance of provenance is relatively new. I remember people became more aware of the importance of provenance around a Sotheby’s auction of a [faux] pearl necklace owned by Jackie Kennedy that sold for an extraordinary amount of money (over $70,000 was paid at auction in 2010 for the fake pearl necklace worth no more than $200 new). That sale grew an awareness of the importance of provenance and what it can do to prices.
We have had examples at Christie’s as well. The Patek Philippe 2497 owned by Haile Selassie [which sold for CHF 2.9 million in 2017] brought a ton of attention. But, at the end of the day the watch would have been worth the same with or without the Haile Selassie connection.
The Paul Newman-owned Paul Newman Rolex Daytona was different. That watch was worth $200,000, period. The fact that it brought over $17 million was clearly about provenance. The whole world was excited to see that result. That type of piece, and there are very few that could generate that level of interest, need to be sold at auction because you need a show around it. You need competition around it.
We sold Jackie Kennedy’s Cartier Tank a few years ago. The watch, itself, was worth $3000 but it brought $500,000 because it was Jackie Kennedy’s, and that is what brings the emotion.
WatchPro: Is it part of your job to scour the world for these pieces and compete to secure them for Christie’s?
John Reardon: I look at my job, and we have a team of 30 people on the watch side here at Christie’s, as being a great curator. We make friends with the collectors over decades. We talk watches, share ideas, and discuss trends. Within that network of course we will of course get consignments. But we are also treasure hunters, and that is a very exciting part of our jobs.
We are also digital treasure hunters. I have not managed to check my e-mail for the past four hours and it is driving me nuts because I know there are going to be leads on my phone that we need to jump on. Every day around the world there are fresh leads and one in ten is exciting; one in a hundred is exceptional; and one in a thousand is something that keeps us up at night.
One of the reasons I travel so much is that a piece might surface anywhere in the world and I will literally jump on the next plane to go and see it. We are running after pieces, our competitors are doing the same, and it is a truly global race.
WatchPro: I have heard it said that some of these pieces are so expensive to secure and require so much marketing that the auction house loses money on them and they are really like loss-leader bait for the rest of the auction. Is that true?
John Reardon: It can be like that, but within Christie’s business model I can assure you it will not be like that. It is a very competitive world, but at the end of the day our purpose at Christie’s is to work for our clients. We don’t work for free, there are commissions involved, but that is money is spent well. If you think about the travelling around the world we do to find these pieces, the research we do, the authentication, and ultimately making sure that the right buyers are brought together who will compete to buy the watches.
It is a common question we get: should I put this watch on a certain online auction site, or should I go with Christie’s. At the end of day, if it goes onto an online auction site, a dealer is going to buy it and might re-consign it. We are the people who ultimately get to end consumers. Dealers may compete to buy pieces at our auctions, but they are often not the winners. Also, when it comes to sourcing pieces for auction, I feel very strongly that we source from individuals, not from the trade. In the past, I have worked at places that are very trade-driven, but I love pieces from original families.
WatchPro: The whole world of pre-owned and vintage has transformed recently. Even the venerable Swiss watchmakers are beginning to look at what it means to their business. What is your view of how the secondary market is affecting the whole luxury watch trade?
John Reardon: Ten years ago, when I worked at Patek Philippe, I asked a certain executive what brand he was most concerned about. His answer surprised me. He said he was not concerned about other brands competing with Patek Philippe, he said he was concerned about vintage and pre-owned Patek Philippe competing with new models. He predicted ten years ago what we are seeing today.
Companies like Chrono24 have raised awareness, and everybody is checking the site for prices. Those prices mean nothing, but the way, they are just ask prices. Nobody knows what deals are actually being consummated so it is not particularly useful information except to know what is out there.
If I worked for a watch brand, I would be monitoring that very closely because I would want to know how many of a particular watch with a particular dial are being offered on the market. I would not be so focused on prices, because they do not mean much, but knowing who is selling what.
It is very interesting what is happening online. It has certainly increased transparency, but sometimes things are not as they appear to be.
WatchPro: Trust and authentication seems to be the big question that needs to be addressed.
John Reardon: I think we are going into an era of certified pre-owned from the brands. Brands will buy back their own pieces; restore them, finish them. Vacheron Constantin has been doing that. MB&F has just announced a program going into that. AP is looking at it. It makes sense for some companies. But there is a limited amount of qualified watchmaking resources. Some brands would be best off keeping their highly skilled watchmakers focused on making new watches rather than diverting such a scarce resource towards restoring watches for the certified pre-owned market.
Right now I do not think that the brands necessarily want to compete with the secondary market. I would say that many of them realize that the secondary market has to find a way to work in harmony with the retail market because they are both parts of the same machine.
WatchPro: Do you think Christie’s will drive into the volume end of the pre-owned market where a lot of money is being made in flipping new and nearly new steel Daytonas, GMTs, Nautiluses?
John Reardon: I spend more time saying no to what could go into our auctions than saying yes. There are certain modern pieces that I know would upset the brands if we put them into our auctions. It is also the case that our clients want to sell watches, and it is our job to help them. We have different ways of selling, notably private sales that allow people to sell their watches without risking their relationships with the brands. Nobody hears about these sales, but they are one of the fastest-growing parts of our business because some people do not want to go down the auction route. They just want a fixed price and be done with it.
WatchPro: I was speaking to Kim-Eva Wempe, CEO of Wempe, today and she was saying how careful they are to sell watches like Pateks to people who they know will own them and love them, rather than flipping them. Is that what you are talking about?
John Reardon: In a way, yes. I am very protective of who we sell to via our private sales, particularly when we are talking about important pieces. You want them to go to somebody that will properly take care of them. With auctions I have no control whatsoever, but with private sales it is usually between buyers and sellers that we already know.
WatchPro: Ten years ago I assume you would have described your competitors as Sotheby’s Phillips and Bonhams, but do you increasingly think of eBay and Chrono24 as competition?
John Reardon: Today, competition is relative. If you take all the major auction houses: Christie’s, Sotheby’s Bonhams, Phillips, Antiquorum, Heritage Auctions, the big Chinese players; if you take all of them together, we sell watches worth only $350 million per year. That is rather sad compared to the $8 billion annual market that we are part of [for pre-owned and vintage watches].
I look at it not so much as market share between auction houses, but at how we can grow our three businesses: online, private sale and live auction. I want to understand how we can engage with the public and encourage them to trust us — we are not going to try to force them to sell.
WatchPro: Given your experience at more than one auction house and with working for Patek Philippe, what do you think the brands make of the incredible prices that are being paid right now for key models? Staggering prices on the secondary market must be fueling demand for new watches.
John Reardon: Many watch company owners and members of the top brass at the Swiss watch brands will have one opinion in private and another one for public consumption. Privately, they are fascinated by it. They are watching it like the rest of us watch the World Cup. Every pound, dollar and cent spent on watches is fascinating to them because these watches are their babies, they want to see what is happening to them. Publicly, they want people to buy from their authorized retailers. They do not want them buying from auction houses or the secondary market.
WatchPro: It is fascinating that Patek Philippe ten years ago was already thinking along the lines of certified pre-owned. Managed properly, it seems like an incredible opportunity for authorized dealers to sell the same watch many times over if they keep in touch with its various owners over a lifetime, just as authorized car dealers do today.
John Reardon: If I was a brand, this is such a no-brainer. They should buy their own watches at auction. You would be supporting your own market and building interest as you are bidding against collectors. You would build your own inventory of vintage pieces; restoring them and certifying them. You use those pieces as sales tools within your own authorized dealer networks. Imagine customers walking into a showroom and seeing a working watch from 1878. It is such an important way to tell a story. Those that embrace that philosophy have a winner strategy.
WatchPro: It is my understanding that certain brands are doing that already.
John Reardon: Yes, there are about four brands that do it, but it should be more and I expect it to be more.
WatchPro: Is the rumor true that Rolex bought the Paul Newman-owned Paul Newman for $17 million last year?
John Reardon: I can’t comment on competitors.