Home IN MAG FEATURES

British CPO business Xupes expects to triple in size next year

0
Left to right: Rose Marnie-Sheppard, Reece Morgan, Joe McKenzie and Megan Young.

Xupes CEO Joe McKenzie took WATCHPRO’s Rob Corder on a tour of the company’s stylish thatched barn headquarters in rural England and let slip that the certified pre-owned luxury watch business has a secret plan to triple in size within the next year.

Over recent years I have visited most of the world’s biggest pre-owned watch operators in Europe and the United States, and they have all been impressive in their own ways.

And their properties also have surprisingly similar personalities to their founders and CEOs.

Advertisement

Watchfinder is about to move into a new all-singing-all-dancing headquarters and service centrer on a business park to the southeast of London, which will be a shame in some ways because the original location had a wonderful cloak and dagger feel as you climbed the stairs of what felt like a Soviet era tower block in which the KGB might once have hidden its safe houses.

Thick steel doors were the only clue that a battery of watchmakers were beavering away within, bringing battered and bruised Submariners back to mint condition.

Customers, of course, see Watchfinder online or in one of its many chic boutiques around the country but the no frills approach of its workshops was in tune with co-founders Stuart Hennell and Matt Bowling.

CHRONEXT is headquartered in Switzerland today, but I first saw the team at its original location in Hamburg, Germany, where its service center still resides.

It has a bit of its CEO Philipp Man’s personality to it: industrious and rigorous behind the scenes in the trading offices and workshop, but polished in the public-facing lounges where customers come to buy and sell watches.

CHRONEXT workshop.

Watchbox has the chutzpah of co-founder Danny Govberg.

Every floor of its gleaming four storey headquarters in a leafy suburban business park on the edge of Philadelphia has its own 10 foot tall comic book hero statue greeting you by the elevator.

Danny Govberg, Rob Corder and the Hulk.

 

The building has more office space than workshops and logistics, but it does house an impressive walk-in safe containing more F. P. Journe and Richard Mille watches than I have ever seen in one place at the same time.

Bob’s Watches on the West Coast is all about location and space, but you would never know it was the headquarters of one of America’s largest pre-owned Rolex dealers as you approach through the affluent neighborhoods of Newport Beach in Orange County, southern California. Owner Paul Altieri likes it low key.

It is more secure, and he prefers to do his talking through the transparent way his website trades watches.

Prettiest of all is Xupes.

Housed in a thatched barn conversion on the outskirts of an affluent London commuter belt town, everything about the location — recently reclaimed from farmland, and the interiors with high beamed vaulted ceilings — is beautiful.

 

Even the team, including co-founder and managing director Joe McKenzie, look like they live their lives in a 1980s cocktail commercial.

If you picture all watchmakers as arch-backed ancient grey men stooped over their benches, you have not met the young, Dutch service centre manager Megan Young.

When a British broadcaster was looking to create a documentary-cum-reality show about how sophisticated and glamorous the pre-owned market for watches, jewelry and handbags has become, Xupes was the obvious choice for the fly on the wall production team of the show called Second Hand for 50 Grand.

Xupes was also a good choice for the documentary because it has everything in one place. The main workshop is behind a glass wall on the same floor as the open plan office where the team is constantly buying and selling like Wall Street brokers.

There are even big screens dotted around the office showing the latest trades and which team members are doing the most business. The screens are a portal into a sophisticated CRM system that has built up rich data profiles on clients so that their desires can be anticipated before they have even fully formed.

“30% of our business is with repeat customers, and that figure is increasing by 2% per year,” Mr McKenzie tells WATCHPRO on a recent visit to the premises. The business may have been born because of his love for watches, and Joe’s father’s art and antique experience, but it is a data driven operation in a picture postcard location today.

The relaxed style of the operation is a front for a business in which every detail is critical. “It is very complicated and very specialized,” Mr McKenzie insists, while explaining how vital it is to have an encyclopedic knowledge of watches so that they can be correctly valued.

Mistakes can be very costly. A new breed of super fake watches and handbags are almost impossible for the unseasoned to spot. Xupes has never fallen foul of the counterfeiters and sold a knock off, and often has the unpleasant task of telling good customers they have been duped when they bring in a prized timepiece to sell.

During a tour of Xupes, WATCHPRO was challenged to say which of two Rolex watches we were shown was real and which was a fake. The answer was that they were both counterfeit, but it was incredibly difficult to spot any flaws, even using a loupe.

That is why every watch sold by Xupes has to be fully checked and serviced by the workshop team. Xupes buys around 80% of the watches that it goes on to sell, but even the 20% of watches sold on consignment must pass through the workshop because trust is everything in the pre-owned business and a single slip up would damage the company’s reputation (it currently scores 4.9 out of 5 on Trustpilot with 97% ‘excellent’ reviews and 3% ‘good’).

Xupes was founded in 2009, and its turnover was nudging towards $14 million a decade later and the company now employs over 40 full time employees.

Mr McKenzie says growth has been deliberately held back because he did not want a rush to lead to compromises in quality that could damage trust. “We have chosen not to scale too fast in order to maintain customers service,” he insists.

Having perfected the systems and processes that underpin that customer service, Xupes is ready to switch off the rev limiter and take a giant leap forward.

The company is eyeing up a new 15,000 square foot premises that will give the company the headroom to triple in size.

There is something else brewing that means tripling the size of the business could be achieved as early as next year, but Mr McKenzie would not let the news slip despite WATCHPRO using its journalistic dark arts on him throughout the tour.

The new premises won’t be far from the current barn, in fact it is likely to be another much larger converted barn on the same estate.

Most customers come to the current barn or they trade over the internet, phone or WhatsApp with Xupes experts who will travel to the homes of their best clients.

From earlier this year,  they can also meet in a new retail space in London’s Square Mile where a boutique has opened in the Royal Exchange.

Like all successful entrepreneurs, Mr McKenzie knows that the greatest impact is made in sales and marketing. Social media is like a funnel where people first discover the prestige watches, jewellery and handbags Xupes has on offer, and the company has two photography studios in the barn to generate perfect content.

One studio is for close ups so that every detail of a watch can be seen in extreme close-up. The other is more like a fashion photographer’s studio where lively lifestyle shots sell the dream.

There is an important connection between the photography and the workshop. A special laser welding machine, rarely found outside anywhere but the highest end watch workshops, can fill microscopic dents and scratches like a road builder fills potholes.

Filling imperfections is far better than polishing them out, because you do not lose precious metal and wear away cases and lugs over time.

“Watches can last for more than half a century and should not be polished more than five times in their lifetimes,” Ms Young advises.

When you take that much care bringing cases back to mint condition, you want cameras and lighting that can pick up that level of perfection.

That perfection is the ultimate aim of Xupes, and the reason why it is riding high above the morass of old fashion traders in the jewellery quarters of London and Birmingham.

There is a possibility that Channel 4 will follow up on Second Hand for 50 Grand with a multi-part series about certified pre-owned, and Mr McKenzie is already speaking with producers about getting involved.

That, and the aforementioned game-changing development that is currently under wraps, show the ambition of a business aiming to create and stand atop its very own pedestal.

Previous articleBlancpain sets sail with Oceanea to explore marine life in the Gulf of Mexico
Next articleWatches of Switzerland Group market cap soars to $3.5 billion after another stellar quarter

LEAVE A REPLY

Please enter your comment!
Please enter your name here