Investment bank RBC Capital Market is tracking the percentage of listing for new/unworn watches versus pre-owned on Chrono24 and using the data to assess the health of the world’s biggest watchmakers.
The theory is that a glut of brand new watches appearing on the secondary market is a signal that there is less genuine demand from consumers, forcing authorised dealers to flush stock through the grey market.
Analysis of Swatch Group watch brands selling on Chrono24 this month contributed to a downgrade of RBC’s view of its stock. The research accompanied a more substantial look into fears over consumer demand slowing in Hong Kong and China, which also fed into the rating downgrade.
RBC found that on November 16 there were 274,754 watches listed on Chrono24 from the top 30 Swiss watch brands. Of these, over half, 143,422, are described as new/unworn.
One in five of the new/unworn watches listed are 2018 models, a total of 53,754 pieces.
Any watch brand with less than 20% of its 2018 watches listed as new/unworn is considered by RBC as “in good shape”. This includes Cartier, Rolex, Patek Philippe, Vacheron Constantin, Jaeger-LeCoultre, Tissot and Audemars Piguet.
The correlation between the percentage of new/unworn 2018 watches and the health of a brand is far from perfect, and RBC would improve its accuracy if it also analysed the difference in prices between full retail for 2018 watches and the prices they are selling for on Chrono24. However, this cannot be done with perfect accuracy because the sold price is not always the same as the listing price for watches, and many watches are sold offline by dealers negotiating offline with customers.
It is also important to factor in the volume of watches being listed, not just the percentage. In a perfect world for the watchmakers, the only new/unworn watches that would appear on secondary market sites like Chrono24 would be those selling at above retail list prices as we currently see with models like Rolex’s 2018 GMTs and Patek Philippe steel Nautilus watches.