Dubai is a global city that has been cut off from much of the world over the past 18 months. That has changed since the summer, and is now looking forward to welcoming millions of visitors to both the Expo 2020 world fair and, thanks to Ahmed Seddiqi & Sons, to Dubai Watch Week as a physical exhibition and forum. Rob Corder visited Dubai in August and found a city reawakened and ready to bring people together again. As Mohammed and Hind Seddiqi explain, the emirate is back in business and ready to welcome visitors to Dubai Watch Week from November 24 to 28.
WATCHPRO: How much have things changed in the past two years? The last Dubai Watch Week was at the end of 2019, which feels like a lifetime ago, and the Horology Forum was a fantastically open and honest environment where retailers, collectors and the press discussed the issues of the day as openly as they might normally only do in private. Some of the most heated debates were about waiting lists, but things have become even more challenging since then. Demand appears to be even stronger at the same time as production being constrained by lock downs.
Mohammed Seddiqi: It is getting more and more difficult. When Dubai was in lock down for two months, we started a concept called eBoutique. We got all the permissions we needed from the Ministry of Health, Dubai Police and Government to have team members delivering watches that they had sold over WhatsApp. We ended up selling watches that had been in stock for over a year and we could not sell when they had been in a window of one of our stores in a luxury mall. But over WhatsApp, just sharing a picture, we found customers who wanted to buy them.
We kept hot pieces from the likes of Rolex, Patek Philippe and Richard Mille aside. I am talking about rare pieces from independents; minute repeaters, tourbillons, grand complications. I believe that the pandemic helped us connect more and more with our clients, not on a marketing level, but on an individual level. We listened to them, we got to know them and their tastes.
Since 2019, we have created more than 40 unique pieces for clients that we met during the lock down, most of them from independent brands. And now we are making sure that we have complete documentation and certification for each of the watches on behalf of the customers. I believe we will see them go up in value over the next 20 years and it will be important that collectors can show how the watches were created with the help of Seddiqi.
Most of the independents today like Moser, MB&F, De Bethune, Urwerk, Greubel Forsey; they could become in the future what Patek Philippe was 100 years’ ago.
WATCHPRO: Do you think the independents you are talking about want to grow to the size of Patek Philippe today, which makes around 60,000 to 70,000 watches per year?
MOHAMMED SEDDIQI: You never know how big they will become, but looking at the watch industry as a whole there have been ups and downs. A lot of watch brands disappeared during the quartz crisis because people did not appreciate mechanical watches. That has changed now. People appreciate traditional watchmaking more and more. It is something that, as Patek Philippe says, is something that can be handed down from generation to generation. The whole watch industry should adopt that line.
WATCHPRO: It feels to me like the top end of the watch market is behaving more like the fine art market in terms of people appreciating the genius that goes into watches and their potential as an alternative investment.
MOHAMMED SEDDIQI: Unfortunately, in recent times, we have seen a lot of flippers and investors drawn into this market. It is our job as retailers to educate people into what they are buying.
I was talking to friends and family recently about how today it is possible to make more money buying and selling watches than buying property in Dubai. It is easier, it is faster; you can enjoy them and wear them. Watches can be carried with you anywhere you go. Property is so much more complicated.
So yes, watches are a good investment, but we do not support the idea of people purchasing products so that they can keep them in a safe and sell them in a few years. We are encouraging our clients to buy what they like and not to just look at the price increases on the market. It is not an easy task because everybody looks to what benefits them.
This morning I was speaking to one of my clients in the UAE, who is a very big collector, and he was always looking for the hot brands in the past. He is very well off, and he never bought anything because he wanted to sell them, he just enjoys watches. But this morning he was telling me that his feelings have changed towards the watch industry and he is now focusing more on independent brands because of the finishing, quality and how rare they have become.
Without mentioning specific brands, there are some watches that are made in quantities of 100,000 pieces that are difficult to get and can be flipped for a quick profit.
In the long term, watches will retain their value because a timepiece is a piece of art. The case and bezel are the frame and the dial is the artwork. A collector friend of mine says that if you consider a watch and a painting, the watch is more valuable per square centimetre than the painting in most cases.
There is 200 years of know how in creating watches. It is just unfortunate that people now consider it as just an investment.
WATCHPRO: The story of shortages appears to have moved on. Two years’ ago, when we last gathered at Dubai Watch Week, there were profits to be made from what I call unicorn watches, and this had contributed to shortages and extremely long waiting lists, but authorized dealers generally saw it as positive because it drew attention to the underlying value of luxury watches. Now, the same retailers are telling me they are really suffering. They have staff with anxiety disorders because they are bombarded with people — some professional flippers, others loyal but extremely frustrated customers — trying to buy them. They are phoning, e-mailing, WhatsApping, coming into stores. It is getting out of control.
MOHAMMED SEDDIQI: 2020 was a year where we saw that there was a reduction in deliveries because of lock downs. 2021, deliveries are more or less back to normal. There is no shortage of supply from the factories. However, demand has jumped 3000-times. It is an issue we are facing as a retailer and as members of a family business we are getting requests at an unbelievable level. The demand through the showrooms is off the scale.
We have to tell customers that if they want to buy X watch from X brand, they have to be a customer of the brand. I cannot give you a Daytona as your first Rolex. You have to have a DateJust, you have to have an Oyster Perpetual, you have to have a gold watch.
Looking at the passion for watches and the demographic of the Middle East where families tend to be rather big — you have your wife, your brothers, your sisters — so the opportunity for that family to build up a history with a specific brand is more straightforward than in Europe where a husband and wife might buy one Rolex and then ask for a Daytona next. This makes the demand here even more challenging. It is exploding.
We are trying to inform people as much as we can that the priority for the hot watches is to existing customers of the brand.
WATCHPRO: What that ultimately does is shrink down the customer base. Rolex ordinarily makes around one million watches per year and might ordinarily have sold them to 500,000 customer. Now, because customers need to have a history of purchasing from the brand, there might only be 100,000 customers in the world able to buy those million watches, which will ultimately make the problem even worse while making 400,000 people unhappy with Rolex and their authorised dealers.
MOHAMMED SEDDIQI: Not really. I always tell my friends that being a watch collector is an addiction. You start with one watch, and tell yourself it is the last one you will buy. Two weeks later you see another piece you have to have and say again that will be the last one. It never stops.
The task is difficult and it is an ongoing problem. People say it is a bubble, but we have been hearing that for a long time now and I don’t see how it ends.
I remember around 2008, we had the GMT Master Pepsi on display and people could negotiate a discount. I was in sales at the time and I was pushing my friend to buy it but they said it was too colorful and the jubilee bracelet was not right for it. Aquanauts were on display. In 2005 we had a boutique in Wafi [a small, prestigious Dubai mall] where you could walk in and buy a Nautilus, an Aquanaut. Today, nothing.
In 2004 I was walking in the gold souq and I saw an Explorer II from 1971, the Steve McQueen watch. For me, having a passion for watches I stopped and spoke to the dealer who told me he had been trying to sell it for the past five years and nobody wanted it.
I asked him how much he wanted for it and he said five thousand dirhams, around $1,500. It was a brand new watch that he had bought in Saudi Arabia, and I bought it from him [the same watch sold at Sotheby’s New York in 2020 for $25,000]. There was no appreciation for these watches at that time.
What changed this mentality is marketing, looking back at the history of the brand and the fact that they became talked about as investments. Auction houses have helped to build the perceived value of these watches significantly. The marketing they have put in around watches as an investment has played a major role and taken the industry to a different level.
WATCHPRO: Ahmed Seddiqi & Sons has dozens of sumptuous stores in the most spectacular shopping malls in the world, including the world’s biggest Rolex monobrand store. How have recent issues, like the shortages, the lock downs, the lack of tourists to Dubai in the past 18 months and the fact that you can now sell watches over WhatsApp affected your business model?
MOHAMMED SEDDIQI: If we sell a watch over WhatsApp, we still have them come to one of our boutiques and having the full experience and maybe buy another watch one day. Brick and mortar will still be vital in the watch industry and wider luxury industry.
WATCHPRO: You have around 60 stores today. Do you think you will have fewer or more in five years’ time?
MOHAMMED SEDDIQI: I think we will slowly increase the number of stores, not at the pace of the past 20 years when we have doubled the number of stores. I do not think it will go to 120 stores in the next 20 years, but I do not think we will close stores.
WATCHPRO: How do you feel about multibrands compared to monobrand stores?
MOHAMMED SEDDIQI: We are still focusing on multibrands to showcase brands that cannot afford their own boutiques. Some cannot afford the rents in Dubai, London or New York.
WATCHPRO: An interesting phenomenon that data from the UK shows is how much the average transaction value for each watch sold has rocketed over the past 18 months, not on the secondary market, but for brand new watches at authorised dealers. Retail analyst GfK shows ATVs up more than 60% year on year. Part of that is the falling away of the low end of the market as Apple and Samsung smartwatches have gobbled up the sub-£500 sector, but is it also because customers are being forced to buy watches at £20,000-plus prices because otherwise they cannot buy the sub-£10,000 steel sports watches they might actually want?
MOHAMMED SEDDIQI: That is a worldwide phenomenon. The launch of the olive green Nautilus this year was not just an issue for us, it was a catastrophe because we got only a few pieces and we have so many clients that are regular Patek Philippe customers and we were forced to choose which of them got this watch. For us as a family we decided the priority would go to clients that have been loyal to Patek Philippe over the past 10 years as a token of our appreciation.
After the double-sealed piece was sold by Sotheby’s [for close to $500,000], the demand increased, not among collectors, but by people that have no interest in watches but are good friends of our family and wanted to get one.
Who would not want a $450,000 profit from one watch? We should have kept them all for ourselves (laughs). Instead we kept them for people that have been buying the grand complications and the ladies’ watches from Patek Philippe. We do everything we can to make sure they go to people that will keep the watch, wear it and enjoy it rather than keep them in a safe and sell them in a couple of year.
WATCHPRO: I do not blame people who buy a watch with that much potential profit and sell it. That is human nature. I also appreciate that joy of watch collecting comes from both buying and selling. It is hard on these genuine watch lovers that they are almost lumped in with flippers if they sell a hot watch.
MOHAMMED SEDDIQI: We have customers that buy watches and after a few years they come back and say they want to upgrade their collection. They want to sell, not necessarily to make a profit, but because they want a change and they became bored of a few pieces after wearing them and loving them for a few years. We never penalize them. But somebody buying a watch and selling it as soon as they walk out of the store, or after a few months without wearing it, is wrong. We try to avoid those people.
WATCHPRO: I am trying to find a way that this situation can be resolved without it hurting the brands or retailers. Is there a way of taking the massive spike in demand and prices for the hottest watches and flattening the curve so that demand spreads out across Omega, Cartier, Zenith, Hublot or whatever brand you like? What about increasing prices so that a £5,000 watch becomes a £10,000 watch?
MOHAMMED SEDDIQI: I started in the watch industry in the mid-nineties. At that time we sold Daytonas for 16,000 dirhams, which is $4,000, and in the seventies my father tells me they sold for less than half that.
Today a Daytona is around $15,000. Looking at the time line for that reference, you can see that prices have jumped a lot already. I bought a second hand DateJust from the 1960s that had its original receipt for 1,000 dirhams, around $200. Everything is getting more expensive, but people are being paid more as well.
WATCHPRO: I have heard that Ahmed Seddiqi & Sons is producing a number of unique pieces with brands to commemorate the 50th anniversary of the United Arab Emirates this year. Is that something you can talk about?
MOHAMMED SEDDIQI: We are producing close to 40 watches. They are not all one of one, but some are unique. Our aim is to give back to the UAE what the country has given to us as a family. We are producing watches with most of the brands that we carry that have a reference to the 50th anniversary engraved on the back. Unfortunately, none of them are going to be from Patek Philippe or Rolex, but there will be a number launched by our brands at Dubai Watch Week.
WATCHPRO: Dubai is a global city that is incredibly attractive to tourists, but worldwide travel is still heavily depressed, and is likely to remain that way for at least the rest of this year. How does that affect the way you plan for Dubai Watch Week at the end of November?
Hind Seddiqi: Last year we were able to attract a lot of local residents from the UAE to Dubai Watch Week. We know that this year, particularly as we also have Expo 2020 [a world fair in Dubai that was postponed from last year and runs from October 2021 to March 2022], we are expecting delegations and visitors to come here. We are working with the Expo and Dubai Tourism to attract as many people as possible.
You are here in Dubai and you can see that things are almost back to normal. This week [in August] hotels were told by the ministry that they are allowed to operate at 100% capacity again. The country has one of the highest vaccination rates in the world, which is allowing the restrictions to be eased.
WATCHPRO: What will visitors to Dubai Watch Week see and experience this year compared to the last outing in 2019?
MOHAMMED SEDDIQI: Let me put it this way: it is like getting a Daytona from the 1970s and getting a Daytona in 2021. It is the same design and the same technology, but the 2021 version is much more advanced. The finishing is better, the polishing is better.
HIND SEDDIQI: Every year when we finish, we get feedback from the visitors, the brands and the journalists who attend. We continue with things that have worked and we adjust other things.
The exhibition has been a big success, so that will stay the same. We have more standalone brands present outside the main exhibition tent. That is something we have been asked for but we have no more room in the main space so we are accommodating standalone brands around it.
Mohammed is also launching a collectors’ lounge, which is new. Collectors can come together and go more in depth about the watches they love and have seen in the exhibition.
But the show is open to everybody, and we intentionally include a weekend so that people who are not experts can come along and learn about watches. We have masterclasses demonstrating crafts and watchmaking to help people explore.
We are creating more activations so that people can come and win something. That is an incentive for people to visit. We have amazing F&B ranging from street food to fine dining. People really like that mix.
WATCHPRO: Do you have the same support from the brands? In 2019 you had a standalone Rolex booth, which may have been the last public event the brand has done since that was also the last year for Baselworld.
HIND SEDDIQI: Yes, Rolex is coming back in the same space. I will not give you the full list of participants at this stage, but most are returning and there are new ones. We always have a waiting list for the exhibition area.
We have combined Horology Forum and Creative Hub together. The feedback we got from 2019 was that journalists want more Q&A time, so we are going to deliver that. We will have fewer speakers given more time.
Horology Forum will address the most interesting topics that our team have tapped into on social media and Clubhouse. It is not commercial. We bring speakers that might have a clash of opinions, which can be a challenge.
WATCHPRO: I understand the politics and sensitivities of the watch industry and was delighted by how open and honest the Forum was in 2019. Will it be that bold again this year?
HIND SEDDIQI: The advantage of funding it ourselves as a retailer is that we have control. There are no sponsors to worry about. People want raw information; that is how we want to keep it.
Things did become more open during covid because brand CEOs went online doing live interviews. People enjoyed that because there were no PR people standing behind the CEOs keeping them on message. Social media has also showed that you need to have thick skin because anybody can comment on a post and you cannot control peoples’ opinions.
WATCHPRO: I agree with that, to an extent, with people like Georges Kern at Breitling, François-Henry Bennahmias from AP and Julien Tournare at Zenith being open and honest in online interviews during the pandemic. I don’t suppose we are going to hear from Jean-Frederic Dufour [CEO of Rolex] or Thierry Stern [president of Patek Philippe] at Dubai Watch Week?
HIND SEDDIQI: No. But I think Mr Stern is talking to the press more. Rolex is different. That does not stop Rolex and Patek being discussed in the Forum. The topics are really going to be interesting. Nothing is off limits. We are even widening the conversation to beyond the watch industry with speakers from the hospitality and technology worlds.