Stephen Silver Fine Jewelry is refurbishing its boutique in the heart of California’s Silicon Valley. That will create an even more exclusive environment for the rare watches it sells from the likes of Urwerk, Ressence, HYT, De Bethune and MB&F. These marques are having a moment, with demand outstripping supply and waiting lists growing. WatchPro’s Rob Corder wanted to know what is fueling this boom, and turned to the retailer’s president Jared Silver (pictured above with father Stephen) for advice.
WatchPro: What has been your experience of how the pandemic has changed the way independent watchmakers operate either through retailers like yours or direct to consumers?
Jared Silver: In my opinion, the pandemic has not brought about major changes in the way independents do business. Rather, the best of them are responding to existing macro trends in the industry, including right-sizing their production to draw attention and demand toward their most popular models.
It has also really separated the haves from the have nots when it comes to social media branding and the results which we feel as an owner operator at retail.
Collectors are beginning to see that the most desirable watches, like MB&F’s LM Perpetual Evo or the Ressence X Anniversary watches are now only available for very short periods for the most loyal customers.
WatchPro: Was there a significant impact on production for independents you work with last year, and how has that impacted you?
Jared Silver: For our brands, production and delivery did not seem to be the issue we feared it might be in March/April 2020.
The good companies kept up a drumbeat of regular, focused launches that seemed to hit home without the usual structure of trade show launch and publicity.
Often, they work with us to communicate to our audiences even before the official announcement/launch.
This is far more effective than the old paradigm of global publicity that dies away months before the watches are available for sale.
WatchPro: How do you expect things to develop, assuming the pandemic is successfully beaten this side of summer?
Jared Silver: We most look forward to the ability to gather with our customers, particularly with the various personalities of the independent world.
This emotional connection is the most important thing the sector offers.
I must say, however, that the watch industry has received a significant shot in the arm during the pandemic as new energy gets behind hard goods at the expense of travel and other experiential products.
I hope some of this momentum continues beyond.
WatchPro: How do you pick which independents to work with? Do you make these decisions with your head or your heart?
Jared Silver: The first thing I ask myself is “will this brand be around 5 years from now?”
While the various independent watches may be the most emotionally satisfying part of the pastime, surviving and running a business in this sector requires a very hardheaded approach.
My collectors view me as a guide to their watch collecting journey and I need to be able to stand behind the quality, sustainability, and longevity of the brands we represent.
These companies are the least corporatized entities in the industry and the most likely to be managed by fickle, artistic personalities.
The wrong approach can not only mean a failure to explain and market their brand, but a lack of aftersales service or even closing up shop.
These deficits not only make selling the watches difficult, they prevent the brands from capitalizing on their opportunity, which hurts the collectors who have supported them.
WatchPro: What brands have been particularly hot this year?
Jared Silver: Brands like MB&F, Urwerk, and Ressence have been on fire this year.
They understand that success is achieved together, which allows their artistic genius to flourish. It does not happen on its own.
WatchPro: Watches from independents like F.P. Journe and Philippe Dufour are selling for record prices. Has that stimulated demand for other watchmakers because they are seen as safer investments?
Jared Silver: We avoid promoting watches as “investments”, and would never do so even with a case full of Patek Philippe 2499s.
Just because there are some models of some watch brands that are trading at a premium price to MSRP today does not mean they will be in the future.
Tastes can change in as short as 12 months in this business. As a collector, I am not a fan of buying a watch for the sake of pure financial gain.
My conversations with our clientele have to do with the overall ‘collectability’ of a brand or model, which is a quality that may offer financial advantages now or in the future.
In my mind, the basic ‘collectability’ equation is: 1) the artistic credibility is very high and 2) a consistent high level of demand while the production and availability is very low.
This is true to varying degrees of most of the independent sector. Anything that brings this fact to light will help the whole independent sector.
WatchPro: Have the shortages of watches from Rolex, Patek Philippe, Audemars Piguet, etc, and the record prices these are creating on the secondary market, making collectors turn to independent watchmakers as alternatives to watches they cannot buy at retail?
Jared Silver: To some degree this is true. We have had a number of collectors look at independent watches who have expressed frustration with the state of availability at the major brands.
There remains, however, a gulf in psychology for many watch customers.
It takes sophistication, self-confidence, and often an immersion in horology to purchase a piece from an independent watchmaker.
I like to think of it as a pinnacle in a watch collector’s journey, but it may not appeal to someone who derives primary comfort from the status of an established legacy brand.
WatchPro: F. P. Journe says its watches are “Invented and Made” on each dial, which is one possible way to define what makes a watchmaker independent, but how would you define the term? What separates independent watchmakers from just privately-owned watch businesses?
Jared Silver: I define an independent watch company as one in which the owner or founder takes a direct and primary role in the creative process. Their vision defines the product. I would not classify a company like Patek Philippe or Rolex in the same category even though they are technically independently owned and enjoy many advantages over the group-owned brands. Their watches must reflect a long legacy that goes far beyond the lives and experiences of their current owners.
WatchPro: What benefits do independent watchmakers bring to your business?
Jared Silver: We originally turned to the independent sector, because we thought it would be a cultural fit for the jewelry we make at Stephen Silver and our customers. We are entrepreneur and creators of rare and world-class hand crafted pieces of exceptional artwork, just like the watchmakers we represent. Working with these companies also allowed us to create our own environment free from the large-scale and ubiquitous branding now seen at retail. This seems to work with the culture in Silicon Valley, which is a sophisticated and discreet.
WatchPro: What are the advantages and challenges compared to the biggest and best-known brands from the groups?
Jared Silver: I cannot disguise the fact that selling independent watches is hard work, especially compared to the most successful of the large brands, which bring a much higher level of equity and demand to the table. We must assume a higher proportion of the marketing responsibility with the independents and the sales process is also somewhat longer. Conversely, we are free from the excessive requirements of the brands and can create a much more unique statement in our market. We have made it work because we have made the investment in developing the right customer base for these watches, and believe for them and us, our focus will generate long-term benefits.
WatchPro: Do you have personal relationships with all the independents you work with?
Jared Silver: One of the benefits of the sector is our direct access to the principals at these companies. We share a partnership to a much higher degree than we would at a larger brand, and believe these companies listen to our input in making both of our businesses successful. The relationship extends, of course to our customers, and I cannot emphasize enough the importance of this emotional bond.
WatchPro: Which independent brands have been on the rise recently, and what does it take for them to get momentum?
Jared Silver: I think the dynamic of the independent market has changed, just as it has across the general market. Buzz used to support independent brands and the latest young maker to emerge would get a boost in sales from interested collectors. This still exists to some extent and talents like Rexhep Rexhepi at Akrivia are getting the due they deserve. Many collectors today are driven by the secondary market and availability—the same thing experienced by the large brands. Unavailable means most desirable and the most successful independent brands have a great idea of who exactly will be interested in buying a new watch and they tailor their production figures to that. The companies who are best at that game are the ones who will have the real momentum.
WatchPro: Who is a typical customer for watches from the independents?
Jared Silver: I used to think independents largely appealed to experienced collectors, who were likely to be older and further along in their collecting career. That said, so many new customers are under 40 and highly sophisticated in their taste. They want something different than standard fare and have the knowledge and trust to take the plunge. These are qualities shared by all independent watch customers.
WatchPro: Would you recommend other jewelers consider independent watch brands, and why?
Jared Silver: I do not think representing independents is everyone’s cup of tea. It really requires a jeweler to ‘represent’ the brands to their clientele. Most jewelers bring in watches to pull in new clients because of the marketing and branding of the watch companies. These are not things the independent companies can provide.
A retailer needs a group of clients who want to look beyond the usual brands and are open to the content needed to really understand what these independents are doing.
WatchPro: Are there any independent brands you would recommend right now for their investment potential?
Jared Silver: As I mentioned before, ‘investment’ is not a word I would choose to apply to watches. That said, I think astute collectors screen for limited and/or closed-production watches as well as scarcity on the secondary market to find models with the best upside potential.
I can say, in my personal collection, I’ve added MB&F, Urwerk and Ressence pieces in the past few years and I have my eye on Rexhep Rexhepi, Purnell, Gronefeld Brothers, and Kari Voutilainen.