William Rohr is a rare breed, of those who left a high profile career in finance to work in his passion by joining the auction house Antiquorum in 2007. A long time passionate collector he became a pillar of Time Zone (of which he is also General Manager) which he stumbled upon in 1995 while searching the net for information on one of his watches.
Needless to say that his knowledge of the industry and his love for watches along with his years of collecting and now professional approach as first auctioneer and now investor has given him a wonderful overall view of the world of watches and collecting. Known for his politically incorrect speech and frankness he accepted to speak to The Hour Lounge about the current state of the watch market, auctions and Vacheron Constantin.
This interview took place late September 2010 while William Rohr was still CEO of Antiquorum, he has since left to join a fund investing into tangible collectible assets (art, wine, watches…)
scan courtesy of Brad Trent
How has the watch market changed as a result of the global financial crisis?
You have to distinguish two markets : the vintage market, and the modern market. The vintage market has kept a steady price range; it has dropped maybe 30%. The modern market has dropped significantly more, around 50-60%.
The vintage has older and more sophisticated buyers who are looking for the better piece, quality over quantity in this market. Collectors would rather buy one or two nice pieces for their collection, which they can find in this market, rather than buy loads of watches to complete a collection. At the same time collectors who give us (Antiquorum) watches to sell are not keen to sell their rarest and best pieces in this market. So now we have a situation where a few rare and beautiful watches hit amazing prices because they are the only rare watches in the market.
You may think that it’s the worst time to sell a rare watch but actually it is the right moment because there is nothing else for the richest, the best and the people who have the money but have nothing else to buy in this market.
Who are the collectors who are buying today? At one time it was the Italians, then the Americans came, is it true that now the Chinese are very active?
Absolutely, the Chinese are today, the biggest collectors. Unlike what you may read in the press, many of them are sophisticated collectors and there are both vintage collectors and modern collectors. Vintage collectors are mostly of pocket watches especially those made for the Asian market back in the late 19th Century such as work from Bovet. And at the same time you also have Chinese collectors who buy modern watches. Vacheron is one, if not the, biggest brand in China in the high-end/haute horlogerie. There are keen Chinese collectors who love Vacheron Constantin and are seeking some of the rarest modern Vacherons. An example is the limited edition Tourbillon Malte made for the US market and which we sold for over $100 000 at our New York auction in September.
|scan courtesy of Paul Boutros||scan courtesy of Paul Boutros|
You mention Vacheron Constantin watches, but we can’t really say the prices of the vintage watches, or even the modern watches, are really going through the roof, even with the Chinese, how do you explain that?
I think Vacheron suffers from a lack of information. What Patek did very early on with the Banbury (the previous Curator of the Patek museum and archives) was to edit books and to list the movements they made, serial numbers etc… and they kind of gave some transparency to the market where we had access to some of the information that was helpful for some potential collectors to rely on. With those you had a guide to help you navigate through vintage watches. This of course had a follow effect on the modern watches because if the manufacturer gives information about the past, it means that they’re more willing to give information about the future. So, people think that your competition had already said what Vacheron did not. Today Vacheron doesn’t have books published independently, or even from the Manufacture, that are technical books about production from very specific periods, it doesn’t exist. I mean I would love to have a book about post-World War II Vacheron Constantin production, which doesn’t exist. The brand has a fantastic production of which we know very little. We rely on books that give mostly marketing information rather than technical information.
Is it the role of the brand to give that kind of information or is it more the role of the auction houses to inform their clients?
Of course it is the role of the experts to provide information to their clients, but the experts need access. The experts cannot make numbers from nothing. An expert needs to have access to the archives and today brands don’t do this. Brands sometimes hire independent experts and give access to the archives and have the later write a book about them, but not with Vacheron. Vacheron has published a book during the 250th anniversary, but that book was mostly marketing and about the history of the brand itself. Today we need brands that produce, promote and help authors and experts (even within the brand) to write books that are much more technical. The marketing gimmick doesn’t work in books. Rolex has very technical books now about Daytonas and such and it’s important for a brand to provide this information and entice people to know more and more. The more sophisticated your collector, the more loyalty you will get. That’s something brands today don’t understand. How do I get technical information?
So what is Vacheron Constantin’s position for you in the auction market today?
Vacheron is a brand that has a lot of potential. They have a rich history, continuous production for over 250 years, and you have a depth of production that is unique in the industry. The major problem is that pricewise people don’t have consistent results at auctions. Lack of consistency at auction has made people nervous. If you buy a tourbillon today or a minute repeater or perpetual calendar and you get a certain price at one auction and then get 20% or 30% more or less at a different auction, it suggests volatility in the market and it makes people nervous.
How do you explain this volatility?
The volatility, in my opinion which is based on observation - it is a very empirical opinion - is due to a lack of consistency on the product range. Let me explain. For many years Vacheron would introduce a product in the market then discontinue it. There was no evolution of that product, instead a new model line was introduced so what happens is that this product doesn’t exist anymore in that market and people don’t know how to buy this product compared to modern. For example, if you buy a Vacheron Chronograph from the early 1990’s, you will notice that the watch doesn’t look the same as it does today. The product has evolved and has a much better quality today. So you, a collector, see that watch at a very low price at auction, you wonder why you should pay more for a Vacheron Chronograph made 5-10 years ago and the product has evolved completely, it’s completely different. The other example is, you buy a watch that was made 20 years ago, for example a triple date with moonphase which doesn’t exist anymore and people have no idea what a triple date with moonphase would cost today in a store by Vacheron. I’m thinking of course about the 4240 which is the vintage model, but Patek doesn’t have this problem. People know the prices today, 10 years ago, 20, 30, 40 years ago, and the quality is very consistent.
So what do you think the brand should do on its side to make the prices more consistent at auctions with the image without actually intervening in the auction and buying its own pieces?My opinion is that you need to show that you are proud of your history, that you cultivate your history and you must show Vacheron’s history to the world. I think Vacheron must actually buy watches, or at least promote their heritage, and this is not happening. If people see that their watches could be museum pieces and that people could potentially come and admire what they own, those people will buy them. You need today to feel that when you buy a watch you are buying a piece of art like in a gallery. If you see that the artist has a painting at the MOMA or at the Centre Pompidou, you feel better that one day what you have will be recognized by people around you as a work of art. And this is regardless of the price. This is something the independent watchmakers have already seen, that their work is recognized as dynamic, forward thinking, as a shifting fashion trend in watch making. And you can see that those willing to risk new things are interesting others. It’s the stuff you see in museums.
But do you know that Vacheron Constantin has an area for exhibition in the Geneva boutique, is that not enough?
I believe that it’s too small. I’ve been to it. It’s nice, it’s tasteful, the presentation is beautiful, but it’s small. I was also in your boutique in Shanghai and there were a few pieces as well, but you need to have more of a wide range, you need to maybe publish a little catalogue for people to have while looking at those watches and understand them better. I believe that the key to a successful brand today is a better educated customer, a well educated customer is somebody that will buy your products and come back. I also believe the internet is the easiest, cheapest, and most forward-thinking way of doing this. If you show your collectors you want to tell them more about the product you have sold and are selling, you are educating them and making them fall more in love with the products. That’s why The Hour Lounge is something special and I’m not throwing you flowers!
|Vacheron Constantin boutique in Geneva|
Let’s go back to modern watches; you were saying they were selling at 50-60% off retail at auction right now, what is the advantage for someone who actually has a modern watch to sell his watch at an auction?
Well, there are not a lot of possibilities for someone who owns a watch today to sell it. You have three ways to sell a watch today if you are a collector or amateur :
The first option is via an auction house—you come to an expert who gives an opinion and you get a result, the expert will have a transaction for you and you will get, minus commission, the amount that it was sold at the public auction.
The second option which has been available for the last 12-15 years is the internet through different websites like Ebay where you can sell your watch. The lack of expertise selling watches overseas, shipping them, describing them, that makes a lot of work and people often don’t have the time to do this
The third option is the most natural one, to sell it to friends, other collectors, and that is more difficult because you need to find somebody who wants the watches and you must keep it in a state that is consistent with the expectations of your friends.
So why come to us? Because at the end of the day, you are not going to get much more from your friends, Ebay or the internet where you have much more work to do. And sometimes you hear of a good surprise from the auction house, it happens.
Is the 30% you get from sales (sellers plus buyers commission) really justified?
Yes, we have a couple of things that we do for you: We photograph your watch, we sometimes repair your watch if it is broken, we describe your watch, and we promote your watch by taking it on tour all over the world. Like tomorrow I am leaving for New York to show the watches at auction and then I am leaving for Shanghai and Beijing and Hong Kong for the exhibitions and this has a cost. The experts have to work and live and we do provide a certain service and this costs money.
How do you see the end of the crisis? How do you see the shift in the auction market?
That’s the million dollar question! I think that’s the question everyone asks “Who is going to come out of this on top, and who is going to come out of this on the bottom ?’’ Are there clear winners and losers today? Yes. Before this market crisis, the market had different buyers, different products, and now we have new buyers and new products. So let’s start with the losers, I believe that for modern watches the biggest loser is Rolex. Rolex, who was consistently a watch that was considered modern blue chip has been losing steam, people are less interested in buying modern Rolex. Another one is the darling of the watch community: Lange & Söhne which has been quite weak lately. In the vintage market it’s the smaller watches with complications where the brand did not have a history of complications, for example Breitling split seconds chronographs. Also, we see some difficulties with vintage sports watches.
Which ones for example?
Omega’s Seamaster 300 or Jaeger Lecoultre Polaris are getting a little bit weaker. They had a tremendous growth in the 90’s and 2000; you could buy such a watch 20 years ago for 1,000 CHF and sell for 10-20,000 CHF. Lately they sell more in the 10-15,000 CHF range not in the 15-20,000 CHF range. But again, compared to others they have kept a pretty decent price.
And the winners ?
Patek. Patek is still there, they’re still number 1 but Vacheron is a serious contender.
So winners, just Patek? Anybody else?
You know, Patek is the only one that I would say is the clear winner now getting out of the crisis. I think there will be new winners, I think it’s too early to tell, we’ll see in two or three years when we can see brands that we didn’t think would get ahead or have proven to have a consistent track record in the coming 2 years.
There has been great success among collectors and aficionados of independent watchmakers; do you see this as a trend? Will these watches be considered as collectors pieces for the future? I hope so, I really hope independents are here to stay. I’m a big fan and huge supporter of independents and I think they have brought a lot to watchmaking in the last 20 years. My issue with independents is a bit what I was saying at the beginning of this interview, is preserving the history, preserving the heritage and preserving some marketing with it. If you disappear your brand goes with you if you have not provided and nurtured it to the point where someone else can carry it. And I see many independents not having done that. I see a lot of independents getting richer, selling more watches, having more collectors but I don’t see a lot of them showing that they’re willing to keep that heritage and preserve it. There are exceptions, I am thinking of Journe who is going from single independent to a brand.
Imagine three vintage and three modern Vacheron Constantin watches, which ones do you see as being collectible and worth having and could eventually be blue chips ?
Blue chip in vintage…definitely complications, all of them. Then, more specific, “Grands Complications’’. Vacheron has few Grands complication vintage wrist watches but some great blue chip pocket watches. I also think that the triple dates such as the ref 4240 have potential …you’re not going to lose money today if you buy a beautiful original 4240. I also like form watches and watches with strange unusual case shapes and lugs. Finally, I really like Vacheron utilitarian watches like the Corps of Engineers. I think for 3,000 euros today, you have a watch with a very interesting story, in silver, with a beautiful dial and interesting movement.
|7 complications from 1905||"Fouad" 14 complications from 1929|
|ref 4293 triple date+ minute reapetar from 1953|
|Corps of Engineers||Corps of Engineers|
And on modern?
Modern is a little bit harder. I think modern is more a question of taste of each individual. I favor the new Patrimony Traditionnelle chronograph from Vacheron. I favor the rather unique signature pieces such as Quai de l’Ile, which I think has potential. And, of course, signature pieces very unique to the brand such as “Les Masques” and the “Les Grands Explorateurs’’. Of course, the obvious one that I’m sure everybody is expecting is the Mercator.
|Patrimony Traditionnelle Chronograph rose gold||Patrimony Traditionnelle Chronograph white gold|
|Tribute to the Great Explorers: Christopher Colombus and Marco Polo|
|Metiers d'Art Les Masques: China||Metiers d'Art Les Masques: Mexico|
|Quai de l'Ile Day/Date|
The Mercators don’t seem to be exploding
The price hasn’t exploded but they haven’t gone down either, I mean look, IBM’s share price did not go down during the crisis, IBM stayed steady. Philippe Morris has stayed steady, they did not grow 30% during the crisis, but they didn’t go down 30% and they kept paying dividends and this is the sign of a blue chip. A blue chip is a watch that is not going to lose its value, but it is not going to jump and increase. I think it has been consistent and showed low volatility, and those watches I mentioned today are what I consider blue chips: low volatility, consistent prices at auction, and potential growth in prices.
|Maercator with engraved dial||Mercator with polychrome enamel dial|
Last question, what would you say to people who want to buy watches as investments?
If you want to make a small fortune in watches, you have to start with a large one.
Here comes the itch... Thanks Alex for posting.
Very much enjoyed the interview which helps to colour one's thoughts. Good stuff, Alex. Tony (NB: It's good to be back after an absence!)
Very enlightening, I really enjoyed it!! Makes me wonder how the Excellence Platine collection will perform in the secondary market... Cheers, Francois