Hammer Time: Inside Watch Auctions
With the 2022 watch auction season well and truly underway, allow us to offer you some advice: When it comes to successfully navigating timepiece auctions, remember economics and emotions meet in the salesroom.
“Ask the man who owns one” was the famous slogan of the Packard Motor Car Company. Founded in 1899 in the pinprick town of Warren, Ohio, Packard was, for a time, the nerve center of all American automobiles. And at the helm was legendary industrialist James Ward Packard, who had an affinity for fine watches that equaled his love of fine cars.
Beginning in 1916, Packard (the man) engaged in a notable duel with another American industrial mogul, Henry Graves Jr. The two raced to build the greatest watch the world had ever known. Both moguls enlisted the help of Patek Philippe & Co., with Graves as the ultimate victor. The timepiece that resulted came to be known as the Graves Supercomplication, a 24-complication pocket watch encased in solid gold that tracked celestial movements, was capable of timing multiple events at once and needed adjustment only once or twice in its owner’s lifetime.
It’s only fitting that nearly a century later, in 2014, that exact piece would set the record, at $24 million, for the most expensive watch ever sold at auction. Aurel Bacs, current Senior Consultant at Phillips auction house, placed the winning proxy bid. However, the fate of the Graves Supercomplication leads us to our central questions: What causes these watches to ascend to such extraordinary heights? And what role, if any, does the auction process play?
The Birth of Obsession
There are many forces at play when it comes to the value of a vintage watch: its condition, design, provenance, history, and, of course, who’s bidding. But bringing a vintage piece into the auction room is what jump-starts all these forces alongside the theory of supply and demand.
Ask any vintage-watch enthusiast about his collector’s “origin story,” you’ll likely hear an anecdote about a watch that was passed down or otherwise given to the owner to commemorate a life milestone. My origin story concerns the Omega Genève given to me upon the death of my grandfather.
A basic gold-filled, manual-wind watch – handsome, without question, but not particularly valuable – I was eager to fix and restore it (a big no-no, as I am now aware). So, 15-year-old me ran down to an Omega retailer and had it sent off to Switzerland for restoration. And while that $2,000 service did not improve its value any, it did get me hooked on the brand.
Who Wore What?
At first glance, my collector origin story might not seem relevant, but emotion ties into the history, provenance, and ultimately the value of a watch in more ways than one. The superlative example of this is Paul Newman’s eponymous Rolex Daytona, says John Kagel, a professor of applied economics at The Ohio State University: “The private-value element is the value that the winning bidder or bidders would get from having Newman’s watch.”
To most people, Paul Newman, Steve McQueen, Ed White, Jochen Rindt, Jo Siffert, and Jean-Claude Killy are either famous actors, astronauts, race-car drivers, or nothing at all. But to watch collectors, they’re emblematic of the timepieces they were known for wearing. “A named watch definitely helps,” says Paul Boutros, Head of Watches, Americas, at Phillips. “But it has to be the right name.”
Back in the early aughts, when Steve McQueen mania hit its apex, a Rolex Explorer 2 presumed to have been worn by the actor was therefore dubbed, in an echo of Newman’s Daytona, the “Steve McQueen.” That name lingers, but unfortunately McQueen himself never wore that particular watch.
“When [scholars] pointed to that fact, prices for those Explorer 2 models sort of stabilized,” Boutros told Watchonista. “Had he originally worn that watch, we would probably see higher prices today in that market.” Like, for example, when Steve McQueen’s TAG Heuer Monaco sold at Phillips in 2020 for over $2.2 million.
The Private/Public Conundrum
That isn’t to say watches don’t get sold all the time. They do. However, most of those transactions are on the private market, and the details aren’t public record. Public-market sales of specific timepieces become benchmarks quoted by dealers and others, who use those lots as points of comparison for similar references. This process, and the value it creates, is officially called the “common value.” And “common value,” in lay speak, is the going rate.
But (and here is where it gets complicated) determining “common value” doesn’t always work this way.
Say, for example, you have an exceptional watch. And it’s either unique or of such historical importance that you can’t ascertain its private-market value. It is in this situation that the auction market comes into play. According to Ohio State’s Kagel, people bring pieces to auction because they don’t have a defined value.
Kagel explained: “If you’re buying clothes at Macy’s, you pretty much know what the value of those things are, but with a vintage watch like [the Paul Newman Daytona], in conjunction with it being from Paul Newman, who knows what that’s worth to people? The idea behind running an auction is – from the auction house’s point of view – to get as much money as possible. It’s a price-discovery process.”
Supply & Demand
How does the auction market impact the broader values of watches? Look no further than the Omega 2915-1 Speedmaster. Widely considered the rarest Speedmaster, it was produced only between 1957 and early 1959 – and no hard production estimates exist for it. Besides which, the watch was prohibitively expensive to buy in the late 1950s, costing $98 (at the time, a Rolex Submariner retailed for around $70). And, even without production estimates, we know that Omega just didn’t make very many.
It is one of the most coveted vintage watches, and – because of its low production numbers coupled with examples that have been serviced and had their bezels and hands replaced – finding one to buy or sell on the public market is a rare feat.
In the fall of 2017, Bukowskis, a small auction house in Sweden, announced that it has come into possession of a “barn find” 2915-1 Speedmaster – fresh-to-market and in phenomenal condition. Brought to Bukowskis for evaluation by the original owner’s son, the watch was purportedly untouched and never serviced. Naturally, the watch specialist at Bukowskis immediately recognized its significance, especially given the fact that a 2915-1 had sold at Christie’s in May of 2016 for about $115,560.
As a result of media attention about the find, plus the unprecedented condition of the piece, the 2915-1 sold for $275,508 – smashing the previous records. And as an epilogue to the sale: Since the Bukowskis auction, over twenty 2915-1 Speedmasters have been sold at auction, as the excitement around that result pushed prices higher and higher (the current record being $1.43 million at Phillips Geneva in 2021).
When the Hammer Drops
The cast of characters enter the auction room stage right and left, ready to battle it out for lot after desirable lot. The master of ceremonies is the gavel-wielding auctioneer, intending to get top dollar for all of it. And ideally, the combination of each item’s condition, design, provenance, history, and private-market value should result in its fair public-market value.
But nothing is that simple. Part of the auctioneer’s job is to inspire “auction fever” and spark a bidding war.
“The bidding marathon for the Patek Philippe Henry Graves Jr. Supercomplication was one of the most exciting, adrenaline-burning experiences of my entire professional life,” said Aurel Bacs, the winning proxy bidder of that rarity, in 2014.
Finally, although not totally quantifiable: It should be noted that a high auction price for a specific watch reference is usually a catalyst that helps narrow the gap between a piece’s private- and public-market values, as you can be sure that those in the private market will want to mirror the success enjoyed by the auction house.
Make no mistake: auctions remain the best way to value pieces that are without comparison. So how do the auction houses affect the watch market? The answer, much like the watches themselves, is complicated and deserving of further exploration. Stay tuned!
(Photography by Watchonista, other sources mentioned)