It was only a matter of time before the yo-yoing of the secondary watch market brought about casualties.
Chrono24, the leading online marketplace for luxury timepieces since 2003, has slashed about 13 percent of its workforce following a nosedive in the price of pre-owned wrist candy by Rolex, Patek Philippe and Audemars Piguet.
The company eliminated 65 jobs and offered severance packages to some workers at its headquarters in Karlsruhe, Germany, as reported by Bloomberg. The company hired about 100 workers last year amid booming sales but is now struggling with the extreme fluctuation in the value of pre-owned pieces.
Over the past few years, secondhand watch prices have shifted dramatically, especially when it comes to the Big Three. As the demand for new models outstripped supply during the pandemic, many shoppers turned to the secondary market to snap up top-tier pieces at a premium. Savvy collectors saw there was a buck to be made and began offloading sought-after models. The market was flooded with pieces by Rolex, Patek and AP through 2021 and into the spring of 2022. As a result, prices plummeted. The nosedive has also been attributed to rising inflation, the weakening economies in the US and Europe and the collapse of cryptocurrency.
“We have seen very volatile, you could call it a roller-coaster situation, in the industry,” Chrono24’s co-CEO Tim Stracke said.
Indeed, the price of a platinum Rolex Cosmograph Daytona has dropped 28 percent to about $103,000 (£83,000) in a year, according to the Subdial50 Index. The Patek Philippe Nautilus 5711 (pictured above) with a blue dial has fallen 35 percent to roughly $103,000 (£84,000), while the Audemars Piguet Royal Oak with a blue dial decreased by 29 percent to about $70,000 (£57,000), according to the data. It’s worth noting that the going rate for such watches on the secondary market is still well above retail.
“We are adjusting to current economic realities,” Stracke added.
Interestingly, pre-owned watches continue to grow in popularity. The secondary market is expected to surge to $85 billion (€79 billion) by 2033, according to a recent industry report by Swiss firm LuxeConsult. Stracke also said the value of transactions conducted on Chrono24 increased by about 28 percent in 2022, before growth slowed in the second half of the year. The marketplace has about half a million watches for sale at any given time from 3,000 dealers and 30,000 private sellers. What’s more, Rolex and AP are also launching their own certified pre-owned programs to cater to vintage buyers.
Sounds like more ups and downs could be on the horizon.