This year, we celebrate the fifth anniversary of EsperLuxe. It’s been a whirlwind since we launched. In a relatively short period of time it feels like we just began yesterday yet started decades ago. In large part, these feelings come from how much the industry has changed in this period of time – the watch community is bigger than ever, indies are no longer niche, and there’s a wave of new watchmakers arriving on the scene.
It’s an understatement to say that 2019 to today has been an evolution in independent watchmaking. That implies slow, gradual changes. The last five years are a complete revolution – the end of one era and the beginning of another.
Today, we’re reflecting on how things have rapidly developed since we became involved with independent watchmaking. Especially focused on what we know and understand well – the market.
The beginning of something big
When we began working with indies full-time in 2019, independent watchmaking was rising, but still in its infancy in terms of general popularity. Many of the most coveted timepieces—watches that are extremely difficult to come by today—were mostly available at or below suggested retail pricing. Auctions were mostly quiet with regards to independent watches. There were a few big sales of George Daniels and other one-off exceptional indie timepieces, but mostly remained ultra-niche compared to the dominance of Patek, AP, and other “big” brands. At this time, Richard Mille and F.P. Journe began to arrive more and more in auction catalogs.
Things were changing though, and we could feel it in the air. Some of these early indicators included:
- The Philippe Dufour Duality No. 00 sells in October 2017 for nearly US$1m – a huge hammer price for an independent (not named George Daniels).
- The Watchmakers: The Masters of Art Horology curates a traveling exhibition to showcase thirteen prominent independent watchmakers in spring 2018, bringing horology enthusiasts together in Rome, Hong Kong, New York, and London.
- Phillips hosting a special “Independents’ Day” exhibition in April 2019 to showcase the best in 20th and 21th century independent watchmaking.
- The success of the “Independents’ Day” exhibition is determined almost immediately with the US$2.4m hammer price on a George Daniels Grand Complication pocket watch (previously sold for ~US$1m in 2012)
- Only Watch 2019 provided not only the highest price watch ever sold at auction (the Patek Philippe Grandmaster Chime Ref. 6300A-010 for ~US$31m), but also a huge hit for indies with Akrivia’s Chronomètre Contemporain selling for ~US$400,000, Journe’s Astronomic Blue for ~US$1.8m, and the De Bethune x Urwerk Moon Satellite for ~US$330,000.
At this stage in the development of the independent watchmaking market, most auction activity was focused on “historical” timepieces. This was primarily limited to the biggest names in independent watchmaking, “grail of grails” timepieces. Important to note, F.P. Journe, who now finds himself considered one of the modern legends, was turning the corner in popularity. Difficult to imagine now, but in 2019, a platinum Résonance sold at auction for ~US$65,000. Even more remarkably, the hammer price for that Résonance was roughly 50% higher than the estimate of US$24-48,000.
By the end of 2019, we see a more consistent stream of independent timepieces entering the auction market – MB&F, Urwerk, De Bethune, AkriviA, Journe. More than two or three indies per auction catalog, the market moves to having double-digit quantities of indies in Philips and Sotheby’s auctions by 2020.
Speeding toward the peak
During the very beginning of the COVID pandemic, things came to a complete standstill. Not only did most of the industry shut down, but of course, the market came to a grinding halt as well. And then, at the end of 2020 and beginning of 2021, things went from 0 to 100 very quickly.
Prior, the market for independent watchmaking was focused on a very limited supply of historical timepieces. Premiums on the secondary market were mostly nonexistent. By 2021, there was a much larger supply of indies landing in auction catalogs. In turn, the performance of indies at auction impacted their prices on the secondary market. We observe a slew of F.P. Journe timepieces fetching over US$1m at auction (especially early brass-movement models). Even in the next generation of great indies, Rexhep Rexhepi in particular, sees one of his Chonomètre Contemporain (CC) timepieces hammer at nearly US$1m in May 2023.
In this time period, the rise of independent watchmaking is recognized by increased share of auction catalogs. From 2021, Phillips or Sotheby’s auction catalogs consisted of roughly 10-20% indies – sometimes an even higher percentage. Phillips’ The Geneva Watch Auction: XVI in November 2022, as one example, features 46 lots from indie watchmakers and brands out of a total of 232 lots. What was a relatively niche segment of the auction market only a few years earlier, independent watchmaking burst into the spotlight. In some auctions, it was the independent watches that built the backbone of the auction house’s marketing – as was the case with the early Journe offerings and the Rexhep Rexhepi CC timepiece.
From our position, it became quite normal for collectors to buy sight unseen (something that wasn’t previously the case). There were very few timepieces that stuck around inventory for long and general supply of indie timepieces was quite scarce on the secondary market. To this day, the speed of the market was mind-blowing, lightning fast. Since then, things have changed and we have entered into something different.
Somewhere in between … for now
In retrospect, the peak of watch market prices and overall speed was probably at the end of 2023, or beginning of 2024. Everyone, both professionals in the industry and collectors tracking its course, knew that the market would eventually cool. And it certainly has.
Discussed with Paul Boutros, Deputy Chairman and Head of Watches, Americas at Phillips, we’ve entered a period in the market where things are significantly better for passionate collectors and enthusiasts of independent watchmaking. Speculators see the writing on the wall – ”watches don’t increase in value 25% year-over-year” – and they flush their inventory to avoid losses. Any quick glance at the secondary market online and it’s easy to see that there are a ton of indies available now. That was not the case a few years ago. With this, we’re certain it will usher in a new wave of collectors who were boxed out by huge premiums and auction results.
That said, this is not a return to the pre-2020 reality. There are no 25-30% discounts on many indies today. But there is a reversion to pricing that is much closer to original retail. Steep premiums on many timepieces are now reserved for only the most difficult watches to obtain. One way or the other, this is so far from some “apocalyptic” collapse that some have heralded. As far as we see things, this is only the end times for speculators and that’s okay with us.
Another key difference in the state of the market, compared with pre-2020, there’s much more depth in the independents than ever before. While the pillars of independent watchmaking have remained mostly constant (Urwerk, De Bethune, MB&F, Journe, Voutilainen, Akrivia, etc.), there are so many new, fast-growing watchmakers and brands. Everyone from Sylvain Pinaud to Felipe Pikullik to Remy Cools, these are ultra-talented watchmakers with impressive contributions to the tradition, still in the beginning of their journeys. More arrive on the scene on a monthly basis, it seems.
For us, the constant influx of new talent is one of the biggest indicators that the future of independent watchmaking is brighter than ever. In terms of overall market outlook, we’re experiencing something that is the exact opposite of the Quartz Crisis – when nearly the whole industry died in the 1970s and 1980s. This is a flood of ultra-capable watchmakers, ready to present their creations to the collector community and we’re very excited to see things move forward through the next five years of our own journey at Esperluxe.