A millennial entrepreneur who runs a high-end watch retailer explains why now is the time to invest in watches - and which timepieces are the most valuable
- Avi Hiaeve, a millennial who owns the high-end watch retailer Avi & Co., spoke with Insider about the value of investing in luxury
- Hiaeve said those looking to enter the watch investing game should look out for four names:
Rolex, Audemars Piguet, Patek Philippe, and Richard Mille.
- As previously reported by Insider, most people look to the secondhand market to buy their timepieces, and vintage watches pretty much dominate the sector.
- Hiaeve said it's impossible to be priced out of the watch game because there's a watch at every price point for everyone. To sum it up: The people who want a Rolex will always buy one.
- That statement was proven true amid the pandemic, where high-net-worth-individuals have continued to splurge on luxury watches and items.
- For example, the Sotheby's Important Watches live auction concluded on December 15 and brought in $10.4 million — up 27% from last year — with a Patek Philippe Ref 2499 retailed by Tiffany & Co. selling for $818,600.
It was a Wednesday night in February when Insider first met Avi Hiaeve at his luxury watch party in New York City's Midtown Manhattan. Jamie Foxx was the host, while Moët & Chandon was passed around; appetizers that included both caviar and chicken wings were served on small dishes. A rare Tiffany blue Rolex was situated not far from a Patek Philippe, and diamonds - lots of diamonds - lined the back walls of the room.
The shindig's environment (and the young crowd it drew) was proof positive that people still love luxury watches - and love splashing out major cash on them. Amid the uncertainty of the pandemic, high-net-worth-individuals have continued to buy pricey watches.
Signs of this trend were seen as early as April when GQ's Cam Wolf noted that Sotheby's had been selling more classic watches, even as major brands called off their plans to release new models. In fact, Sotheby's held an Important Watches live auction last Tuesday that brought in $10.4 million - up 27% from last year - with a Patek Philippe Ref 2499 retailed by Tiffany & Co. selling for $818,600. Other standouts from the auction: A Cartier Ecran Mystery Clock that went for $564,500, and a Rare Salmon Dial Audemars Piguet Royal Oak selling for $441,000.
"In the market, there are watches for everybody. If you want to spend $5,000, you're going to find yourself a $5,000 watch," Hiaeve told Insider. "The celebrities and the artists and all of them, they're not wearing watches under $100,000 anymore, everything they want is over $100,000. It's really gone through the roof."
Birkin bags, Basquiat paintings, and Richard Mille watches
Born in Israel, Hiaeve, 35, grew up in Queens, New York. At 16 years old, he opened Avi & Co., an exclusive high-end retailer that now caters to some of the notable names in the world - Foxx, Nicki Minaj, and Justin Bieber, to name only a few. His family has always been in the jewelry business, he said, but the watch industry is where he truly found his calling.
"Jewelry was something my family was doing, so it was easier to learn it. But watches, this is something that came from a hobby," Hiaeve said. "I used to love watches and play around with them. And you know what? I just felt like they were good investments. After a while, it became my main business."
Most of Hiaeve's clients come from word of mouth - basketball players, rappers, and football players flock to him because they're referred by existing customers.
In addition to the hype around owning a Rolex or Richard Mille, he said, most understand that many luxury watches hold good investment value, like a Birkin or a Basquiat. These are all high-end, quality goods that have historically proved to retain the value paid for them or even become more valuable over time, often significantly.
"A lot of people turn from a hobby to a business in the watch game," he said. "A lot of collectors that I know that used to buy from me, after a while they started buying for investments - buying, selling, and trading."
Though Bain reported in November that the luxury goods market has fallen 23% to $265 billion this year, very expensive items such as Hermes bags have long had a timeless quality, relatively untouched by financial discord and market downturns.
And people love the brand as much as they ever have: When Hermes reopened some stores in mid-April after months of widespread closures amid the region's coronavirus lockdown, the brand brought in a whopping $2.7 million in just one day at its flagship store in China alone.
In October, Hermes released its Q3 finances, revealing it beat expectations with $2.1 billion third-quarter sales, boosted by demand in Asia. WWD's Mimosa Spencer reported in October that HSBC analysis estimated a constant rate growth of only 0.4% for the period, but Hermes saw 6.9%.
Hiaeve said Richard Mille is the Hermes of watches, and the brand just released a $310,000 Chronograph, touted by the brand to be one of its most technically complex timepieces. On the resale market, Mille consistently goes up in value. Hiaeve told Insider he's seen some go from $100,000 to $120,000, up 20% to 30%, every few months. Celebrity watch collectors clearly agree:
The resale market is key to the watch sector. Deloitte's 2019 "Global Powers of Luxury Goods" found that the average annual sales from the top 32 watch and jewelry companies topped $2 billion in 2017, and a 2018 Bain report stated that the secondhand market was worth nearly $25 billion, with watches and jewelry making up over 80% of all secondhand market purchases.
The next best investment after Richard Mille, Hiaeve said, is a Rolex. Not just because they are beautiful, but because they also retain their value. From there, Audemars Piguet - Bieber bought one in 2019 for $50,000 as a "lil wedding gift" to himself. Patek Philippe is also a solid choice - Jay-Z owns one worth at least $2.2 million.
"[Richard Mille is] the most expensive," Hiaeve says, before revealing that he sold one for almost $3 million. "It's not just the craftsmanship, it's the supply and demand. They only make maybe four or five thousand watches a year. So you can't really get them."
Wealthy people are still buying watches amid the pandemic
Adam Golden, the owner of Menta Watches, told GQ's Wolf back in April that while his overall watch sales had declined, the pandemic brought new opportunities his way - like a German client who wants to "park some money" in a $300,000 portfolio of watches instead of in the stock market and requested Golden's help putting that portfolio of "stable watches" together.
Before the coronavirus pandemic hit and destabilized global financial markets, the luxury sector was still recovering from the impact of the Hong Kong protests, which saw Swiss watch imports to the region decline by 26.8% in comparison to 2018. Facing the coronavirus pandemic, the luxury watch industry was preparing for its worst year yet.
In March, Rolex shut down all of its Swiss factories, while Richemont, the luxury conglomerate that owns Cartier, had discounted secondhand pieces on its vintage resale site, Bloomberg's Corinne Gretler reported at the time. Watch fairs throughout the world were called off, while smaller and newer brands braced for impact to their bottom lines.
That was then. Now, the so-called "K-shaped" recovery is taking hold, where the high end is thriving as smaller businesses and poorer workers fare worse and worse. For watches and in luxury, the big names, with their proven investment value and timeless appeal, are intact.
It goes back to the mantra mentioned before: Pandemic or not - those who want to buy a Rolex, or an $800,000 Patek Philippe, a $2.2 million Richard Mille or a Salmon Dial Audemars Piguet Royal Oak $441,000, will always find a way to get one.
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