Covid Impact on the Second-Hand Watch Market

Jun 11, 2020 | Watches

The luxury timepiece industry, much like large parts of the economy, has been hit hard by the effects of Covid-19. Many Swiss watch factories have closed, sales of new items have slumped, shops have been shuttered, launches have been called off. As a result, many traders, dealers collectors are left wondering now is a good or bad time to buy luxury watches?

For those that know the second-hand watch market, they know prices of second-hand items are linked, strongly, to the yearly production of new items rarity. If the Rolex factory has closed for now, it has, that means the number of new Rolex watches being manufactured this year will be sharply reduced. In ten years, it will be likely a 2020 Rolex will be worth a lot more than 2019 because only 50,000 of them were made worldwide. Unlike the last economic crisis, which was a ubiquitous banking stock market crash, this has impacted production as well.

Second Hand Watches – Online Shopping

As the British economy slowly starts to open, we see a few trends starting to form. Online businesses are doing better than ever, with customers showing a willingness to buy more expensive items online. One watch, a Patek Philippe Grand Complications Calendar Manual Gold, ref 5270G-014, topped the list of the most expensive watches sold on the auction site (eBay) in 2019. This trend has only increased during the lockdown, with an increase of 12% in online sales across all British industries, reported by the BBC.

Many countries, like China, are finding it much easier to buy online than from local traders who, in the past, would buy in the UK, fly back home to China, sell to the local market. Now, these traders find themselves unable to fly, or if they can, they may face extended quarantine once they arrive. The UK has just passed a law requiring all international travellers to self-isolate for 14 days on arrival in the country.

Liquid Assets

Typically, in any crisis, we see a significant increase in the value of assets you can hold. Gold is one of the only commodities to go up in the Corona crisis. Despite the mid-March fall in the gold price, in tandem with the stock crash, the typical safe-haven asset is on the rise. The market appears convinced that it is on a steady upward trajectory. The second-hand market for luxury watches is often dominated by the Chinese, who more than ever want to be holding their wealth in anywhere that is not a bank.

Gold, Silver, Platinum, as well as Diamonds, are often seen as “safe-haven” investments. Our recommendation is the same to any that find themselves in a bear market, with a value beginning whipped off asset classes that must bounce back. If your business is in a position to buy, now is always the right time for a good deal. If your business, however, needs a fast cash loan, a pawnbroking loan from a London Pawnbroker can be ideal for carrying you over this period of low sales without going to your bank having to provide much paperwork. We have provided many stop-gap loans for businesses to help them with cash flow in this challenging time. Alternatively, you can sell your luxury watch to us.

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