Like time itself, the universe of high-end watches is vast beyond comprehension. Its greatest paradox is that, in an age of cheap quartz movements and ubiquitous smartphones, when no one really needs an expensive timepiece, a single watch can sell for $10,000 to $1 million or more. Enough are manufactured to fill convention halls from brands including Rolex, Breguet, Patek Philippe; watches with hourly chimes, watches that display phases of the moon, watches with sophisticated inner mechanisms that compensate for the pull of gravity.
Each is a miracle of engineering crammed with hundreds of parts machined to space-age tolerances. Not one, not even the handcrafted $1 million marvel, tells time quite as well as the average bargain-basement quartz model on sale at the drugstore for $19.95.
“The time is secondary,” says Rolex dealer Paul Altieri. “I tell people, ‘If you want a watch that’s going to be extremely accurate, go buy a quartz or electronic digital watch. Don’t buy a Rolex.”
Altieri, who sounds a little like the actor Joe Pesci, is the witty, 57-year-old owner of Bob’s Watches in Huntington Beach. Both a dealer and a devotee, he shows off a personal collection with the happy satisfaction of a man displaying diamonds. Here is a vintage Daytona – the type of Rolex worn by Oscar-winner Paul Newman – featuring a black dial and three contrasting sub-dials; it’s worth at least $75,000, Altieri says. Here is a Rolex Submariner known as the James Bond; Sean Connery wore the same model in the 007 films of the 1960s. Here is Altieri’s everyday watch, a 2007 Rolex GMT (for Greenwich Mean Time), a dual time-zone extravagance notable for its heavy-duty steel bracelet and scratchproof black ceramic bezel.
“This watch will be around for over 100 years,” Altieri says.
Rolex’s enormous worldwide popularity, coupled with Orange County’s craving for luxury timepieces, inspired Altieri to introduce a new wrinkle into the market: an online exchange where the brand’s many models and variations are traded like stocks on Nasdaq.
By one estimate, Rolex offers 3,200 combinations of features on its new watches alone – different compositions (steel, gold, platinum), case sizes, bezel types, bracelets, straps, dial colors, date displays, numeral markers and more – and, when added to a century’s worth of previous models and styles, many of them collectibles, the number of possible choices becomes mind-boggling.
Altieri doesn’t offer them all, but the exchange is one place to see a cross-section of the huge secondary Rolex market. Watches are shown on the website, Bobswatches.com, alongside “buy” and “sell” prices. A scuba-diving watch, for example, the Rolex Sea-Dweller, was available on a recent morning for $8,125; someone who already owned the watch and wished to sell it could have done so for $6,500.
The open pricing, which reveals Altieri’s mark-up, helps ensure fairness, he says. While prices do not fluctuate every moment, as Wall Street stock values do, Altieri adjusts them as needed to keep the merchandise moving, essentially giving free play to the market.
Customers trade from all over. North Carolina resident Sandra Shaw cashed in two watches from the 1960s that had been owned by her late husband. He wore one of them every day, even in the shower, for 45 years.
“I’ve got knees and hips that haven’t lasted that long,” Shaw quips.
Florida’s Tommy Haskell used the exchange to replace a treasured Rolex he had sold when times got tough in auto sales. The Tridor Masterpiece Meteorite was unusual, featuring diamonds, three types of gold, and a face consisting of particles from an actual meteorite. New ones retailed for more than $60,000. Haskell looked at a number of used models before buying from Altieri at $30,000, the lowest price he saw.
“I grabbed it as quickly as I could,” he says. Why? He appreciates the extraordinary machinery of a fine timepiece. He also likes the cache of wearing a Rolex, and the glittery beauty of this one in particular. “I wanted … an over-the-top statement watch,” the 46-year-old Haskell said. “Only a few people in the world have something at this level.”
An exclusive club
For men, especially, who tend to avoid fancy jewelry, the watch is a means to flaunt their success – to proclaim, without saying a word, I have made it. High-end dealers compare wearing a Rolex or a Vacheron Constantin to driving a Ferrari. The difference is, when you reach the restaurant, you can take the watch inside.
What dealers rarely point out is that no one may notice. Unless the watch is encrusted with diamonds – and most expensive watches are not – a timepiece worth more than a Lexus may appear not very different from a watch barely worth a bicycle. A truly great watch may blend in with every other watch in the room.
Altieri tells the story of getting together with London author James Dowling, a noted authority who co-wrote “The Best of Time: Rolex Wristwatches, An Unauthorized History,” soon after Altieri launched his exchange. The men met for lunch at a hotel in Beverly Hills. As Altieri remembers, Dowling reached for his sandwich in such a way as to deliberately reveal an incomparable old Rolex Submariner hidden beneath his shirt sleeve – a rare collectible designed especially for the British military, and worth perhaps $150,000.
“I said, ‘Time out! Time out!'” recalls Altieri. His first question was, “What have you got on?” His next was whether Dowling worried about whether someone might try to rob him of such a costly timepiece. “He said, ‘No, you and I are probably the only guys in the whole hotel that know what this watch is.’
“Nobody would know if it was a $10 watch or a $250,000 watch. That’s what is so fascinating,” Altieri says. “But the people that know, they know immediately.”
Watch people, then, inhabit a kind of private world; they form a clandestine brotherhood hidden in plain view. Altieri, who previously was in the gold business – he owned a chain of GoldEx stores – became interested in fine watches as customers came in, asking to know what their old Rolexes were worth. He was amazed to learn that he was in the middle of one of the world’s hottest markets – as evidenced by Rolex’s move, in 2008, to open one of the world’s first dedicated Rolex shops in Orange County to augment its global network of authorized retailers. It was the first boutique in the United States that sells only the Swiss-made watches and nothing else.
“They could have opened up anywhere – in New York, Chicago, Miami,” Altieri says. “Where do they open? Not L.A., not Beverly Hills. Ten minutes down the street at South Coast Plaza.”
Rolex is far from alone there. South Coast Plaza now houses no fewer than 10 shops where it is possible to lay out $50,000 or more for a wristwatch. With their glass and mirrors and attendants in white gloves cradling timepieces as if they are newborn babies, the boutiques offer horological treasures produced by watch manufacturers from A. Lange & Sohne to Zenith.
A golden age of watchmaking
The industry’s explosive growth in the early 2000s resulted in one of the more amazing statistics in retailing: 120 companies were crafting watches priced at $100,000 apiece, says James D. Malcolmson, a San Francisco-based writer and editor for the Robb Report, a magazine devoted to luxury. Malcolmson, who conducted the count just before the recession, says the number “may be somewhat lower now, but it’s still a remarkable figure – a striking figure. The last 15 years have been a golden age for mechanical watches.”
To a connoisseur – and collectors abound – each brand has characteristics as distinctive as the markings of a butterfly, often melded with a rich company history. At Traditional Jewelers at Fashion Island in Newport Beach, watch specialist Molly Finnerty points out overt and subtle differences between Rolexes, for example, with their clean lines and rather sporty look, and aviation-inspired Breitlings, tricked out with dials within dials, some featuring stopwatch functions, tachymeters for calculating speed and distance, and even altimeters.
One glass case held rows of genteel Patek Philippes, created by a Swiss company founded before the Civil War. Britain’s Queen Victoria wore a Patek Philippe. A yellow-gold Patek Philippe that displays phases of the moon sold at auction three years ago for $5.5 million.
“I consider them the king – No. 1 in our industry,” Finnerty says of the Pateks. “Every single piece is handcrafted.”
Nearby was a skeletonized Audemars Piguet, a watch designed with much of the steel case cut away to reveal moving parts. German-made watches by A. Lange & Sohne are so exclusive they are available only in gold or platinum; they sell for $20,000 to $1 million. One – a sort of sacrificial lamb – was dissected and mounted, allowing prospective buyers to admire the intricate engraving on internal base plates and the balance cock.
The point of the painstaking work seems elusive; clearly, watchmakers “don’t have to do it,” store manager Brent Seyler says. “They choose to do it.”
Wealthy men and women who wander in from their homes on the Newport Coast and elsewhere may or may not care about such touches. Seyler recalls a gentleman who plunked down $130,000 for a Patek Philippe because the crocodile strap perfectly matched his belt.
A host of complications
Other buyers want complications. In watchmaking, complications are a good thing. They are those extra functions, like the moon-phase display, that go beyond merely telling the hours, minutes and seconds. A mechanism that displays the day of the week is a complication. The stopwatch feature is a complication. Ingenious watchmakers have been piling them on since the Renaissance – almost since watches first evolved from spring-powered clocks. Some show when the sun rises and sets. Some track the date for centuries, allowing for leap years.
February’s Robb Report spotlighted a $39,000 Ulysse Nardine Sonata Streamline travel watch with side-by-side main dials – to be set for two time zones – and a wake-up alarm. “While most wristwatch alarm functions employ a relatively simple buzzer system,” the magazine noted, “Sonata’s alarm sounds like a cathedral gong.”
Patek Philippe unveiled a pocket watch in 1933 known as the Supercomplication because it offered 24 features. A sub-dial even showed constellations in the night sky as seen from the home of the banker who commissioned the timepiece.
The most complicated wristwatch ever made is said to be a Franck Muller Aeternitas Mega 4 with 36 functions and nearly 1,500 parts. Like many top watches, it boasts a tourbillon, a surprisingly old device, invented more than two centuries ago, that reduces gravity’s effects on timekeeping accuracy. A tourbillon consists of a rotating cage with key parts of the movement mounted inside it.
The controlled rotation prevents gravity from exerting a constant pull from a single direction. While a tourbillon cannot improve a mechanical watch to the uncanny accuracy of the electronic quartz watches that began flooding the market in the early 1970s, the revolving cage, with the balance wheel oscillating inside it, is mesmerizing to behold; for aesthetic reasons, a tourbillon is always exposed to the eye.
“You can see it through the dial,” says Malcolmson, the Robb Report writer. “It’s the beating heart of the watch.” A watch so equipped looks as if it is alive, as if you’re peering in at the pumping heart of a small bird – and they are priced accordingly. A decent tourbillon watch runs $60,000 and up. At January’s Salon International de la Haute Horlogerie, a major annual show in Geneva, Cartier wowed the world, Malcolmson says, with a “mysterious” double tourbillon – mysterious meaning that the watch hands appear to float and move on their own, while the tourbillon rotates on two axes.
“Cartier was far and away the best watch at the show,” the writer says.
The quartz crisis
Quartz watches, which mark time using the high-frequency vibrations of a crystal, are typically accurate to within half a second per day. Standards for top mechanical watches are lax by comparison; a Rolex or Breguet must only be accurate to within four to six seconds a day. Over the course of a month, the difference can be meaningful: 15 seconds versus two to three minutes.
The onslaught of cheaper, more-exacting quartz watches forever changed the industry. Hundreds of manufacturers closed, particularly in Switzerland, the locus of fine watchmaking since World War II. Eventually, though, attitudes shifted; the watch became more than merely a functional device as buyers gained more appreciation for its higher aspirations – the beauty of the endlessly varying designs and, equally important, the technical wizardry needed to assemble a machine from gears smaller than a dime and from screws barely visible without a microscope. The craft took on the feel of art.
Far from dying because of the “quartz crisis,” high-end watchmaking actually began to boom. By 2000, “the numbers were outrageous,” says John E. Brozek, a longtime Florida watch dealer and author of “The Rolex Report: An Unauthorized Reference Book for the Rolex Enthusiast.” Buyers would wait for more than a year to purchase a Patek Philippe for $35,000, knowing they could sell the same watch for $40,000 the next day to someone unwilling to suffer a waiting list. Then came the recession; the market collapsed by 30 to 40 percent, Brozek says.
Now a new boom is happening – bigger than ever, according to some in the industry. Chinese buyers eager for Western luxury cars, wines and watches have offset the residual softness of the high-end market in Europe. Watch lovers have gravitated toward the very best – heirloom pieces with original boxes and paperwork, $50,000 watches that will appreciate in the way that Hockneys do.
“There has been a flight to quality,” says Dowling, the London author. “Massively complicated watches are being made in quantities that nobody ever thought of and sold at prices nobody ever thought was possible for watches.”
Rolex’s biggest problem at its South Coast Plaza boutique is keeping watches in stock, says Terry Weiner, president of Baron & Leeds, which operates the store. “We never have enough watches.”
Though Rolex broke a company record last year – it produced more than 750,000 watches, easily the most among high-end Swiss manufacturers – there remains a worldwide shortage, Weiner says.
Rolex is a case study unto itself:
It’s the No. 1 seller in the high-end market and a company that has resisted the chase for more and more complications and futuristic designs. Instead, the venerable firm, founded in London in 1905, has built an empire on relatively simple watches that, despite scorching desert heat or driving snowstorms, will continue to give you the time – today, tomorrow and 50 years from now. The firm has taken that concept and marketed it to the hilt.
The watch that climbed Everest
After moving to Geneva near the end of World War I, Rolex made a pivotal strategic decision to directly participate in historical events. Test pilot Chuck Yeager broke the sound barrier in 1947 while wearing a Rolex. Sir Edmund Hillary and Tenzing Norgay became the first men to scale Mount Everest in 1953 wearing Rolex watches. A U.S. Navy bathyscaphe plunged nearly seven miles to the deepest place on earth, the floor of the Mariana Trench, in 1960, with a specially developed Rolex was strapped to its hull – a publicity ploy reprised last year when filmmaker James Cameron made the first solo dive into the same trench, also transporting a Rolex.
“The one coup they missed out on: Omega got to be the first watch on the moon,” says the author Brozek. Buzz Aldrin wore an Omega Speedmaster when he followed Neil Armstrong onto the lunar surface in 1969 – a fact that has boosted Omega revenues ever since. (Versions of the Omega Speedmaster Professional Moonwatch sell online for $3,500 to $6,000.)
Still, as a marketing force, “Rolex is leaps and bounds ahead” of everyone else in the industry, says Brozek, “and there’s not even a second best.”
The company controls more than the message. Rolex forbids its dealers to hold sales or to make repairs using non-Rolex parts. If you buy a Rolex watch with diamonds, the authorized dealer will not tell you the carat weight of the gems, because Rolex does not supply the information. Such secrecy rankles Richard Baron, a Newport Beach used-watch dealer and retired executive director of the National Association of Jewelry Appraisers. Diamonds typically add thousands to the cost and consumers deserve to know what they are getting, he says.
“Any company that is selling you an expensive item and will not give full disclosure has something to hide,” Baron says.
Keeping the carat weight a mystery makes it more difficult to create forgeries, points out Finnerty of Traditional Jewelers. Counterfeit watches, especially Rolexes, are considered a massive problem. Brozek estimates that fake Rolexes may outnumber real Rolexes by 10 to 1.
Regardless, Rolex’s reputation for secrecy is well-entrenched. As Annie Berkowitz, a spokeswoman for Rolex USA in New York, put it when asked about these issues, “Rolex doesn’t do interviews. It’s very private company.”
Dowling would agree. While researching his book on the brand, he found Rolex to be about as impenetrable as the Kremlin. “There are all these rumors” about who owns the company and how it is run, he says. In actuality, Dowling says founder Hans Wilsdorf left the company to a foundation that diverts profits to charity.
Altieri says he is glad the watchmaker so diligently protects its name and reputation. He is not constrained by the rules that apply to dealers of new Rolexes. The exchange traffics only in used watches, but that segment of the market, a pool filled with timepieces produced over decades, is huge and growing – propped up by the lofty quality standards of Rolex and its competitors.
Every new model or improvement that comes along ends the production for a previous version, turning the old watch into a limited-edition collectible. Sitting outside a coffeehouse, Altieri points out years of refinements – the re-styling of a winding stem, a new way of attaching a steel bracelet, a tweak in the color of the hands. He shows off a diving watch someone cashed in – a 1950s-era Rolex with a yellow dial and a cracked crystal. The seller had found it somewhere on the sea floor.
“Does it still work?” a reporter asks.
Altieri scowls. “Aah, I don’t know.” He lifts the watch, shakes it once, and winds it.
He grins.
“Look at that,” he says. “See that second hand moving? Look at that! That’s been at the bottom of the ocean.”
Contact the writer: 714-796-5031 or dferrell@ocregister.com
