Corona-effect on the Second-hand watch market

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 and launches have been called off. As a result, many traders, dealers and collectors are left wondering is now a good or bad time to buy luxury watches?

Many Swiss manufacturers and shops have closed

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 and rarity. If the Rolex factory has closed for now, and it has, that means the number of new Rolex watches begin 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 and stock market crash, this has affected production as well.

Online Shopping

BBC reports a 12% in online sales UK wide

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 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, and 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 travelers to self-isolate for 14 days on arrival in the country.

Liquid Assets

Gold, Silver, Platinum, as well as Diamonds are often seen as “safe-haven” investments

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.

Our recommendation is the same to any that find themselves in a bear market, with value begin whipped off assets classes that must bounce back. If your business is in the 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 and having to provide much paperwork. We have provided many stop-gap loans for businesses to help them with cash flow in this challenging time.