This morning it was announced that WatchBox —a secondary market-leading platform for buying and trading luxury timepieces— was investing in independent watchmaking brand De Bethune. WatchBox was launched at the end of 2019 by watch industry veterans Danny Govberg —CEO of Govberg Jewelers in Philadelphia— and Liam Wee Tay —former owner of Sincere Fine Watches the oldest watch retailer in Singapore—, along with investor-entrepreneur Justin Reis to transform the pre-owned luxury watch category. As part of this venture, CMIA Capital Partners —a Singapore-headquartered private equity firm— led an initial investment of more than $100 million USD. to accelerate the growth of WatchBox during their launch.
Danny Govberg and Liam Wee Tay. Image courtesy of WatchBox.com
Considering that Watchbox evolved from the 103-year old Philadelphia AD Govberg Jewelers, having the financial muscle and capacity to invest in a watch brand is not necessary something unforeseeable. In the past, Govberg and WatchBox had amassed the largest inventory of pre-owned F.P. Journe timepieces anywhere in the world. If you check WatchBox’s website today, you will find 72 F.P. Journe watches offered for sale.
Now, could have Govberg been a silent partner of F.P. Journe for a long time and we just didn’t know it? Everything is possible. While I am just speculating here, just take into account that there’s really no other secondary watch dealer out there selling as many F.P. Journe watches online as WatchBox does.
Furthermore, this has now been going on for more than seven to eight years even before WatchBox was launched and while Govberg was selling their pre-owned inventory directly on their website. Everything from Chronometres a Resonance, Chronometres Souveraine, to Octas, lineSport, special limited edition pieces, and everything in between.
De Bethune is an independent watch manufacture established in 2002 and currently led by its founder Master Watchmaker Denis Flageollet and Pierre Jacques as its CEO. WatchBox and De Bethune confirmed that the investment has been agreed upon and signed, and closing will take place within the following days.
While the sum of this investment is unknown, I can assure you that Pierre Jacques —whom I know very well— wouldn’t allow just any small investment, but rather a really significant one. While what I gather from the press release is that this seems to be more of a strategic partnership with WatchBox pushing distribution for De Bethune moving forward, only time will tell what the real purpose behind this investment will be.
Now, when I think about this investment in De Bethune, I have to bring up one more time the relationship between F.P. Journe and WatchBox. As far as I know, secondary market prices for most F.P. Journe timepieces are heavily dictated by the prices offered on WatchBox’s website for said watches. With all the craziness going on in the watch market with the limited supply and the pricing bubble generated by the grey and secondary market watch dealers, I foresee that this will also be the case for De Bethune timepieces moving forward.
Taking into consideration that Rolex makes about one million watches a year and people are willing to pay two or three times the retail price for their watches in the secondary market, I can only imagine what pricing for De Bethune timepieces will be after this move. They will pretty much turn into just another watch brand you can’t have at retail like Patek Philippe, Rolex, and Audemars Piguet.
To put things in perspective, De Bethune makes about 100 to 200 watches a year and the demand for their timepieces is already through the roof. Now that WatchBox will give De Bethune additional exposure and the distribution of their timepieces most likely will be controlled by WatchBox, just imagine what their timepieces will be trading for in the near future.
Is this a good move for WatchBox? Of course, it is.
Is this good for end customers? No, it is not.
At the end of the day, customers will continue to get the short end of the stick, while the big grey and secondary market watch dealers make all the profits.
But are the watch brands also winning here? Of course, they are.
While many tend to say that the only ones that are winning under the current watch market situation are the grey and secondary market dealers, I have to tell you guys that you are totally wrong.
The frenzy around certain brands and watch models that the current pricing bubble has created, directly translates into higher levels of brand awareness, greater perceived value, and sustained desirability in the long term. KPIs that previously would only be attained through advertising. Ultimately, the ones really winning here are the watch brands.
And as far as we watch publications go, we are not even getting a short end of the stick from some brands like De Bethune who have benefited from the media exposure we’ve given them without any advertising allocation in eight years. As a matter of fact, we are actually getting no stick at all.
How are we supposed to make a living if the brands don’t feel like advertising anymore and they just want us to publish their press releases or talk about their novelties?
Well, thankfully there are still enough brands that will continue to believe in advertising and are not part of the fad or frenzy. To those still advertising —you know who you are—, I thank you immensely for continuing to support us. While I don’t believe in a ‘Pay for Play’ type of relationship between publications and watch brands, I do believe in reciprocity and we all have to make a living.
For more info on WatchBox click here and for De Bethune here.
