WHITEWALL: You founded Crown & Caliber in 2012 as an online site to consign and collect luxury timepieces. From where did your interest in watches stem?
HAMILTON POWELL: My background is in private equity. And one business we were involved in was the retail space. Through that, I learned a lot of what was going on in e-commerce. But there was a cottage industry that focused on re-commerce, using the Internet to sell your stuff. There were of course eBay and Craigslist, but there were small niche sites coming up as well. So as I analyzed this niche industry, the question was, what assets could be attractive from a re-commerce stance? It had to be small so it was shippable. It had to be valuable so it was worth the time and energy. And watches was a really obvious candidate. We started Crown & Caliber three years ago with that idea and two employees. Now we have over 30 employees and we’re servicing thousands of buyers and sellers. We’ve become the preferred marketplace for luxury pre-owned watches online.
WW: Before Crown & Caliber, what was the option for a buyer or seller for watches on the secondary market?
Courtesy of Crown & Caliber
HP: If you wanted to sell a watch, you kind of had to do it yourself online through places like eBay or Craigslist. Or you would go to local brick-and-mortar dealers. The problem with those scenarios is that you’re relying on your network to sell. On the other side of that, not a lot of people want to buy a $10,000 watch from a person who can’t authenticate it. So you sold online often for distressed lower prices. And selling to a retailer, they are buying it for X so they can flip it for Y.
WW: So what do you offer for sellers?
Courtesy of Crown & Caliber
HP: We get an individual’s watch in our facility, we tell them how much we can sell it for, and establish a reserve. Then it goes to our watchmakers, who take all the scratches and dings out, fully service it, professionally photograph it, and then we sell that watch within 30 days.
WW: And this is not an auction site, right?
Courtesy of Crown & Caliber
HP: Right. It’s listed and sold at that reserve.
WW: So what do you offer to buyers that wasn’t there before?
Courtesy of Crown & Caliber
HP: From a buyer’s standpoint, it was just a difficult item to buy pre-owned because of the certification. How would you know it’s real? And a watch can be 90 percent real; it can have an original movement but fake hands or a fake dial. Because that watch goes through our 45-point inspection process (we have six full-time watchmakers), you can buy with confidence. There is a return policy and warrantee that is standard in the retail industry, but for some reason had never occurred in the pre-owned secondary market.
WW: What are the brands that have a good resale value on the secondary market?
HP: The depreciation in the watch world is fascinating. When you buy a car, drive it off the lot, there is an initial hit, and then it depreciates each year. With a watch, it has that initial hit, but once it is in the pre-owned market, its value is relatively steady and doesn’t continue to depreciate it. When you get into it from a brand-by-brand standpoint, that initial hit is very different. Rolex, Patek Philippe, and Jaeger-LeCoultre are very popular brands and hold up very well.
I would say that one of the things that a lot of people mistakenly believe is that watches are an investment. Ninety-five percent of watches depreciate. There are vintage watches that appreciate—like the Rolex Paul Newman Dayton, an older limited edition. Very few modern watches appreciate in value. Lange & Söhne, Bremont—those brands are very strong in the pre-own market because they are smaller niche brands that people are discovering and loving. On the other side of that coin, some brands don’t hold their value very well, and those brands tend to use precious metals, gold, diamonds.
WW: What are some of the brands that are gaining in the U.S. market among American collectors?
HP: I think the German industry in general is really on fire now. A. Lange & Söhne is one of my personal favorite watches—it’s a watch that when you hold it, you know it’s a really well-engineered, incredible piece. Aside from brands, there is a huge push toward vintage right now, where brands like Heuer (pre-Tag) from the sixties and seventies are re-emerging. I think it follows men’s fashion trends in general.
This article is published in Whitewall‘s winter 2016 Lifestyle Issue, out now.
