Second part of the interview conducted by Bruce B. for the launch of the "new kid on the block" Silverbird, with the two founders of 41Watch, Cyril D. & Stéphane M. You can find the first part of the interview here
Bruce : Thanks guys for your time, and all this information about you and 41Watch.
Stéphane : With pleasure. We should much insist on what a great human adventure it has been to launch this company. Today, next to the two founders, there is Fabrice taking on the role of the expert, Clement who is heading up digital content, social media and e-commerce, Mathieu in charge of sourcing, Maxime operating out of Geneva, and of course our watchmakers, Antoine, Hai and Michael, as well as Aurelie in charge of admin and financial planning. This is a real element of pride for us.
Bruce : Let’s talk about the current situation. What is it about the market? Are you guys operating normally?
Cyril : The situation is unprecedented from many viewpoints, and it is a drama for many. Lockdown is a necessity and we have to deal with it, personally, and as a company. As such, we have entered a 100% digital mode, which seems to work reasonably well. The reality is that all of our team is currently active, refreshing our website, answering clients, shipping watches, and producing articles on our blog. We are also spending time reflecting on our next move to enhance our service.
Stéphane : The market is far from being stalled, first because the market is international, and some parts of the world operate better than others. It is much true for the dealer market. The first week of lockdown in France was total chaos, as noboby had a clue, and then, things went back into shape, gradually. We have learnt to operate with logistics constraints, we answer the phone, and figure out ways to source watches and to deliver to our clients. We however have no physical contact with our clients for the time being. We will soon be able to do so when lockdown is finally (hopefully) over.
Bruce : How do you see the market in 2020? What are your perspectives?
Cyril : People that can tell where all this is going are very fortunate. These are unprecedented times, the crisis is global, it is very hard to come up with a definitive view. Manufacturing brands have stopped production, which will not help to distribute hot products already on a waiting list. Luxury watches are not a necessity, manufacturing brands are going to ache…One way or the other, things are going to get back into shape, but it will take time.
Bruce : Do you anticipate there will be opportunities to grab in the watch market?
Stéphane : For many reasons, we have never encouraged for our clients to develop this kind of mindset. We do not encourage speculation which we clearly differentiate from investment. One is a short term view; opportunistic, the other is a long term view…
Cyril : All the more that current times are very shaky, in a way the crisis could be deeper than 2008… That being said, as Stephane just mentioned, one should differentiate speculation from investment. For the benefit of all, we published back in 2018 a very detailed article in partnership with Fabrice Guéroux on investment in collectors watches (you can find the article here, in french, ed). We clearly focused on long term investment, with for starters, passion as a leading factor. Without bragging, this article is still one of the most popular on the topic in French language on the web. What is striking is how the arguments put forward are still true.
Stéphane : The reason this article is still up to date is that it states fondamentals that stay true over time. Our first and foremost principle is that we are dealing with people who are passionate in the first place. Stay away from this market otherwise… Then, the article goes in length on what makes the intrinsic value of a model. We made our case by focusing on our then existing catalogue, and developed a price analysis going back 2005. We only focused on prime models with exclusive characteristics. And this made our case…
Bruce : Recently, there've been, in the specialized press, some arguments pointing to safe-haven investments in the collectors watch market….
Cyril : That's true… We have not been overall impressed by the articles, by the way… They looked like more to an attempt to serve ones personal interests than anything else… The fact that people tend to focus on real tangible assets in crises is true… but that is as much as we can say. Another striking point which might be worth mentioning is that truly exclusive pieces have shown extraordinary resilience in the past. It has been the case in 2008.
Bruce : Which watches are we talking about?
Stéphane : Truly exceptional watches? Rolex Daytona Paul Newman for example…These watches have indeed overperformed the market during crises thanks to their exceptional characteristics. Evidently, these watches are out of reach to many of us. Without going that far, there are pieces which are exclusive as well and which have shown a lot of resilience. I am thinking about Patek Philippe Nautilus ref 3700, Audemars Piguet Royal Oak first generations (5402…). Exploiting this line of reasoning, focusing on models more reachable, there is something to be said about versions of models which have attracted collectors interest… And as such bear more resilience throughout cycles. I am thinking about early generations of Rolex Daytona Zenith (as opposed to ANY series of Rolex Daytona Zenith), first series of Rolex Submariner 1680 (red version) as opposed to any 1680….And so on and so forth.
Bruce : What advices would you give to your clients?
Cyril : To live up their passion fully! This is the starting point. And to adopt automatisms which will prove to be efficient over time. We can perfectly understand that spending large sums of money in collectors watches raises at some point the question of investment value and resale capabilities. There is no point there. As such, we will never insist enough on exclusivity and quality factors in your selection of watches. Besides, we forcefully insist on the fact that one should avoid to focus solely on references. This could prove to be a dangerous game. For obvious reasons, Audemars Piguet and its Royal Oak models are very much a trend nowadays. Thanks to the upc, oming 50th anniversary mostly. All parameters are aligned for prices to continue to raise, and I will not attempt to prove the contrary. This model is legendary, there are few models out there, and one could focus on smaller productions such as 15002, 14802, 14790 early generations… All these models are interesting, without omitting, of course, 5402 A, B, C and D series.
My point is that at times when a lot of people are focusing on the very same references, quality of products is not always a given. You can see way much too often service dials, altered dials, cases way too polished… I have many examples in mind. Our recommendation is to stay focus on quality as this strategy is the right one over time. Beware of attractive prices for top-seller references!
Bruce : Would you recommend specific models to your clients?
Stéphane : We devised recently in partnership with Eden Rocks- Saint Barths a temporary exhibit much similar to auction houses. This event was postponed due to COVID-19. For this occasion, we gathered two dozen of collectors models which all bear interesting characteristics and which are very pertinent over the long run. We tried to stay rather large on the price scale. All of the models we put together would be recommendations of ours. And in all cases, the watches are truly eye-catchers!
Cyril : This collection is truly a great source of pride to us. It took us 6 months to put the event together, carefully cherry-picking models that have an interest for our clientele. When one browses through the catalog, there is always a story to be told about each piece…Limited edition, tailor-made dials, first generation of reference,… And all top quality products…
Bruce : I guess that's a wrap ! Gentlemen, thanks again for you time!
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