‘Beautifully constructed machines’: Prized wristwatches stand test of time

In February, investor and ardent watch collector Kevin O’Leary posted a video that showed him tearing up over his latest acquisition, a custom octagonal Audemars Piguet Royal Oak wristwatch that likely cost well into six figures. Extolling the virtues of “something so coveted, so hard to get,” he showed off its red second-hand, created to match his signature red watchbands.

Like a fine car, an exquisite watch is a marker of success, but collectors love them for many reasons. Some seek representative examples of particular timepieces; others view them as fashion accessories. O’Leary personifies the impulse to acquire something no one else could own.

And then there are the intangibles. Paul Newman’s personal Rolex Daytona 6239, for instance. Imbued with the allure of a desirable brand, Newman’s auto-racing connection and his Hollywood stardom, it became the world’s most expensive watch when it sold at auction for US$17.75 million in 2017.

“There’s the esthetic interest and the fascination with mechanics. Not only is this a beautiful thing, but it is also a beautifully constructed machine that requires meticulous craftsmanship in terms of assembling it,” says watch enthusiast Laurance Yap, creative director with Pfaff Automotive Partners in Toronto. “There is also the history and storytelling that go with it.”

Yap owns 15 watches, of which about half are what he labels “serious.” He started collecting 20 years ago; his early acquisitions included a TAG Heuer Autavia and a TAG Heuer Monaco, which is associated with the Monaco Grand Prix. One of his favourites is a modern remake of a 1950s Citizen Chronograph, which cost only about $350 but “looks really cool.”

Over the past few decades, short supplies of new watches and hopes of quick profit through resale have driven vintage prices up, and Yap explains that this speculation, combined with careful brand control, have made it difficult simply to walk into a store and purchase a new high-end watch.

When the opportunity arises, prices are steep. Yap estimates that a new Rolex Daytona would cost about $15,000 in steel, $40,000 in gold and up to $80,000 in platinum, with vintage models priced higher.

Many other brands are pricier; Patek Phillipe watches start around $40,000 and can go into seven figures. Luxury models can be (and frequently are) counterfeited, so look for reputable auctioneers of after-market watches, including Phillips, Sotheby’s and the German boutique Chrono24. Connoisseurs look for original boxes, paperwork and receipts.

It’s common for collectors to fall in love with certain brands.

Brad Meiers, CEO of the wealth-management technology firm Portfolio HiWay Inc. in Toronto, is a special fan of Panerai watches, which were originally designed as dive watches for the Italian navy.

“The Panerai has got a very strong face,” Meiers says. “The crown [the winding button] is protected, and most of them have a stainless-steel part that protects the bezel [the ring around the dial], so you’re less likely to scrape or break the crystal.”

Panerai watches are somewhat affordable, as luxury watches go, ranging from about $7,000 to upward of $50,000. Meiers has five or six of them that he matches to his suits.

“If it brings you joy and you can afford it, you should do it,” he says. “I don’t wear any other jewellery; for me, this is my jewellery.”

Terry Shan, creative director of Terrycrafted, a custom leather-goods retailer in Toronto, turned his watch fascination into a career. He left the investment field in 2021 to start a bespoke watchband business, crafting unique straps for luxury watches in rare leathers.

Early in his working life, he graduated from Swatches to an Omega Seamaster Chronograph worth about $5,000, which cost him $2,000 used, plus about $600 for restoration.

His most prized watch may be the Omega Genève that he reconstructed after searching for replacement hands, case and watchstrap buckle in an effort to re-create his grandfather’s timepiece. “It’s not the most expensive or the rarest watch that sometimes means the most, but it’s the story or the sentiment behind it that you can’t buy,” he says.

While most people judge a watch by its face, Shane Ede starts from the inside. He is one of a rare breed, an independent watch repairer, who works out of his Toronto home. He fell into the profession almost by accident, training with a veteran watch expert in the 1980s.

At that time, innovative quartz technology was causing a crisis in the Swiss watchmaking industry, he says, and efforts to bolster the perceived value of traditional timepieces resulted in a boom in vintage watches: “That’s how the idea that watches could be an asset took shape,” he says.

 

Around the same period, watchmakers moved to machine manufacture. Previously, “tool and die makers would make the stamps that they would use to cut out the parts. Then there would be someone who would take away the burrs from the stamping process. That was all done manually; it was a huge cottage industry in Switzerland. That’s all gone,” Ede explains.

“The zenith of the Swiss watchmaking industry was probably in the ‘40s and ‘50s, maybe even the ‘30s.”

Meanwhile, the manufacturing business has contracted. Richemont Group, Swatch Group and other makers have absorbed numerous brands, including A. Lange & Söhne, Cartier and Omega. Furthermore, many famous brands use the same movements, or inner workings. Selita and ETA are well known manufacturers of movements commonly used today.

Older watches may contain other movements, like the AS 1361, made by Swiss manufacturer A. Schild, which Ede says are among “the best that were ever made.” He laments that parts for some of these excellent older watches are running out: “There are many types of watches that we can’t repair any more because the companies won’t supply parts.”

Speculators hoping for easy profit may be disappointed, but the true value of a fine timepiece is a personal thing.

As Kevin O’Leary says: “Never listen to the critics. … You listen to your heart.”

More from Canadian Family Offices:

• Anatomy of a deal: advice on acquiring a company
• The right reasons – and a big wrong one – for starting a family office
• Donovan Bailey’s secret to success: investing in himself – and real estate
• Business owners, what should you pay yourself this year?

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