Fri, 2013-05-24 00:00
Rolex,
Chorpard and Paiget, top the list of luxury watches collected by rich
Nigerians as alternative means of investment. The global trend, which is
gradually catching on in Nigeria, is seeing the rich buy vintage wrist
watches not just as fashion statements, but as alternative investment
items. The Nigerian market for vintage wristwatches is currently
estimated at only N80 million ($500, 000) with a high prospect of growth
in the medium to long term, according to those familiar with the
industry.
The wrist watches
targeted for investment purposes are rare time-pieces wich are often one
of a kind. Rolex, Chopard, Paiget and Patek Philippe, are among the
most collected brands of wristwatches in the country. The demand for
these brands is usually driven by the wristwatches’ condition, scarcity
and complications.
Complication means
special functions that the watch is able to perform and display. An
example of a complication is a moon phase display. Collectors prize
their complicated watches because they display useful information. More
importantly, a collector appreciates the innovation, skill, and
ingenuity that complications represent.
“Typically, Nigeria
is a brand driven market,” explains Ify Nonyelu, business development
director, Upfront & Personal, dealers in luxury wristwatches.
“Status therefore is highly regarded; names like Rolex Piaget, among
others, sell more than wristwatches of equal grade but from less known
brands. The brand names relate directly to the value placed on the
wristwatch in the short and long term. At Christie’s, a famous auction
house in the United Kingdom, vintage timepieces are the sixth largest
department it has, and this made more than $116 million in sales in 2011
according to Paul Sullivan, a luxury goods critic.
“A watch is a piece
of art in itself,” says Daniel Iroegbu, a watch dealer. High end
watchmakers have created an allure around their brands. The most
exquisite and expensive timepieces are collectors’ items any day. Brands
like Patek Phillipe and Rolex have attracted attention to their unique
designs.” It is not a surprise that the Nigerian rich are buying fast
into this novelty. They are doing so with the aim to make money, just
like anyone will collect the art works of renown artists such as Bruce
Onobrakpeya or Grillo.”
Smart high-end wrist
watch brands are already making in-roads into Nigeria to seize the
opportunity which this emerging market offers. “Nigeria is an emerging
market with a lot of brand attention,” adds Nonyelu. “Major brands are
franchising to Nigerian distributors because they realise that Nigeria
is awash with cash and very brand conscious people. The Nigerian market
thus offers the best growth opportunity for high end wrist watch
makers, especially with the economy of the rest of the world going
south.”
A timepiece like
men’s Rolex Stainless Steel Black Dial Daytona, which currently sells
for N2. 61 million ($13, 592) could costs 30 percent more in a year or
two, say analysts familiar with the vintage wristwatch industry. Another
wristwatch brand Hublot Big Bang 44mm from Hublot watches, which
currently sells for N3 million ($18,900) a piece, is also expected to be
worth 30 per cent more in one or two years. Collectors disclose that
like old wine ,the older the make and date of the wristwatch, the more
expensive and valuable the watch becomes. In 2012, the most expensive
wristwatch sold at an auction was a 1928 Patek Philippe chronograph,
which was sold in Geneva for $3.6 million, according to online reports.
Nonyelu however
cautions that collecting wristwatches as investment item is a very poor
option, as they do not attract reasonable value unless they were owned
by celebrities.
“There is no guarantee the way the price of these items will swing in the near future,” adds Nonyelu.
“It depends on who is
selling and who is buying. Since they are not fast moving commodities,
pricing is mainly dependent on non-economic factors, like perception and
the ego and cash profile of the buyer at any point. High-end wrist
watches do not really count as good investment because it is very
difficult to convert them to cash at even purchase value. Relatively,
real estate, government bonds are far more liquid, far better storage of
value than wristwatches.”
Collectors however
have an option to pass on vintage wristwatches to their children who
usually cherish such gifts. Rasheed Gbadamosi, chairman, RAG Ltd says he
inherited a Rolex wrist watch from his father which he wears
occasionally. “I am not a jewellery person but I treasure the Rolex I
inherited from my father. He gave it to me shortly before he passed on.
He told me it will be useful to me some day. I still have it and I wear
it occasionally.”
