WSJ Watch Auction Story Called ‘Unfounded’

A Wall Street Journal article’s allegations of an “alliance” between some Swiss luxury watch brands and Antiquorum auctioneers to boost the brands’ auction prices, prestige, and consumer demand are called “unfounded” and “misleading” by those in the story.

Osvaldo Patrizzi, founder of Antiquorum who left it in August, says, “There has never been any ‘collusion’ between Antiquorum and any watch manufacturer.”

The Oct. 8 front page article claimed international watch auctioneer Antiquorum S.A., Geneva, Switzerland, allegedly let some luxury watchmakers secretly “intervene” in its auctions to force up bids and sale prices on their vintage timepieces in order to boost their own market-perceived worth, retail prices of new watches, and demand by collectors and consumers. Alleged manipulation, claimed the article, involved helping organize the events and anonymous bidding by some brands on their own watches, especially at single-brand themed auctions.

Although the article names a number of top watch brands that “flocked to the auction market with Antiquorum and other houses” to use auctions as marketing tools, it focuses primarily on Antiquorum auctions of Patek Philippe and Omega watches.

The WJS article sparked what one online watch blogger called “some heated discussion in the [online] watch forums,” while the Web site Luxist.com said it raised “ethical questions about whether this is price fixing.”

However, some in the article challenge its accuracy and claims. Its allegations are “unfounded and inadequate,” said Béatrice Howald, head of media relations and spokesperson for The Swatch Group, the world’s largest watchmaker and owner of Omega, whose bidding at Antiquorum’s Omegamania auction was singled out.

Top luxury brand Patek Philippe “prefers not to validate misleading articles,” said a statement by Patek Philippe USA, declining further comment.

Antiquorum S.A. didn’t issue a statement, but spokesperson Karin Tasso said it’s “unfortunate the Wall Street Journal has gone down to the level of the boulevard [i.e. tabloid] press. Bits and pieces of sentences were taken out of context. That’s unprofessional.”

Patrizzi said there was “nothing ‘secretive’ or ‘ethically questionable’ ” about its auctions, which are “Swiss-government supervised,” and where watchmakers like Patek Philippe and Omega must bid “against multiple other legitimate bidders.” They and other luxury watchmakers “never made a secret of the fact that they buy watches for their [museum] collections and frequently announce their important purchases,” he said.

Patrizzi denounced the story in an Oct. 17 10-page, single-spaced letter to the Wall Street Journal, obtained by JCK, detailing what he called “distortions” and “errors.”

The WSJ story, for example, says, “The business of auctions for collectibles is not a model of transparency.” Patrizzi’s letter says, “Thematic auctions are transparent. In Switzerland, the law demands the presence of a government official, a judicaire, who presides over the entire sale” and keeps records of it. Also, he said, Antiquorum auctions are “rigorously followed by the trade press, collectors and everyone else in the auction world and watch world.”

The WSJ article implied retail pricing of some brands’ new watches is directly related to high auction prices for their vintage watches. That is “preposterous,” wrote Patrizzi. A comparison with past auctions of specific brands’ vintage timepieces “clearly” shows new watch prices “aren’t affected” by them, he said.

The article said Patrizzi’s own business began when he moved to Geneva, “at first peddling vintage timepieces from stands near watch museums.” “Totally untrue,” said Patrizzi. He was “already established in the watch business,” he said, being named “Horological Expert for the Italian Society of Antiquities” in 1966 and had “successfully opened two vintage watch shops” before coming to Geneva in 1973.

Others weighed in, too. Swiss business newspaper Finanz und Wirtschaft noted “one single auction house doesn’t represent the whole [$2 billion] collectors watch market,” and that “what is portrayed as a conspiratorial manipulation of the market merely reflects a practice of the big watch houses with which observers are already familiar.” For example, it said, Patek Philippe—cited in the WJS article for buying “hundreds of Pateks, sometimes at record prices” over the years to “drum up interest”—actually “without any attempt at concealment” repeatedly purchased important collectible watches by many watchmakers, including itself, for its Geneva museum.

It is “wrong to speak of artificial prices [when] dealers and private collectors actively bid against one another,” said Finanz und Wirtschaft. Blue chip brands like Patek Philippe, it noted, “fetch top prices at Christie’s or Sotheby’s auctions, in exactly the same way as at an Antiquorum auction.”

Anonymous bids (found in all types of auctions), a watch industry source told JCK, aren’t used to force up prices, but to prevent competing bids by potential buyers from going higher if a brand’s intent to buy an item is known. Finanz und Wirtschaft said prices of 46 lots bought by Omega at Antiquorum’s Omegamania sale in April “were bid up by collectors and dealers – not the other way round.”

Those watches were purchased for Omega’s museum in Bienne, said Béatrice Howald of the Swatch Group. Antiquorum’s auction was an opportunity for Omega connoisseurs and collectors, including Omega, to acquire vintage Omegas, she stated. (Omega president Stephen Urquhart, in the WJS article, said Omega “is not hiding the fact” it anonymously bought watches, which “we really wanted.”) “It’s only normal a company wishes to own vintage pieces to show its heritage,” said Howald. “All big brands acquire watches for their museums at auctions.”

Omega publicized that with a full page ad in WSJ’s Oct. 12 issue and a front page ad Oct. 13 featuring the Omega that U.S. president John F. Kennedy wore at his 1961 inauguration, which Omega’s museum, say the ads, bought in auction in 2005 for $350,000. “We find the irony of WSJ helping Omega promote their auction watches quite amusing,” Howard told JCK.