Keeping it Real
The luxury watch industry has never resolved the issue of high-quality fakes taking big bites out of its margins and, perhaps more importantly, damaging its reputation.
No doubt the people in this shady business are determined to make easy money since the volume of fake watches being produced is (presumably) larger than that of the real ones, thus promising billions of dollars (thanks to lower costs, again presumably) for the guys at the top. That said, another distressing issue is watch theft, which reached never-seen heights in 2022 even as the resale value of some models skyrocketed. The issues come together when a fake is so realistic that it gets its unsuspecting owner robbed, which it makes twice the misfortune and a bit of a tragic-comedy.
So, on the issue of theft, the question that surfaces is where these crooks are selling their loot. In an interview with the New York Times, Frank Vivier, Richemont’s chief transformation officer recently said, “The proliferation of too many online resale platforms with no proper legitimacy to count on has simply exacerbated the crisis of watch thefts. These resale websites have become a haven for selling stolen goods such as luxury timepieces and jewellery.”
Hence, reputed pre-owned retailers such as Richemont’s own Watchfinder & Co. have an important role to play as gatekeepers, thereby “giving zero value” to counterfeit and stolen watches.
“The issue of high-quality fake timepieces is a highly significant one because many people are wearing fake modern watches that they think are absolutely real. Unfortunately, they are not,” said noted watch expert and vintage watch dealer Eric Wind.
It is no wonder that Arjen van de Vall, CEO of Watchfinder & Co. shared similar thoughts when asked exactly how big the problem of high-quality fake timepieces seems to have become. “When it comes to the sale of counterfeit watches – globally speaking, it’s estimated that 40 million counterfeit watches are sold each year, generating a profit in excess of USD 1 billion dollars, which can’t be taken lightly.”
Getting Insurance
For watch enthusiasts, this news might make them even more cautious when thinking of buying extremely expensive watches (outside brand boutiques and authorised dealer stores). The watch industry has been very slow when it comes to doing the necessary here, or in the matter of stolen timepieces. “The increase in watch theft has been well-documented globally – more than 100,000 watches have been stolen in the UK since 2015, with a 41 percent surge reported in the country just last year (2022). Luxury watch theft in the US is also reaching all-time highs, particularly in metropolitan areas such as Los Angeles, where, according to the Los Angeles County Sheriff’s Department, watch robberies more than doubled in the first six months of 2022. Paris authorities have also reported increasing watch crime since 2019,” Arjen said.
Talking about the severity of watch theft as the watch industry gears up to take action, Wind said, “The problem of watch thefts are a big issue and I believe are affecting secondary market values of the modern “hype watches” such as the Audemars Piguet Royal Oak and Patek Philippe Nautilus. These watches are very attractive to thieves in major cities because of their staggering value.”
But, things do in fact change for the better, or they could do.
This is where the watch insurance initiative launched by Audemars Piguet will play a crucial role. In essence, this important step will undoubtedly be welcomed by all ardent watch aficionados of Audemars Piguet as it is the first of its kind to be provided by a luxury watchmaking house in history. Under this two-year guarantee programme, all Audemars Piguet watches will be enjoying a shield of safety free of charge thanks to the introduction of measures to repair, replace or refund them (up to USD 73,000) bearing in mind that they should have been bought in between 2022 and 2023. Owners will have to provide an image of their lost or stolen watches along with their serial numbers that will help in tracking the timepieces. However, no pre-owned pieces will be covered. “It’s a positive thing to see watch insurance get attention from the watch manufacturers. Many watch collectors don’t have their watches insured and particularly with the imminent risk of watch robberies in major cities, it’s imperative to have insurance,” Wind said.
Digital Solutions
While this is a highly commendable gesture from Audemars Piguet, the future is uncertain as far as what other brands will do in response. “It’s quite possible we will see other brands follow suit. I think they will want to see how the AP programme goes first. It’s a wait-and-see approach,” Wind said.
Likewise, Breitling is moving in the same direction though it is not going with insurance moves. Since 2020, the brand has been offering blockchain-based digital certificates to all its new watches as part of its endeavour to value-add for its customers. The brand’s watch owners will have direct access to comprehensive information on their watch such as technical specifications and product history accompanied by other benefits in the form of traceability, tradability, timely notifications on repair services as well as warranty extension and insurance offers if there are any. Needless to say, owners will also be provided access to experiential events and limited edition releases.
As for major groups, Richemont was ahead of the pack, with the venerable Vacheron Constantin also deploying a blockchain-powered system way back in early 2019, for Les Collectionneurs (comprising extremely rare and vintage timepieces) safe and secure from the perils of forgery. All blockchain initiatives share in common the ability to record specifics about any given watch, and
then have said details become immutable. For Richemont brands such as Vacheron Constantin, Panerai, IWC, Roger Dubuis, most of the heavy lifting is done by technology partner Arianee, a digital certification solution provider for luxury goods. Since we last covered these developments in 2022, Audemars Piguet and MB&F have also embraced the potential of Arianee, but it is certainly not the only game in town.
Ulysse Nardin is also on board, proffering a blockchain-protected certificate of authenticity powered by Woleet (a digital warranty system provider) for certain watches with unique serial numbers and warranty card numbers. This certificate is only for those buyers who have proof of extended warranty from October 31, 2019 onward. It is still considering whether to add maintenance and other services.
This raises the obvious question: how does all this data keep any given watch safe from bad actors, whether they be thieves or counterfeiters? Well, one might be able to make a copy of a watch – a very good one – but the nature of the blockchain makes it impossible to create copies. The same is true for a stolen watch, with the data relating to that watch being impossible to alter or copy. A buyer would still have to know to check this, and the professional resellers are on it.
In Data We Trust
Richemont itself recently unveiled a free online platform called Enquirus (not a blockchain project); with its doors open to all luxury brands, Enquirus boasts more than 190 participating luxury watch brands. To get an accurate picture of what difference it would make with respect to bringing down the escalating cases of watch theft, we asked Arjen. “Tools like Enquirus are instrumental in breaking the cycle between watch theft and resale. Earlier this year we launched a campaign to help tackle watch crime and it consisted of two simple steps – urging watch owners to register their timepieces on the website of Enquirus at the point of purchase and for pre-owned retailers to strictly implement thorough checks and screening procedures as standard rules – our aim is to make it much harder for thieves to sell stolen watches, therefore making it a less profitable crime.”
“Since the platform has been designed in close collaboration with a wide range of partners, including watch manufacturers, law enforcement agencies, insurance companies, the pre-owned market and clients, it allows watch owners and industry partners to register, declare and search for lost and stolen watches,” Arjen added. “By simply registering a watch on Enquirus, experts and retailers are connected, which increases the chances of recovery and helps quickly reunite owners with their timepieces anywhere in the world without revealing their identity. In partnership with Enquirus, we were successful in stopping the resale of over 200 stolen watches last year.”
Not to mention, there is still some doubt lingering on the efficacy of such measures being taken. “Enquirus is a positive step for the watch industry. However, I’m not sure how effective it will be, but it’s really great to see this strong focus,” Wind said. “Working along the same lines for quite a while is the London-based Watch Register, another pre-owned retailer that has a large database of lost, stolen and fake timepieces.”
Nevertheless, Watchfinder & Co. has its own innovative mechanisms in place to tackle the menace posed by high-quality fake timepieces. As Arjen said, “Here at Watchfinder, we take a very firm stance on counterfeits; every single watch that gets sent to us goes through a rigorous 60-step inspection and authentication process before any valuation, service or sale can be completed. We’ve a dedicated authentication team and watchmakers – accredited by 19 different luxury watch manufacturers – charged with ensuring every single timepiece we sell is 100 percent authentic.”
Authenticity is a big deal, with Arjen further noting how sophisticated the fakers have gotten. “Scammers are now able to make replicas look more convincing than ever before thanks to developments in, and accessibility to, tech including 3D printers and CNC machines. This, combined with the wealth of knowledge fake manufacturers have accumulated over the years, means that counterfeits are being produced with absolute aesthetic accuracy. In fact, our expert team of watchmakers and authenticators have observed that just five years ago around 80 percent of all counterfeit watches that were sent into their stores and service centres were easily identifiable at first glance and only 20 percent required closer inspection. Today, the scenario is totally different because approximately 80 percent of these fakes require closer inspection and only 20 percent stand out as obvious forgeries. So the challenge ahead is enormous.”
This article first appeared on WOW’s Spring 2024 issue.
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