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Loading ...Omega sponsors a big international watch auction and then bids up watches to record prices, ostensibly to make sure rare platinum time pieces were kept in the Omega family, according to the Wall Street Journal, How Top Watchmakers Intervene in Auctions:
Through the auctions, Swiss watchmakers have found a solution to a challenge shared by makers of luxury products from jewelry to fashion: getting their wares perceived as things of extraordinary value, worth an out-of-the-ordinary price. When an Omega watch can be sold decades later for more than its original price, shoppers for new ones will be readier to pay up. “If you can get a really good auction price, it gives the illusion that this might be a good buy,” says Al Armstrong, a watch and jewelry retailer in Hartford, Conn.
How ethical is this, even if the purchases are real? If Omega didn’t bid on the Platinum Constellation Grand Luxe up to $351,000, would it have even come close?
That is why I call what happened at the Antiquorum Omegamania auction to be promotional theatre in the best PR tradition. Though technically legal, I wonder if this sort of auction break the spirit of the law, falsely inflating the price of watches that are relatively common and generally considered “mass market,” no matter how appealing and well-made.
“It’s an entirely different approach to promoting a brand,” says the cofounder of Antiquorum, Osvaldo Patrizzi, “Auctions are much stronger than advertising.” Mr. Patrizzi worked with Omega executives for two years on the auction, publishing a 600-page glossy catalog and throwing a fancy party in Los Angeles to promote the event. “We are collaborators,” he says.
But now there’s ferment in the world of watch auctions. First, they’re starting to raise ethical questions, even within the industry. “A lot of the public doesn’t know that the biggest records have been made by the companies themselves,” says Georges-Henri Meylan, chief executive of Audemars Piguet SA, a high-end Swiss watchmaker. “It’s a bit dangerous.”
More unsettling, Antiquorum’s Mr. Patrizzi, who essentially founded the business of watch auctions, is under fire by the house he cofounded. Its board ousted Mr. Patrizzi as chairman and chief executive two months ago — and hired auditors to scour the books.
The business of auctions for collectibles is not a model of transparency. The identities of most bidders are known only to the auction houses. Sellers commonly have a “reserve,” or minimum, price, and when the bidding is below that, the auctioneer often will bid anonymously on the seller’s behalf. However, the most established houses, such as Christie’s International PLC, announce when the seller of an item keeps bidding on it after the reserve price has been reached.
I believe this is being done in order to push Omega past the “mass market” space that both Omega and Rolex find themselves — quite a different place than Patek Philippe and that lot. Heaven forbid, many think that the entire market for cars and watches are being inflated by the automakers and watchmakers themselves as they “populate their own museums.”
Demand and prices for expensive watches have been surging, fed by global economic growth. But there’s another factor behind the prices: an alliance between watchmakers and a Geneva auction house called Antiquorum Auctioneers.
Antiquorum sometimes stages auctions for a single brand, joining with the watchmakers to organize them, in events at which the makers often bid anonymously. This is a technique of which Patek Philippe and other famous brands, as well, have availed themselves.
Patek Philippe, you too? All three of these watchmakers are losing in a hyper-market for watches and this is an attempt to get the marketing all sexed up on antique and current Omegas.
Sadly, I can buy Omegas at Costco and that is truly the major problem: Omega watches have become accessible, attainable, affordable, and boring. That said, the estimate for the below platinum watch was only $30,000 but it was bid up to ten-times that price. Yes, the market for watches is hot but how hot could it be if the final buyer was not a Private Equity Fund manager but rather Omega itself? Fishy, fishy, fishy.
Lot 170 “PLATINUM CONSTELLATION GRAND LUXE”
Omega, “Constellation, Chronometer, Officially Certified”, sold on April 23, 1958. Very fine and exceptionally rare, self-winding, center seconds, water-resistant, platinum gentleman’s wristwatch with diamond-set dial and an articulated platinum bar-link Omega bracelet with clasp. This watch is sold with a box, a Certificate of Authenticity, and a 2-year Omega guarantee. Property of an Asian Collector.
Estimate: 30,000 CHF - 40,000 CHF
Result: 413,700 CHF ($ 351′000 ) (Euro 255,370 ca.)
Filed under: Auction Marketing, Auction PR, Black Hat Advertising, Black Hat PR, Blat Hat Auctions, Marketing Ethics, PR Ethics, Transparency
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This is nothing but a SCAM in which watch makers collaborated with the auction houses to artificially jack up prices. Their action is similar to the circular-trading by certain mutual-funds that attracted huge fines for perpetuators. I am hoping the watch companies are penalized too.
These watchmakers typically use their own “museum” or “charity” as a ‘front’ to cover up their shameful act. Immediately after WSJ article, Omega came up with full-page ads in major newspapers where they clearly mentioned that their ‘museum’ bought the watch! I understand Omega will like to disclose this news specially now that this has created very bad press for them. Their ads are like a confession of their crime. The WSJ article has tainted high-priced watch makers. As it was among the top-5 articles on the date it appered, I am sure thousands of people would have got to know of this scam.
This scam is likely to taint the Brand Ambassadors of these watches too. How can they associate themselves with these scam companies?
While I feel disgusted with their actions, I am also amused that the watchmakers short-changed themselves. If it is all artificial between a couple of their fronts (e.g. Omega Museum), why not go over-board? Instead of $350K, I wonder why they did not use their ‘circular-bidding’ to buy their own watch for $3.5 million? Or maybe for $35 million….
I dont have any axe to grind as I do not own (and neither desire to own) any such price-inflated-watches. However, I feel disturbed that a criminal act by Omega and other luxury watch-makers is going unpunished.