In addition to Rolex, Chopard and Paiget, Backes & Strauss, Frank Muller, Richard Mille and Urwerk top the list of luxury watches collected by rich Nigerians as alternative means of investment according to our investigation.
The trend which is global is now steadily catching on in the country as super rich Nigerians buy vintage and high end luxury wrist watches not just as fashion statements but as alternative investment items. The Nigerian market for vintage Wristwatches is estimated at more than $1 billion but it is growing fast, according to those familiar with the industry.
The wrist watches targeted for investment purposes are rare time pieces that are often one of a kind. Richard Mille, Backes & Strauss, de Grisogono, Rolex, Chopard, Paiget, Patek Philippe are among the most collected brand 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.
Frank Mullers’s Aeternitas Mega 4 is an all time classic. It is the most complicated wristwatch ever made in the world with thirty-six complications, 1, 483 components and 99 jewels. In addition, Backes and Strauss Regent Diamond Jubilee limited Edition which numbered just 60 pieces is one of the brands being collected. It was designed to celebrate the Queen of England, Queen Elizabeth’s 59 years on the throne and comes in 18 carat white gold case hand set with one or two rows of ideal cut diamonds. It also has an open back of sapphire glass, engraved “Queen’s Diamond Jubliee”. There are only two of these limited edition pieces in the country.
A spokesperson, who prefers not to be named, at Julian’s Luxury, a luxury store who is the exclusive agent for high end luxury brands like Backes & Strauss, Frank Muller, Richard Mille, Urwerk amongst other brands in Nigeria said super rich Nigerians are very discerning and they understand the economic value of the kind of watch they wear.
“Nigerians are now collecting these high end luxury brands because they are very discerning consumers. They know the luxury brands that very top people around the world are wearing. Nigerians love exclusivity. These are very exclusive brand. For instance, Richard Mille is very simple but very pricey. An average Richard Mille piece that has no diamonds is between $70, 000 and $80, 000, on the average. To wear a Frank Muller piece also stands you from the crowd. It says a lot about where the person is coming from,” he said.
Furthermore, Ify Nonyelu, business development director, Upfront & Personal said in a previous interview, dealers in luxury wristwatches that typically, Nigeria is a brand driven market. “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 values placed on the Wristwatch in the short and long term,” she said.
At the famous auction house in the United Kingdom, Christie’s, vintage timepieces are the sixth largest department it has which made more than $116 million in sales in 2011 according to Paul Sullivan, a luxury goods critic.
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’ item any day. Brands like Patek Phillipe, 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 a Bruce Onobrakpeya or Grillo.”
Smart high end wrist watch brands are already making in-roads into Nigeria to seize the opportunity 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 realize that Nigeria is awash with plenty cash and very brand conscious people. The Nigeria 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 cost 30 percent more in a year or two say analysts familiar with the vintage wristwatch industry. A piece of the Backes and Strauss Regent Diamond Jubilee limited Edition sells for an average price of 300, 000 Euros and analysts say in another five years, the price could have tripled. A piece of Franck Muller Giga Tourbillon collection is currently $193,012 and analyst say in another three years it will be worth more than $772, 000.
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 Patek Philippe chronograph from 1928, which was sold in Geneva for $3.6 million according to online reports.
Collectors however have an option to pass on vintage wristwatches to their children who usually cherish such gifts. Late Rasheed Gbadamosi, chairman, RAG Ltd said in an interview before his demise that 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.”
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. Because they are not 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.”