While writing for the Monaco Legend Group “Exclusive Timepieces” auction, I started that article by saying that autumn had started and this meant auctions were coming. Indeed, I was quite excited about this new season and could not expect everything that has happened so far. No one could expect it, actually. We have briefly talked about Only Watch postponement here but that news seems so far away today, especially if we have a look at what occurred during the Christie’s “Passion for Time” sale on Monday 6th of November. One of the biggest single-owner watch collections in the world went on sale as Mohammed Zaman, who has been collecting for about 40 years, decided to put on sale his catches, which happen to be anything but common. One clear example is Marlon Brando’s Rolex GMT-Master (which appeared for the first time at Phillips in 2019 and was sold for $1.95 million). This is not the only collector selling his pieces this year, as Patrick Getreide (owner of the OAK collection) is selling 142 of his watches in Hong Kong in a couple of weeks. Guess who is going to hold the auction? Yes, Christie’s again.
How an auction works
Before recalling the so much-debated events, let’s explain how an auction usually works. The seller or client consigns his watches to an auction house who is in charge of selling them. Experts at the auction house evaluate the lots and indicate an estimate for each of them, which is then shown in both online and printed catalogues so that potential bidders have a rough idea of the value of the watches for sale. The hammer price is the amount of money fetched by the lot and comes from the winning bid; this sum goes to the seller or client (the consignor). The commission is an additional fee the winning bidder has to pay and it goes to the auction house. The sale price is the sum of the hammer price plus the commission fee. Sometimes we can find a reserve price as well: it is the minimum amount the seller is willing to accept as the winning bid. If the lot does not reach the reserve price, it will remain unsold. So far so good. Now we introduce a figure which has been obscured to many enthusiasts, especially before Monday. I am referring to the third-party guarantor, who is someone who can place an irrevocable bid on a lot before the auction. If the lot does not reach that minimum sale price, the third-party guarantor is committed to buy the lot. If the lot exceeds the above mentioned initial bid, the third-party guarantee is disregarded. By placing an irrevocable bid on a lot, the third-party guarantor takes on risks associated with the lot not being sold. At the same time, the auction house is able to secure the sale of all the lots where a guarantee has been agreed on and this obviously makes the consignor satisfied and happy. That is why the auction house pays the guarantor a fee, which is part of their deal.
What happened at the “Passion for Time” sale and what will it be remembered for?
This sale started about an hour late, it was announced that a third-party guarantor placed a bid on all the lots (paddle number 1013) and every lot estimation was updated upwards during the auction. Definitely not an ordinary Monday. Let’s try to clarify what happened. According to Christie’s, the delay of the “Passion for Time” sale was due to the fact that the guarantor of the auction did not show up until Sunday and they agreed on a deal right before the event on Monday morning. Every lot estimation was indeed updated upwards during the auction and this of course caused confusion among the bidders. At the same time, Christie’s was obliged to update the estimates to reflect the third-party guarantees. Printed catalogues still had the wrong estimates simply because there was no time to update them. It is fair to believe the auction house should have shifted the sale by some time to get the estimates updated before the start and not simultaneously. By not doing it, it really looked like estimates were being modified as bidding was going on and this drew a lot of attention in the salesroom, as nobody had clear what was happening. In Christie’s defence, even if the auction had been postponed and the estimates changed on time, questions would have remained as bidders realised the new estimations. Some complained about the fact that lots which are subject to a third-party guarantee have to be marked in the catalogue with a specific symbol (in this case, they were not). Truth be told, the auction house disclosed it during the pre-sale announcements (which is completely legal), something that people seem to have missed. As you can imagine, all the lots were sold and the majority went to a particular paddle. Guess which one? Yes, paddle number 1013.
Watchype feedback
Until proven otherwise, Christie’s followed the conditions of sale. However, third-party guarantors are not so common in watch auctions. Hence, the confusion and sensation in the salesroom (and obviously on social networks, like Instagram). This having been said, even if the guarantor was not related to Christie’s and there was not an inside man as many alleged, we understand people’s frustration. The thing here is that an auction with a last-minute third-party guarantee on all the lots (and not on a few lots here and there) does not make too much sense for all the collectors who have studied the catalogue in the previous weeks and might have been interested in bidding on some lots based on the initial (online and printed) estimations. With the mysterious number 1013 stepping in, the majority of the bidders have been cut out from the sale. In conclusion, if we all want to learn something from this strange day, let this serve as a reminder to everyone (collectors, auction houses, but also retailers and whoever is involved in the watch world) to understand what speculation might cause. Do not sell your collection expecting previous years’ prices if those ones are not consistent with today’s market. Do not promise the consignors results which are too difficult to achieve just to secure the sale. Do not ruin this world pushing collectors away and making them think institutions are playing shady games for personal profit.
