It’s no secret the pandemic irrevocably changed multi-facets of life. In the realm of luxury, the digital conversion pace quickened, taking with it the rise of online auctions. This was partly due to a bevy of HNWI (high net-worth individuals) with a lot of time and nowhere to go, scarcity of goods as production lines halted, and a desire for tangible investments, often with circular bragging rights. While the pandemic may be officially over, international auction house Christie’s sees no signs of the trend waning as it posted its biggest year ever in 2022 with a total of $8.4B, with $988K from luxury alone.
2023 is on the path to at least matching that. FashionNetwork.com spoke to three curators from the luxury sector, including watches, jewelry, and handbags, on what’s driving the company’s record growth.
A new generation of auction participants is one factor fueling the growth as online auctions and enticing opening bids make the process less intimidating. According to Claiborne Poindexter, senior specialist jewelry, auctions are no longer a “stuffy room with an auctioneer calling bids on antique French furniture.”
“Jewelry is a bit different than other luxury sales. For instance, a Graff diamond necklace will open at $20K to $30K, whereas a comparable piece in the store is $150K. It will probably go for double or triple that, but it’s a way to excite bidders. We are quite conservative with the pricing strategy in the jewelry department,” Poindexter noted. Jewelry sales for 2022 totaled over $449K.
As the jewelry market has shifted towards lab-grown diamonds, presumably guaranteed to be free of negative connotations, buying pre-owned jewelry is often a preferred option.
“Particularly with the jewelry department, it’s also about sustainability in many cases,” he added.
Auctions can follow trends seen in the broader market. Currently, 1970s styles are in demand, with Poindexter citing Bulgari coin-festooned sautoir necklaces, for example.
“The Bulgari long chain coin necklaces used to be $10K, and now you can’t get one for less than $100K,” he noted.
Other key jewelry brands that perform well are Chanel, Van Cleef & Arpels, Cartier, Tiffany & Co., and JAR.
Watches have also benefited from the recent uptick in auction activity. Well-off individuals whose incomes were unaffected during the pandemic enhanced their interest in watches and often began buying and selling through auctions.
The department had record-breaking sales of over $208M in 2022; thus far, for H1 2023, sales have topped $400M.
“Watches are seen as a commodity that people trade in and out,” said Rebecca Ross, head of sale watches.
Evaluating its value is affected by trends and brand names; Patek Philippe and Rolex styles still perform well with names like FP Journe, Patton and obscure brands, Kari Voutilainen, Philippe Dufour, De Bethune are starting to shake up the scene as well. For example, recently, an Audemar Piguet watch sold for $170K, and Patek Philippe for $184K.
According to Ross, factors that determine auction performance are condition, rarity, and provenance.
“During the pandemic, key iconic pieces sold at high prices because they were unattainable. Not only couldn’t you find them in the stores, but certain brands also have an exclusivity around shopping. You have to know them, be on a list, or spend a certain amount of money with them,” Ross noted.
Despite the condition being one of the most prominent factors in a watch’s resale value, one piece defied the odds. “It was a 1950s Rolex 1960-1962 moon phase watch with a calendar. We nicknamed it the ‘dark star’. It was in a box and never worn, and the gold had tarnished so much it was almost unrecognizable as a watch; it had a black veil-like patina. It fetched $1.5M,” Ross continued, adding a never-worn watch is a holy grail for auctions.
It was hard to imagine one of the booming luxury categories, even just 15 years ago, would find itself as a competitor in the auction world, but that is precisely the case with designer handbags.
With Parisian leather goods leading the pack, the second-owner market for bags is heating up. So far, for H1 2023, Christie’s has sold $20M worth of handbags, with its most significant sale of $4.1M coming from New York.
According to Rachel Koffsky, Christie’s international head of handbags, while some names always perform well, the demand for certain styles ebbs and flows. “Hermes is the number-1 brand for the last ten years that Christie’s has been the market leader on the secondary market, but so has Chanel and Dior,” she said, adding, “The Lady D has been a popular style as well as the Saddle Bag by John Galliano that until recently you couldn’t give it away.”
Brands such as Fendi, Gucci, and Louis Vuitton have also performed well lately, especially the Vuitton graffitied trunks from the Marc Jacobs Sprouse era and the Murakami collection. Other brands, such as Celine, Saint Laurent, and Bottega Veneta, may not perform as well but are solid names to lure new bidders to the auction world at an attractive price. Social media channels also help newbies familiarize themselves with the process.
Rarity is also a driving factor in the category along with condition, as handbags tend to show more wear and tear due to their material nature and thus are given a sale condition grade from 1-6. New is one, and six is fair, with pristine, excellent, very good, and good being in between.
“We are very picky about what we offer,” notes Koffsky. She cites a rare 2005 bronze metallic Birkin covered in feathers and black PVD hardware with a grade 2 of excellent that was estimated between 80K-100K euros and sold at sold for 280K euros as the bar setter.
Christie’s promotes luxury week in June and December by opening galleries so potential bidders can view upcoming items for its live and online auctions. Additionally, private sales bear a predetermined fixed price, and other initiatives such as Only Watch, a charity-centric auction held in Geneva.
The pandemic quickened the auction shift to a digital platform, especially in the U.S;, where lockdowns prevented travel and interrupted retail operations and supply chains. This led to an increase in first-time auction handbag buyers—who often discover the bidding sales via social media—at Christie’s, with 50 percent being new clients and 50 percent millennials, according to Koffsky.
The secondary market also saw an influx of property, and general auction interest hasn’t slowed down yet. The three luxury consultants also noticed the reasons for selling have also shifted; sometimes, it’s just to change up their collections, according to Poindexter.
“Most of our clients are very much alive, still buying and selling. The old selling adage death, debt, and divorce— doesn’t necessarily apply anymore.”
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