The used luxury watch market is undergoing a significant transformation with the introduction of Rolex's Certified Pre-Owned (CPO) program. However, according to Stuart Hennell, founder of Watchfinder, Rolex's strategy could distort the market by limiting the sale of its certified watches only to authorized dealers.
Hennell, now an investor in the secondary market, argues that certification should be open to major independent players to ensure a meritocracy and transparency in the industry. In this article followed by an interview, originally published on WatchPro, Hennell traces the evolution of the pre-owned market, the strategies of brands and the future of buying and selling pre-owned watches, highlighting critical issues and opportunities for collectors and investors.
The Used Watch Market: Rolex and the Pre-Owned Certification Check.
In recent years, the luxury watch industry has undergone profound transformations, with an increasing emphasis on the secondary market. One of the key players in this evolution is Stuart Hennell, founder of Watchfinder, a company that has revolutionized the buying and selling of used watches, making it a reliable option for collectors and enthusiasts.
Today, Rolex decided to enter the second-hand market with its Certified Pre-Owned Program (CPO), an initiative that allows only authorized dealers to sell second-hand watches certified by the brand. According to Hennell, this policy risks distorting the market and penalizing watch specialists.
Stuart Hennell's Vision: A More Open and Meritocratic Market.
Hennell, who in 2018 sold Watchfinder to the Richemont Group for an estimated £250 million, is now an investor and adviser to Subdial, another secondary market specialist.
According to him, Rolex's strategy is problematic because it excludes major independent operators, limiting the CPO to authorized dealers only. This model, Hennell argues, does not necessarily reward service quality or industry experience, but rather reinforces Rolex's control over distribution and pricing.
"Rolex CPO is a great idea, but I don't like the way it has been implemented. It is a model that seems forced-I would have preferred a more open and merit-based approach, involving both official retailers and secondary market specialists."
The influence of CPO on the market and prices.
The introduction of the Certified Pre-Owned program has had a significant impact on used watch prices. Traditionally, the secondary market operates following more fluid supply and demand dynamics, but with Rolex's CPO, authorized dealers charge higher prices than the independent market.
"It seems odd to buy a secondhand watch from a Rolex dealer at a higher price than a new model," Hennell notes. In fact, ADs (Authorized Dealers) often charge a 20-30% premium over secondary market prices, especially for iconic models such as the Daytona, Submariner and GMT Master.
This strategy, according to Hennell, can create confusion among consumers and risks undermining confidence in market prices, as the real value of a watch can vary widely depending on the sales channel.
From distrust to adoption: brands' attitudes toward the secondary market
Hennell recalls how, in the early 2000s, the used car market was viewed with suspicion by big brands, which saw independent retailers as a threat.
"When we founded Watchfinder, the secondhand watch market was perceived as unreliable. Brands saw us as the enemy and tried to hinder our work.""
However, attitudes have changed in recent years, with many brands beginning to partner with companies that specialize in the pre-owned sector.
"Now everyone understands that new and used are part of the same ecosystem. Watchfinder has shown brands that we can provide valuable market data, helping them make better decisions."
This shift in perspective has led to the emergence of various CPO programs, including that of Audemars Piguet, Vacheron Constantin, and now Rolex, which aim to control the secondhand market and build customer loyalty.
The Importance of trust and quality in the secondary market
One of the main problems for new entrants in the industry is building trust with customers. Watchfinder has achieved success through its quality of service and ability to ensure secure transactions.
"Many people think you can enter this market and make a quick profit, but the reality is different. We have spent 20 years building a loyal customer base, constantly buying and selling with them."
According to Ross Crane and Christy Davis, co-founders of Subdial, one of the keys to success in the industry is to offer a comprehensive service, including certifications, audits and quality assurance.
"Marketplaces like Chrono24 do not buy stock, so they cannot build lasting relationships with customers. In contrast, a company like ours, which buys and sells directly, can build trust and offer competitive prices."
The future of CPO and the secondary market.
According to Hennell, the future of the secondary market will depend on brands' ability to strike a balance between controlling prices and working with independent specialists.
"If Rolex tried to completely exclude independent operators, it would face a problem: who sells the watches? Collectors often prefer to rely on specialists with whom they have built a trusting relationship."
Crane adds that many savvy buyers are unwilling to pay the premium imposed by official dealers and prefer to turn to the secondary market.
"Only 10% of customers agree to pay premium for a CPO from a Rolex dealer. The remaining 90% prefer the market price."
This shows that despite Rolex's attempts to control the market, independent specialists will continue to play a key role in the luxury watch industry.
Conclusion
Rolex's CPO program represents a breakthrough in the luxury watch industry, but it raises important questions about competition and market transparency. Stuart Hennell and other industry experts believe that the future of the secondary market needs to be more open and meritocratic, with collaboration between brands, official retailers, and independent specialists to ensure customers receive the best possible service.
