Interview Synopsis

European pre-owned luxury watch market analysis

  • Private Equity
  • Consumer
  • Europe

The European pre-owned luxury watch market could grow by 7-10% yearly, according to a former executive at Chronext AG.

European pre-owned luxury watch market hits EUR 2bn

In an Interview with Third Bridge Forum, the specialist said the European pre-owned luxury watch TAM is now EUR 2bn, with global figures at approximately EUR 50bn. We were told this growth is “completely supply-driven”.

The specialist explained in detail the differences between marketplace and inventory models used by retailers in this space. They told us that cash is the “biggest problem” for running an inventory model given the need to ensure a high supply of “interesting stock”. By contrast, the specialist said running a marketplace model is “easier” because it does not have the same financing issues and can source a better supply of watches. For customers, the specialist said “price”, not business model, is most important and trust both equally. 

Pre-owned luxury watch retailers Chrono24, Watchfinder and Chronext are viewed similarly by buyers and sellers, according to the specialist. All three have different business models, we were told, although Chrono24 is the “biggest player” in terms of sales, our expert said. Non-specialist operators such as Vestiaire Collective were also mentioned by the specialist but they do not expect such operators to threaten the three retailers. 

The specialist also explained the main differences between pre-owned and grey markets for sourcing inventory. One of the key differences is the contribution margins, with supply sourced from the pre-owned market three times higher than the grey market. The specialist also told us decreasing purchasing costs and increasing commission rates were key profitability levers. 

The specialist concluded by stating further consolidation or mergers in the market are unlikely, including rumours that LVMH might be interested in making a third acquisition in the sector.  

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The information used in compiling this document has been obtained by Third Bridge from experts participating in Forum Interviews. Third Bridge does not warrant the accuracy of the information and has not independently verified it. It should not be regarded as a trade recommendation or form the basis of any investment decision.

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