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Geneva, Switzerland—Demand for luxury watches soared during the pandemic, but that hasn’t spurred the top brands to ramp up production. Instead, companies like Rolex, Patek Philippe, and other coveted brands are keeping output at the same levels, resulting in rationed distribution, long customer waiting lists, and a red-hot secondhand market. Image: the Rolex boutique at Boston, MA-based Long's Jewelers.

Secondhand luxury retail is rocketing in general, but especially in jewelry and watches. McKinsey & Co. identified secondhand retail as one of its six seismic shifts impacting luxury jewelry and watch retailing. Sales of pre-owned watches are expected to become the industry’s fastest-growing segment, rocketing from $18 billion in 2019 to $29-32 billion annually in 2025, says the consultancy.

That has led to a proliferation of secondhand sellers, and a bit of a Wild West environment. In an article on Eminetra.com, Toby Bateman, CEO of popular watch collector site Hodinkee, said, “There are many watch sales platforms. Customers don’t always know from whom they buy their watches. We can’t guarantee they’re genuine. We can’t guarantee they’re not Franken watches. And they can’t guarantee that the watch is working properly. 

Hodinkee recently launched a secondhand watch e-commerce site, guaranteeing authenticity and offering refurbishment.  But that’s not the only site with credible chops in the watch market: German-based Chrono 24 has some storied investors, including luxury conglomerate LVMH, while WatchBox is the brainchild of third-generation Philadelphia jeweler Danny Govberg, with two partners from Singapore.

Meanwhile, Eminetra says demand for luxury watches is rocketing, especially among young, newly moneyed global stock and cryptocurrency investors, while new models from popular brands are nearly impossible to get through authorized retailers. As a result secondhand prices for some models can go from three to more than 10 times the price of the original. For example, a Patek Philippe Ref. The 5711 Green Dial, which sells for $ 35,000, was auctioned in July for $ 490,000. 

Meanwhile, for jewelers who are authorized retailers of coveted brands, it’s clearly a different world from the days when the industry believed there was no more money in watches.

Related: Help Watch Clients Become Wise Collectors With These Investment Tips