subscribe Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Subscribe now
Used watches of Swiss manufacturer Rolex are seen at a shop in Zurich, Switzerland. File phooto: ARND WIEGMANN/REUTERS
Used watches of Swiss manufacturer Rolex are seen at a shop in Zurich, Switzerland. File phooto: ARND WIEGMANN/REUTERS

SA’s luxury second-hand market is booming, led by a surge in demand for jewellery, especially watches, according to data from Luxity, the country’s leading omnichannel boutique focused on buying and selling pre-owned high-end goods.

The company, which has stores in Nelson Mandela Square, V&A Waterfront, Gateway Theatre of Shopping and Menlyn Maine, said it had seen a 32% increase in sales of watches and jewellery over the past year.

Michael Zahariev, co-founder of Luxity, told Business Day TV on Friday that a cocktail of factors was behind the surge in sales, including investment potential and demand for unique or vintage pieces.

“What has been happening in recent years is that we have seen the rise in the resale of luxury goods, which has added an extra dimension to the resale, specifically of jewellery and watches, which now command a much higher price than if you took them to a traditional pawnshop,” he said.

“What we are seeing is that these are investment pieces. A lot of the time you get a return on investment, and people are starting to pick up on this trend.”

Luxity’s State of the Luxury Market in Africa report shows that Rolex and Cartier watches carry a resale value of 97.6% and 74.6% respectively.

“These numbers, largely driven by their iconic watch and jewellery collections, enshrine their perpetual magnetism. In summation, the luxury sector’s allure, while perennial, undergoes intricate shifts influenced by brand decisions, global events, and inherent market dynamics,” the report states.

Second-hand shopping is on the rise in SA particularly when it comes to jewellery and watches, according to Luxity. For more insight, Business Day TV spoke to Michael Zahariev, Co-Founder of Luxity.

“Louis Vuitton and Chanel, traditionally formidable players, experienced a mild shake-up this year. Their resale values declined by 1.9% and 0.9% respectively. While such a shift might appear subtle on the surface, this could signify the market's inability to keep up with the brisk pace of price increases — a phenomenon particularly pronounced in these two brands.

“Balenciaga stood as a beacon of resilience, especially in the SA market. The brand recorded a robust 10.1% escalation in resale value. Internationally, Balenciaga grappled with diminished desirability, a fallout from its contentious advertising campaigns in 2022.”

Johann Rupert, who controls Swiss luxury goods group Richemont, in 2023 warned that prices for second-hand,
high-end watches were distorting prices in the market.

SA’s richest person said he was worried about what he was seeing in the second-hand luxury watches market and that the segment of the market needed to “calm down”.

He gave an example of a watch Richemont had priced at €34,000, only to learn four months after it launched that somebody sold the timepiece for €89,000 at an auction.

Richemont owns luxury watch brands such as Cartier, Van Cleef & Arpels, IWC, Jaeger LeCoultre, Montblanc and Panerai.

The group in 2018 bought British-based Watchfinder, a company that buys and sells premium pre-owned watches.

The Geneva-based company recently launched a digital platform, Enquirus, which aims to reduce watch and jewellery theft and to authenticate second-hand sales.

According to data released by Boston Consulting Group (BCG) in 2023, luxury watches are in demand as alternative investments.

BCG also found that buyers were paying high premiums for pre-owned models from top brands, as well as from leading independents such as FP Journe & De Bethune, with the expectation that the value of these watches will continue to rise.

The data shows that from August 2018 to January 2023 average prices in the second-hand market for top models from the three largest luxury brands — Rolex, Patek Philippe and Audemars Piguet — rose at an annual rate of 20%. BCG said pre-owned watch sales reached $22bn in 2021, accounting for nearly one-third of the overall $75bn luxury watch market.

Zahariev said that pre-owned jewellery offered consumers access to luxury pieces from designer brands like Bulgari, Van Cleef & Arpels and Tiffany & Co, which do not have a physical presence in SA.

“These items are also available for lower than the retail price of new pieces, which are often inflated by the current market value of materials and brand markups,” he said.

Rolex in June said it was planning on offering an authentication service for its pre-owned luxury timepieces in SA. This move was to protect its prospective buyers from being duped by fakes in the market.

khumalok@businesslive.co.za

subscribe Support our award-winning journalism. The Premium package (digital only) is R30 for the first month and thereafter you pay R129 p/m now ad-free for all subscribers.
Subscribe now

Would you like to comment on this article?
Sign up (it's quick and free) or sign in now.

Speech Bubbles

Please read our Comment Policy before commenting.