Confession: I’ve arrived at some extent in my horological journey the place each time I learn a Phillips watch public sale catalogue, a Britney Spears music begins to play – on repeat – in my thoughts. It could be extra correct to say I hear a riff on one in all her songs, and it goes “Oops, they did it once more!” Nevertheless, occasions surrounding Phillips’ watch auctions are undoubtedly not unintended, so neglect the “oops.”
Repeatedly, Phillips’ senior consultants Aurel Bacs and Livia Russo, alongside their world staff, handle to cull a number of excellent timepieces from a few of the most necessary collections across the globe and current them on the market to the watch-buying public. Notably noteworthy are the “cowl tons” consignors entrust to them, which stir the passions and draw the eye of innumerable fans and consumers. As soon as the hammer falls it nearly all the time signifies headline-grabbing, record-breaking outcomes
Session one of many 2021 New York Watch Public sale on December 11 was the identical, but in addition completely different. The precise course of that performed out is difficult to find out, however there are some details that no one would deny.

Tiffany & Co double-signed Patek Philippe Nautilus Reference 5711/1A-018
Patek Philippe Nautilus Reference 5711/1A-018, double signed “Tiffany & Co”
When Bacs stepped to the rostrum in New York Metropolis on Saturday, December 11, he introduced that 20 days earlier Phillips agreed to public sale a timepiece consigned by a non-profit referred to as The Nature Conservancy. The watch was the just-announced Patek Philippe Nautilus Reference 5711/1A-018 in metal, double signed “Tiffany & Co.” The dial is introduced in a “Tiffany Blue” colorway. My private nickname for this watch is the “Nauti Tiffy.”
Patek Philippe CEO Thierry Stern has introduced that the Nautilus is on its approach out of the corporate’s catalogue. Many speculate that the 170 examples – one for annually of Tiffany’s existence – of the Nauti Tiffy are a swan music for the decades-old Gérald Genta design. What’s attention-grabbing is that the public sale sale of the Nauti Tiffy instance consigned by The Nature Conservancy was completely choreographed with the discharge of the identical watch via retail channels. I’ve famous on my weblog Horolonomics that that is a part of a creating sample wherein a model auctions one instance of a very novel watch design upon its world debut.
The primary instance of this that I’m conscious of befell earlier in 2021, when Audemars Piguet auctioned a particular model of its new Black Panther Royal Oak Idea throughout a YouTube livestream that includes a cavalcade of stars in April 2021. That piece distinctive offered for over $5 million. After the public sale, the “commonplace” Black Panther Royal Oak was offered at a six-figure retail worth.

Tiffany & Co double-signed Patek Philippe Nautilus Reference 5711/1A-018
I wasn’t sure how the Nauti Tiffy public sale would play out on condition that the watch was new to market in so some ways. As time handed, although, it grew to become clear that the rapt consideration of the watch group was targeted upon this public sale lot.
I had an opportunity to see the watch within the metallic at Phillips’ New York location on a night earlier within the public sale week. As I made my approach via the gang, I acknowledged a number of distinguished watch journalists and collectors. In conversations in regards to the public sale, I might periodically determine the Instagram deal with of the individual I used to be speaking with and suppose to myself, “Oh yeah, their account is superior!” Lovers had been undoubtedly passionate about testing the Nauti Tiffy.
Once I pulled up the livestream of the public sale on Saturday morning, a curious word greeted me even earlier than the public sale started: lot 1T, the Nauti Tiffy lot, was on display screen with textual content indicating that a gap bid of $4.2 million would lead issues off. At that time, any residual doubts in regards to the desirability of this timepiece had been extinguished. Curiously, the bidding didn’t start at that worth, however Bacs bought there finally.
Inevitably, the variety of bidders dwindled because the bids elevated in astonishing increments. In the end, just one bidder remained. Recognized as a web based purchaser from New York, the hammer fell at a worth of $5.35 million. The client’s premium on the sale was an extra $1.153 million. Phillips will donate this sum to The Nature Conservancy.
Interested by New York state gross sales tax on the acquisition? A further $475,000 (roughly), though there’s some risk the client might not need to pay this below New York regulation.

Tiffany & Co double-signed Patek Philippe Nautilus Reference 5711/1A-018
Wider implications of the sale of the Patek Philippe Nautilus Reference 5711/1A-018
First, an environmental charity holding a Charity Navigator ranking of 93/100 for accountability and transparency will obtain a really sizeable donation. Actually, this single watch sale represented 8.5 p.c of The Nature Conservatory’s reported complete money readily available in 2020. That could be a pretty gorgeous consequence, and I believe we are able to agree our surroundings wants each little bit of assist it could actually get.
Second, the client will nearly actually find yourself paying lower than $5.35 million, and even the $6.5 million with purchaser premium that shall be extensively reported within the press. We are going to doubtless by no means know precisely how a lot this purchaser pays as soon as we think about the tax implications. From the U.S. Inner Income Service (IRS): “Donors who buy objects at a charity public sale might declare a charitable contribution deduction for the surplus of the acquisition worth paid for an merchandise over its honest market worth. The donor should be capable to present, nonetheless, that she or he knew that the worth of the merchandise was lower than the quantity paid.”
For instance, an American purchaser within the prime tax bracket can fairly doubtless deduct 37 p.c of a good portion of this buy from their taxes. That deduction may very well be price roughly $1.98 million to the client, yielding a web value of roughly $4.5 million.
That is nonetheless an expensive sum of cash. The retail worth of the Nauti Tiffy is roughly $53,000. Even after the tax deduction, the client paid almost 85 occasions the retail worth of this watch. An analogy could be paying $425 for a $5 Starbucks espresso.
At this level, the top scratching begins. Simply earlier than the Phillips public sale, gray market vendor Jomashop listed a Nauti Tiffy on the market at a worth of $2.5 million. It was nonetheless accessible at this worth quickly after the hammer dropped at Phillips. This is without doubt one of the more unusual situations that I’ve witnessed in the case of the watch market. We all know there was a minimum of one underbidder at a worth of $5 million, elevating the specter that an middleman may purchase the Nauti Tiffy from Jomashop, promote it to the underbidder for $5 million, and pocket a cool $2.5 million. The plot has undoubtedly thickened.

Motion of the Tiffany & Co double-signed Patek Philippe Nautilus Reference 5711/1A-018
However wait, there’s extra! We all know that manufacturers like Patek Philippe should not keen on flipping, the situation the place somebody buys a watch at retail after which rapidly resells it on the going price on the secondary market. I’ve made the level on my weblog that flipping is the consequence of a retail worth that’s too low and the truth that the watches should not going to those that worth them probably the most.
For instance, within the case of the Nauti Tiffy that offered at Phillips, we all know that the retail worth was roughly 85 occasions decrease than somebody on the earth was prepared to pay (a minimum of prepared to pay when a specific charity was concerned). In an alternate universe the place the public sale didn’t happen, if the profitable bidder had not obtained an allocation, they’d have very simply satisfied another person to promote them their Nauti Tiffy for the value of $4.5 million. Not less than one flip would have occurred.
I don’t consider this mispricing of luxurious watches will persist. Patek Philippe, and quite a lot of different manufacturers, are merely leaving an excessive amount of cash on the desk. For instance, suppose that Patek Philippe offered the run of 170 Nauti Tiffys to Tiffany’s for $26,500, or half the retail worth (this may enable Tiffany’s to additionally revenue on the watch on the retail worth). Meaning Patek Philippe’s complete income from the run of 170 watches would have been roughly $4.5 million, or roughly the value paid for that single Nauti Tiffy at Phillips at this time (after we deduct the client’s tax profit).
It’s actually beneficiant to go away that sort of cash on the desk when promoting watches, however I simply don’t understand how lengthy a model shall be prepared to forego a lot income.

Tiffany & Co double-signed Patek Philippe Nautilus Reference 5711/1A-018
If the market fundamentals of the posh watch business stay unchanged, I believe it’ll develop into more and more doubtless that there shall be a seismic shift in some course. If allocations had been offered at public sale as an alternative of at a hard and fast retail worth that’s too low, manufacturers would earn extra income and flipping would subside.
I don’t know if there’s any model with the need to withstand transferring in that course. Whereas radically greater costs for timepieces from Patek Philippe, Audemars Piguet, or others could seem untenable, once you examine at this time’s costs from the “holy trinity” to these charged by manufacturers like Richard Mille or Jacob & Co, they start to appear extra credible.
The opposite risk is that the market fundamentals do change, and consumers develop into unwilling to pay six- or seven-figure costs for luxurious watches. It’s actually price in search of indicators that that is coming, however I for one haven’t seen any but.
One factor is obvious: 2022 will doubtless be a really attention-grabbing yr for the posh watch business.
Fast Details Patek Philippe Nautilus Reference 5711/1A-014
Case: 40 x 8.3 mm, stainless-steel
Motion: computerized Caliber 26-330 S C, 28,800 vph/4 Hz frequency; 35-45-hour energy reserve, Gyromax stability, Spiromax stability spring, Patek Philippe Seal
Features: hours, minutes, seconds; date
Limitation: 170 items
Retail worth: approx. $53,000
Public sale estimate: “in extra of $50,000”
Public sale worth realized incl. purchaser’s premium: $6,503,500
Brendan M. Cunningham, PhD has a forthcoming ebook on the historical past of Rolex. You’ll be able to be taught extra by visiting www.sellingthecrown.com and join electronic mail updates on the venture.
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