Well-known pre-owned watch dealers, Watchfinder, have officially found a new home in the form of the Richemont Group, who announced they had acquired 100% of the UK-based retailer late last week.
Founded in 2002, Watchfinder has seen significant success over the past decade and a have since its inception, with last year’s sales totaling at about $115 million USD. One of the most vital assets to this success is likely the fact that they boast their own in-house service center, where in fact over half of their employees work. The service center is primarily for ensuring that watches have been given a full service prior to being sold. In addition to being a predominantly online retailer, Watchfinder runs seven brick and mortar locations throughout the United Kingdom.
For Richemont, this acquisition comes shortly after acquisition of 100% of Yoox Net-à-Porter for $3.3 billion USD.
Alright geeks, so here’s what I think about this one – Richemont might well be run by geniuses. No no, stay with me now. In the course of half a year, the Richemont Group has acquired two MASSIVE names in the online luxury retail space. Mr. Porter, for those not familiar with the site, offers not only luxury clothing and shoe/boot brands for sale, but also accessories and watches. Now that it is owned by Richemont, it has direct access to all of Richemont’s watch brands as well as jewelry brands (though Cartier falls into both categories here).
Then we have Watchfinder, which is, as far as I’m concerned, an absolutely brilliant move. For Richemont, this is an opportunity to do a couple of things – the first is to now directly control and manage their own pre-owned market, or at least a segment of it. The second, and perhaps the more interesting, is that they can now use Watchfinder as a means of encouraging the purchasing of new pieces through trade-ins. All they have to do is make Watchfinder an AD for all of their watch brands, supply the company with new pieces, and then allow it to accept trade-ins so long as it’s one Richemont brand for another, if they want to be super strict about it. In this way, their odds of being able to sell new pieces will increase, as traditional AD retail models don’t necessarily encourage this level of interaction between the old and the new. Further, since Watchfinder sells pre-owned anyway, means that the trade-ins can be serviced, listed, and sold again.
What I’m really saying is maybe Swatch Group wants to take some notes here, because the guys and gals at Richemont are definitely making a big move.