A decade ago, if you told your friends that you were “going CPO”, they would have assumed you were talking about buying a manufacturer-restored used car. Nowadays, CPO or “Certified Pre-Owned” has become an established term in watchmaking parlance too – and an appealing option when it comes to purchasing your next luxury timepiece.
WHAT IS CPO?
In short, Certified Pre-Owned means the watch brand itself – or one of its approved CPO program partners – has authenticated a timepiece as one of its own. Procedures differ from brand to brand but CPO typically entails an expert inspection to ensure the watch is genuine, a full servicing of the movement and a restoration of the watch’s dial, case, crystal and strap. Such watches usually come with a fresh international warranty.
Rolex has been in the news over the past year as it began rolling out its Certified Pre-Owned program. To do so, the brand has partnered with retail powerhouses like Watches of Switzerland, the 1916 Company and Bucherer (Tourneau in the USA) which Rolex acquired last year.
But long before The Crown entered the CPO fray, small-volume, high-end independent watchmakers led the way: between 2015 and 2020, Richard Mille, F.P.Journe, MB&F and Urwerk all began operating their own in-house pre-owned certification program where they buy back, refurbish and resell their pre-owned watches.
To be eligible for Rolex’s CPO scheme, the watch has to be over three years old. MB&F and F.P.Journe will consider repurchasing models that are no longer in production. Zenith, Vacheron Constantin, Cartier and Jaeger-LeCoultre, meanwhile, have all developed their own carefully curated capsule collections of highly coveted vintage pieces, all sourced, authenticated and immaculately restored in-house.
Rolex has been in the news over the past year as it began rolling out its Certified Pre-Owned program.
WHAT’S IN IT FOR THE KEY PLAYERS?
So why would watch brands – and groups like Richemont who own the three last-mentioned brands – and since 2018 the pre-owned trading platform Watchfinder – want to move into the resale market?
Of course, a principal driver is profit: according to M&BD Consulting’s recent study on the challenges facing luxury watchmaking – conducted in partnership with GMT Publishing – estimates suggest the value of the secondary market will reach CHF 35 billion by 2030, representing more than half the value of new watches sold. It stands to reason, then, that a watch company will want a slice of this market as another revenue stream and enjoy profiting, repeatedly, from a product it has made.
Just as importantly, CPO allows brands to have a say in the quantity and condition of the pieces that are in circulation, as well as their market value, which can positively influence the perception of the brand and sales of its new watches.
However, developing an offer on the secondary market is, as noted in M&BD Consulting’s report, a challenging undertaking and requires considerable investment – from the implementation of systems to repurchase and resell watches to the hiring of competent watchmakers equipped to perform authentication and restoration.
It stands to reason, then, that a watch company will want a slice of this market as another revenue stream and enjoy profiting, repeatedly, from a product it has made.
As for customers, CPO means they can buy collectible second-hand watches with confidence, reassured by the brand’s seal of approval and updated warranty. And for those making their first foray into pre-owned, it helps to remove the headache of researching both the timepiece and its seller.
But that confidence comes at a premium: customers commonly pay a mark-up for a watch listed through CPO programs compared to non-certified models. In the case of Rolex, reports suggest this CPO premium can be between 20 and 30 per cent, sometimes more.
On the other hand, if you have carried out your research and know your stuff – or can rely on a trusted seller or dealer who knows their stuff – then you might not feel the need to pay the extra cost that CPO invariably incurs.
Either way, Certified Pre-Owned is set to grow further. So, for your next watch, will you go CPO?
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