Chrono24 GmbH, the biggest dedicated online marketplace for luxury watches, cut about 13 percent of its workforce after prices for the most sought-after Rolex, Patek Philippe and Audemars Piguet timepieces plunged.
The company eliminated 65 jobs as it shifted the focus of its operations in the US to Miami from New York, and to Japan from Hong Kong in Asia, Co-Chief Executive Officer Tim Stracke said. It also offered severance packages to some workers at its headquarters in Karlsruhe, Germany.
The reductions underscore the losses faced by dealers who purchased expensive watches during an unprecedented price surge in 2021 and early 2022. Since then, values for the most desirable models have plunged on secondary markets and on resale platforms such as Chrono24.
“We have seen very volatile, you could call it a roller-coaster situation, in the industry,” Stracke said.
The decline in second-hand prices for the top brands has been linked to rising inflation, slowing economic growth in the US and Europe and the crash in cryptocurrencies. The bursting of the crypto bubble erased paper profits for some investors who had turned to luxury watches as a new speculative asset class.
The supply of previously rare pre-owned watches on secondary markets has also increased significantly, driving down values.
Chrono24 hired about 100 workers last year amid the boom. Stracke said the value of transactions conducted on the platform increased by about 28 percent in 2022, although growth slowed in the second half.
“We are adjusting to current economic realities,” Stracke said.
The Subdial50, an index compiling prices of the 50 most traded watches by value, consisting mostly of Rolex, Patek Philippe and Audemars Piguet models, has dropped 33 percent in the past 12 months. UK-based Subdial is a watch trading platform and seller of second-hand luxury timepieces.
Among sought-after pre-owned models, the price of the Rolex Cosmograph Daytona in platinum has fallen 28 percent to about £83,000 ($102,679) in a year, the Subdial data shows. The Patek Philippe Nautilus 5711 with a blue dial has dropped 35 percent to about £84,000, while an Audemars Piguet Royal Oak with a blue dial has tumbled almost 29 percent to about £57,000.
Chrono24 has about half a million watches for sale on its platform at any given time from some 3,000 dealers and 30,000 private sellers. The company was founded in 2003.
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