Chrono24 GmbH cut about 13% of its workforce after prices plunged for the most sought-after Rolex timepieces. It’s the biggest dedicated online marketplace for luxury watches.
Prices plunged on the Patek Philippe and Audemars Piguet timepieces.
The company eliminated 65 jobs, co-CEO Tim Stracke said. It shifted its operations focus in the U.S. to Miami from New York, and to Japan from Hong Kong in Asia. 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 secondhand prices for the top brands has been linked to rising inflation, slowing economic growth in the U.S. 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.
Economic realities affecting online marketplace Chrono24
Chrono24 hired about 100 workers last year amid the boom. Stracke said the value of transactions conducted on the platform increased about 28% in 2022. However, 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% 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% 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% to about £84,000, while an Audemars Piguet Royal Oak with a blue dial has tumbled almost 29% to about £57,000.
Chrono24, founded in 2003, has about half a million watches for sale on its platform at any given time. They come from some 3,000 dealers and 30,000 private sellers.
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