The number of sophisticated fake watches uncovered by pre-owned dealer Watchfinder & Co is rising, with Rolex replicas accounting for about half of the knockoffs.
As many as 10% of the watches received from sellers last year were determined to be fakes during an authentication process, according to Watchfinder Chief Executive Officer, Arjen van de Vall.
“Rolex is the most aspirational luxury watch brand and the highest demand — hence — it’s the most replicated,” van de Vall said in an interview with Bloomberg Radio on Tuesday.
Fakes are also becoming more sophisticated and harder to spot. Watchfinder used to be able to identify about 80% of bogus time pieces by sight alone but now that’s just 20%, he said. Employees at the company, owned by Swiss luxury conglomerate Richemont, now need to perform more detailed inspections including opening watch casebacks and checking movements to identify the high-end knockoffs.
Fake or replica luxury watches are a growing problem in the €25 billion ($27.3 billion) per year secondary watch market with some counterfeit versions fooling even the most knowledgeable experts.
Omega, part of Swatch Group AG, said last month that three former employees were part of a criminal plot to sell a ‘Frankenstein’ Omega Speedmaster, that was an amalgam of mostly authentic parts from other vintage watches. The watch sold at auction in 2021 for more than $3 million, the highest price ever paid for an Omega timepiece. The company itself was the buyer and has said it was the victim of a criminal conspiracy.
Last year, Rolex began a certified pre-owned program that authenticates used watches sold through authorized dealers.
It isn’t just Rolex watches that are being faked or altered with inauthentic parts and components.
“You see replica or clone watches — very, very high quality watches — of virtually all of the big luxury brands,” van de Vall said. “The whole gamut.”
The rising fraud in pre-owned watches comes after prices for the most desirable models spiked to unprecedented levels during the pandemic before pulling back sharply.
Secondary market prices have declined by about 18% in the past year, according to the Bloomberg Subdial Watch Index, which tracks prices for the 50 most traded luxury watch models by value including Rolex, Patek Philippe and Audemars Piguet.
Less volatile prices in the watch market as speculators exit is welcome, van de Vall said.
“We’re not interested in the next crypto run. For us, it’s not about speculation, stability is good.” –BLOOMBERG