WatchBox is changing its name as part of a wider US expansion that will make it one of the biggest sellers of new and used Rolex watches.
The luxury watch retailer, that previously won backing from Pershing Square Capital Management LP founder Bill Ackman and NBA great Michael Jordan, is buying two watch and jewellery companies in the US and will be renamed The 1916 Company.
The US deal adds five Rolex authorized dealerships to its existing Rolex store in Philadelphia. The total business currently generates annual sales of more than $500 million.
As part of the restructuring the 1916 Company’s retail stores will also become official Rolex Certified Pre-owned dealers, meaning they will only sell used watches that have been authenticated by Rolex.
Bringing new and used watch sales under a single brand name will give The 1916 Company more heft to compete in a rapidly consolidating industry. Global retail sales of luxury Swiss watches totaled about 48 billion Swiss francs ($53 billion) in 2022, according to Morgan Stanley estimates. The market for used timepieces reached about $24 billion in 2022 and is expected to grow by 9 percent a year to $35 billion by 2026 as prices rise and more people begin collecting watches, according to Boston Consulting Group.
Financial details of the all-cash transactions were not disclosed. WatchBox is buying Radcliffe Jewelers and its Rolex dealerships in Baltimore and Newark, Delaware as well as Hyde Park Jewelers with official Rolex stores in Denver, Newport Beach, California and Scottsdale, Arizona.
WatchBox, which has about $200 million in inventory, already has outlets in Switzerland, Hong Kong, Singapore, Shanghai, and Dubai, as well as New York, Los Angeles, Miami, and Boca Raton, Florida, where customers can inspect and purchase pre-owned luxury watches. Certified used Rolex watches won’t be sold at these locations, however. The average transaction purchase price through WatchBox is about $30,000.
The expansion by the new 1916 Company follows a major shift into retail by Rolex, which bought fellow Swiss company Bucherer AG and its 100 stores in August.
Rolex produces more than a million timepieces per year with sales of 9.3 billion francs, according to Morgan Stanley estimates. The brand entered the used market last year with a surprise move to certify its pre-owned timepieces through retailers like Bucherer, Watches of Switzerland and now The 1916 Company.
“We’ll probably be one of, if not the largest certified pre-owned Rolex jeweller in the world,” Danny Govberg, the co-founder of WatchBox and executive chairman of the new company said.
The 1916 Company takes its name from the year Govberg’s grandfather founded the family’s eponymous jewellery store in Philadelphia.
WatchBox was founded in 2017. Its valuation has edged close to $1 billion, Bloomberg News has previously reported. Justin Reis, another WatchBox co-founder who will be the chief executive officer of 1916, said the company has no plans or need to raise more capital or go public through a share listing any time soon.
The company also owns the independent Swiss watch brand De Bethune, which will remain a separate entity.
By Andy Hoffman
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