Officine Panerai CEO on Auctions, Flippers and Special Editions

Last December, a timepiece by Officine Panerai – a Reference 6154 diver’s wristwatch made for the Egyptian Navy — sold for $326,500 at Christie’s New York against a pre-sale estimate of $80,000-$120,000. A similar watch had sold at Christie's Geneva in 2009 for "only" $143,839. This new record was the highest price ever paid at auction for a Panerai timepiece and the amount paid by the Swiss collector even surprised Officine Panerai CEO Angelo Bonati. “Fifteen years ago, when I bought 50 watches around the world to create our museum, I paid the equivalent of 2,000 euro for the same watch,” he recalled in a recent interview with ARTINFO.COM, “so even factoring in inflation… it’s quite an achievement.”

Over the years, Panerai timepieces have become highly collectable, not only the vintage pieces, pre-dating 1997 when the Compagnie Financiere Richemont took over the Italian watchmaker, but also Special Edition watches that the brand regularly released. ARTINFO talked to Bonati about collectors, flippers, and auction prices.

Only a few watch brands have become highly collectable at auction. To what do you attribute the success of Panerai?

On one side, the quantities released remain quite small, and on the other, we’ve really worked on upgrading the brand, investing to make it a success. When we bought it in 1997, it was not a brand, it was just a watch. There was a history of values, a history linked to the heroes that fought the Second World War, but nothing related to the watch industry. We believed in the potential of the case design, which we felt was something different, but the content of the watch itself was poor. So we invested immediately in developing the movement. We also bet on keeping the design and the history of the watch, and not making changes all the time.

Amongst collectors, there is a whole mystique about getting your hands on a limited edition Panerai. I’m told it’s quite hard, is there a deliberate strategy to make your brand more sought after and collectable?

Nothing of that. We don’t set rules to acquire the pieces; we leave the market to do this. The Special Editions are distributed to our own Panerai boutiques just for one reason, to give an advantage to our boutiques compared with retailers who can release some discount on the watches. But we don’t establish certain rules. Of course the collectors jump on these the day we present those watches. At SIHH, within an hour of us showing those new watches, the boutiques were full of orders. Why? Because those who know Panerai, know we start to show the products on line the day before, they try to understand the price, etc, and reservations start to arrive, and we respect the chronological order. It’s first in, first out. Occasionally we may give some pieces to a dealer with whom we have an excellent relationship and who has a high-profile client, but it’s rare.

Some collectors complain you really need to be known by the boutique and have already bought some Panerai watches to get your hands the new Special Editions.

Amongst collectors, there are so called flippers, people who buy and resell quickly to make a quick return. When we identify people who do this, we try not to sell to them these special editions. This is to be more coherent with our sale policy, because those flippers are always the first to book online. The Luminor Submersible 1950 3 Days Automatic Bronzo, which was released two years ago, is now selling for 3 times its original price, that’s why a lot of people try to speculate a lot on these special editions. I’m used to receiving furious letters now.

When did you start issuing limited editions?

Right from the beginning, that was the first thing we did. In the stock, I found 60 brand new Rolex movements, and immediately, I replicated the Radomir using that mechanism. We sold it for 20,000 euros, which in 1998 was a lot, but it was sold out in 2 weeks. So it gave us an indication. The concept of rarity was clear in my mind. It actually comes from the history of the watch because in 60 years the brand had only brought out 300 pieces in total: they were only produced for the military.

Are you following the auction market for Panerai?

In the past yes, but now only for the exceptional pieces.

Does the value of non-limited edition watches also improve with time?

It depends on the watch.

At the last SIHH 2013 in January, Panerai released 4 special editions: the PAM00364, the Son of Subzilla; the PAM00508, Luminor Submersible; the PAM00507, Luminor Submersible ‘1950,’ three days power-reserve Automatic Bronzo; and the PAM00446 pocket watches. Are they all sold?

Awaiting shipment! Everything was sold to the boutiques on the first day. For the new Bronzo, the second day we had 3,500 orders! But we decided to stay at 1,000. Our production is limited and the special editions are really made for the collectors who are passionate about the brand. To see the latest Special Edition of Panerai click on the slideshow.

as first published on BlouinArtinfo.com