Rare Patek Philippe watch fetches record auction price

A rare Patek Philippe became the most expensive wristwatch ever sold in an auction as it went under the hammer for US$11 million ($14.5 million) at a sale by Phillips in Geneva.

The stainless steel timepiece, one of only four known to exist, was sold for more than three times the $3 million estimate.

The bidding ended after 13 minutes in a duel between two phone bidders.

New York and London-based Phillips opened the Geneva fall watch auction season Saturday and Sunday, raising 27.5 million francs ($36.5 million). That's more than the total estimates combined for timepiece sales at Christie's and Sotheby's scheduled this week.

Vintage in vogue

Rare vintage timepieces are benefiting from their scarcity as modern luxury watch producers endure the worst slump in demand in years. Producers such as Cartier have had to buy back models that failed to sell after the industry produced more than 20 million timepieces a year for more than two decades.??

The top lot, model number 1518, was a rare perpetual calendar chronograph – a watch that adjusts for leap-years – that Patek Philippe produced in 1943.

Phillips expects to sell about 100 million Swiss francs of timepieces this year, auctioneer Aurel Bacs said in an interview earlier this month.??In the two years since the firm hired Bacs, the lower-profile auction house has cornered the market in the hardest-to-find watches.

The previous record price for a wristwatch in auction was a US$7.3 million Patek Philippe sold by Phillips last November.

Swiss cuts

Meanwhile watch giant Richemont plans to cut more than 200 watchmaking jobs in Switzerland, according to the Unia trade union, as the jeweller scales back further in response to weakening demand.

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The biggest cutbacks will probably be at the high-end Piaget and Vacheron Constantin brands, a Unia spokesman said by phone. Richemont contacted the union at the end of last week and will meet with employee representatives tomorrow at three Swiss sites, he said. Richemont declined to comment.

"It shows you they don't expect watch demand to bounce back strongly for the next year or two," said Jon Cox, an analyst at Kepler Cheuvreux in Zurich.

"They're preparing for the new reality in the industry."

New crisis

News of the cuts comes 10 days after Chairman Johann Rupert said he's abolishing the CEO position in the company's biggest management shakeup since 2009. The Swiss watch industry has been grappling with the most challenging times since the quartz crisis of the 1970s and 1980s, when battery-powered watches threatened to make mechanical timepieces obsolete.

Withering demand in Asia has spread to Europe and the U.S. this year and has led Richemont to buy back unsold inventory from retailers and refocus on more affordable pieces.

Bloomberg