SINGAPORE — Has the failure of Eleven James, the American pioneer in renting luxury timepieces that suddenly closed last summer, dampened investors’ or users’ enthusiasm for luxury timepiece rentals?
On the contrary.
The sharing economy so beloved of millennials — who seem to prefer renting everything from bridal gowns to transportation — is continuing to spread among watch fans in France, the United States, Singapore and beyond. And, operating almost entirely through the internet, there is little sign of it abating.
For example, Sidne Yeo, a 28-year-old consultant based in Singapore who advises Australian companies that want to penetrate Chinese e-commerce, already had a collection of five watches. But in 2018 he decided to join Acquired Time, an online club based in the city-state that had been introduced in March the previous year.
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Mr. Yeo said he wanted to try watches that he probably would buy at some point — like the so-called “Rolex Hulk,” a Rolex Submariner with a green bezel.
“I thought it was a great idea,” he said. “I decided to give it a shot.”
Roy Tong, Acquired Time’s co-founder, had used his company’s money to amass a collection of about 40 watches now grown to 80, mostly for men, with what he estimated as a total retail value of about 1 million Singaporean dollars ($740,465). He said he wanted to create an online business that would allow members to “test drive” watches before purchase.
“At the beginning, I thought that my clients would be fresh graduates in their 20s and 30s who were purchasing their first watch,” Mr. Tong said, “but we soon discovered that the bulk of our clients is made of senior professionals who already have a watch, and often more than one.”
For these customers, he said, Acquired Time is like an “extension of their watch collection.”
The club requires a six-month membership and has three fee levels that correspond with the type of watch that may be rented: Subscribers who pay 175 Singapore dollars a month have access to watches like a classic IWC Pilot Mark XVIII Heritage (which has a retail price in the United States of $4,350). The 275-dollar subscription includes watches like a Rolex Submariner (which retails for approximately $7,500), and the 375-dollar subscription, watches like an Audemars Piguet Safari (approximately $26,000).
Prospective new members generally reach Mr. Tong through the company website or a WhatsApp message; they are vetted, which can take about three days, and, if successful, a company concierge then delivers the member’s watch to his or her home. About 100 people already are Acquired Time members, and Mr. Tong is planning to expand the business into Hong Kong this month.
And in recent months two similar businesses have begun operating in Singapore: TenTwo Club, established by Dan Kruimel, Ronald Chew and Dan Mills, and Specter One, founded by Sendi Heng.
At the start
Eleven James began as a watch rental business, founded in 2013 in New York by Randy Brandoff. He had been the chief marketing officer of NetJets, the Berkshire Hathaway subsidiary that sold part ownership or shares of private business jets; he took the role of chief executive in his new online business.
But the model had changed to memberships by the time the club was reintroduced in 2017, and Olivier Reza, artistic director of the Paris-based jewelry house that bears his family name, had become chief executive. He had been an early investor in Eleven James.
“We are focusing on what really matters, which is the experience of beautiful things,” Mr. Reza said in an interview with The New York Times. He talked about the company’s pending expansion into jewelry and contemporary art, saying that renting luxury goods was the wave of the future.
Then, last August, the watch blog Hodinkee reported that the company had failed to find investment, lost its credit line and was shutting down. Several employees, the story said, refused to comment. The failure, however, seems to have been the business — not the idea.
Sharing businesses from Rent the Runway to Zipcar have been growing. For example, the “End of Ownership” chapter in “The State of Fashion 2019” report by the Business of Fashion and McKinsey & Company outlined, “the shift to new ownership models is driven by growing consumer desire for variety, sustainability and affordability and sources suggest that the resale market, for instance, could be bigger than fast fashion within 10 years.”
A survey of more than 275 fashion industry executives, used to help develop the report contents, found that 41 percent of the respondents felt the rental market would be more relevant to consumers this year than it was in 2018.
And Alexander Thiel, a partner at McKinsey in Zurich, said that millennials, in particular, want their purchases to suit their lifestyles and “luxury is becoming more experience focused,” suggesting that the idea of being able to wear numerous luxury watches for a fraction of their cost is appealing.
The business model
Yet even as online watch clubs are expanding, they aren’t all using the same business model.
Mr. Tong, for example, bought his club’s stock of watches from private collectors in Asia. He knows that some other clubs use watches offered on consignment by their owners — a method that Eleven James used that is also employed by Singaporean Specter One — but he said he doubts Asian collectors would be interested in risking their timepieces to “earn a few hundred dollars a month.”
Yet consignments have been the cornerstone of Luxothèque, a rental company founded four months ago in Paris by Thomas Blavet, a former manager at Cartier and Chaumet, and which already has served about 25 customers. Its online site displays more than 100 watches, men’s and women’s models by Rolex, Cartier, Jaeger-LeCoultre and even a French diving watch specialist, Ralf Tech.
“The stock comes from professional and private owners who entrust us with their pieces, and we pay them after each renting, like Airbnb in a way,” Mr. Blavet said, adding that he plans to add an owners’ section to the website so they can monitor rentals and income independently.
Consignments are also being considered as a way to expand Watch It, an online club based in Paris that Vincent Robert and Pierric Soustre founded in 2016.
Mr. Robert had bought himself a Rolex for his 25th birthday and said he realized the next day that he was already bored with it. He wanted a classic leather watch for a dinner reception and a Hublot to wear to a sporting event.
A quick search for “rent a watch” gave him zero results, so he called Mr. Soustre and said, as he recalled, “I need to talk to you about a new business idea.” Two days later their company was born.
Mr. Robert said most of the club’s current stock of about 20 watches were acquired through loans from a bank and one of Mr. Soustre’s relatives. But they want to expand into consignments, although, Mr. Robert added, the security of such watches would be a concern.
Vyrent, however, found that the scores of watches sitting idle in wholesalers’ stockrooms and retailers’ drawers were the way to supplement its offerings. The New York-based online club has made arrangements with scores of such businesses so that, when any of its approximately 1,000 members selects one of their watches, the retailer or wholesaler is paid a portion of the person’s membership fee. “This way we can guarantee our customers access to thousands of watches,” said Michael Oshinaya, the company’s executive director of corporate strategy. And, this stream has the advantage of not burdening the balance sheet.
Vyrent offers three-, six- and 12-month subscriptions, with rates matching watch categories. Members, then, can exchange watches as many times as they wish, wearing a stainless steel Audemars Piguet Royal Oak one week and a full diamond yellow gold presidential Rolex Day-Date II the next. There also is a “rent to buy” service that offers the opportunity to rent a watch before committing to a purchase.
Even watch companies are getting into rentals. As the Swiss maker DuBois et Fils — which offers 20 of its models to shareholders and even a rebate for posting travel photos — asks on its site: “Why buy when you can rent?”