© The Financial Times Ltd 2015 FT and 'Financial Times' are trademarks of The Financial Times Ltd.
January 19, 2014 6:01 pm
Have your eye on an Audemars Piguet Royal Oak but cannot quite afford it? Now you can hire it, following the launch last year of Eleven James, a luxury watch rental site and membership club.
The company is hiring out timepieces from IWC, Patek Philippe, Rolex and Vacheron Constantin, among other sought-after labels, and believes its business model will work.
Randy Brandoff, founder and chief executive, says: “When I was the first employee of Marquis Jet [the aviation services company] in 2001, we were at the start of a new trend now called luxury collaborative consumption.”
Mr Brandoff left the aviation industry as chief marketing officer of NetJets, a private jet hire company, at the end of 2012 to see if he could apply the same model to watches. The name Eleven James, he says, is based on the 11 specially adapted gadgets presented to James Bond by Q, the MI6 boffin, in the spy thriller films.
Membership fees range from $249 to $1,599 a month depending on the retail prices of watches borrowed and the frequency with which members swap timepieces. Members will also have access to monthly events, such as trips to the Super Bowl or Art Basel.
Mr Brandoff raised seed financing from strategic investors with plans for expansion capital in 2014.
But some analysts are sceptical. David Sadigh, founder and chief executive of Geneva-based Digital Luxury Group, which publishes the World Watch Report, has fielded market enquiries over the years and considered the market’s potential. He says: “This tops out at 100,000 potential members worldwide maximum, so it’s impossible for it to become a global trend.
“Watches aren’t the same as bags. Most handbags’ lifetime value is short, so rental makes sense. But the lifetime value of a watch is 50-100 times longer.
“NetJets isn’t just about avoiding ownership – it’s access to the same service without the pain, thus solving a problem. With [watch hire] the only opportunity is to wear without buying it.”
Added to this, he says, is the potential for embarrassment in social situations. “What happens when you wear an expensive watch is people ask you about it, and you tell a story. ‘It was my father’s ... It’s my wedding watch.’ So what do you say when you rented it? True, watch people will die to buy a new watch – they will never rent one, since from a status standpoint it’s difficult to justify.”
Others fear Mr Brandoff may be miscalculating the psychology of men’s attachment to their watches. Al Tehrani, a GIA-accredited watch and jewellery expert based in New York, says the current Eleven James model that allows members to hold on to timepieces for two-month rotations will not work.
“This would have to be structured like a lease, in that you can keep a watch longer than six months. Men like to have a longer relationship with their watch. They put it on their nightstand, look at it and remember: ‘I wore it here, and I wore it there’.”
Mr Brandoff, however, is under no illusions that he is chasing the “Paneristis” of the world (as Richemont’s tight-knit group of Panerai collectors is known). Rather, he says, Eleven James is chasing commitment-phobes or consumers with a history of impulse purchasing gone wrong. A younger generation of customers used to access rather than ownership might well follow Mr Brandoff. The company plans to open in Asia, Mexico and Russia, from which it is already fielding requests.
“I’m not pretending I know everything about watches,” he says. “It would ring hollow to any true collector. I’m reaching out to the right people.
“What I do know is clubs. Men love clubs. Wine clubs, beer clubs, golf clubs ... Guys take things they love and hang out with other guys who love those things.”
Please don't cut articles from FT.com and redistribute by email or post to the web.