Auctions: Grand Seiko Makes A Grand Entrance On The Auction Circuit

For the first time ever, Grand Seiko is appearing in a Phillips Geneva watch auction. "The Geneva Watch Auction: XIII" features not one, but two models from the brand. Included alongside popular (mainly Swiss) brands are lot number 16, a modern Grand Seiko SBGD001 , and lot number 173, a vintage Grand Seiko 61GS V.F.A . dating to 1972. While the inaugural appearance of Grand Seiko on the Phillips auction circuit is noteworthy, it would be unfair to say that these are the very first high-end models from the house of Seiko to appear. Last November there was a Credor Eichi II among the lots . It even sold for higher than its estimate. The Credor is the superlative expression of Seiko, coming out of Seiko's Micro Artist Studio in Shiojiri with a platinum case, porcelain dial, and a Spring Drive Credor Caliber 7R14. Still, it’s notable to see GS playing at this level. The Eichi II is a very rare watch. Only 20 are produced per year (in addition to a very small number of Grand Seiko models, the entire studio makes about 25 Eichi II watches; the other five are Credor chiming models). They cannot be considered "mainstream" by any means, and even collectors intimately familiar with core Seiko models are often mystified by Credor's unique positioning within the brand. But when it comes to Grand Seiko, there's been a very focused and deliberate push in the U.S. and Europe to shift the brand upmarket. The Credor Eichi II Joe Thompson explained in detail the reason Grand Seiko has become more present in the market over the last few years. It isn't an accident; instead, it's a very deliberate strategy carried out by Seiko. From Thompson's analysis : This fall, SWC reorganized its U.S. company, creating a new subsidiary called Grand Seiko Corp. of America (GSA). "By establishing this new company, we are committed to changing our business model in this market," Akio Naito, GSA's chairman and CEO, told HODINKEE. "This move expresses our focus on the high end of the market, on Grand Seiko as opposed to core Seiko. The high end is the future of the brand in this market." Seiko's corporate strategy has proven effective, and the brand has garnered attention from the luxury buyers that Seiko has targeted. Paul Boutros, Phillips’ Head of Watches in the Americas, says that the inclusion of the Grand Seiko lots in the sale simply reflects collector demand. "We reject 70 to 80 percent of the watches presented to us,” he says. “We don't want run-of-the-mill watches; we want to deliver things outside our normal aperture." There isn't any existing market data about Grand Seiko models sold through Phillips. It's a virtually unprecedented occurrence, so the estimate pricing strategy in the case of the SBGD001 takes into account the original retail price, a survey of the second-hand market, and the figure the specialists of Phillips would personally be willing to pay for said models. This formula has resulted in an estimate of $32,000 to $53,400. Grand Seiko SBGD001 Ben noted in his initial write up of the SBGD001 that it sold through boutiques for "$55,000-ish" and that it's created directly alongside the aforementioned Credor Eichi range. There are only eight examples of this watch (featuring an eight-day power reserve) to have ever been produced. So unlike some models from Swiss competition that fetch high prices at auction even though production is thought to be quite high, the actual production number is a known quantity. This makes it a particularly interesting watch to keep an eye on when it crosses the block. Surely there will be folks who bemoan the inclusion of Grand Seiko in the Swiss auction circuit and they'll claim the value proposition is lost now that it's become more visible. But consider this: The estimate is lower than the original retail price of the watch. Grand Seiko SBGD001 Daniel Yong , a Grand Seiko collector who goes by Mr. Zaratsu, says that "demand for pieces such as the rare VFA and the platinum Spring Drive offered here have always been hot amongst the once ‘underground’ Grand Seiko cult," adding that "Grand Seiko has rapidly soared in popularity amongst the mainstream watch community. They offer something uniquely Japanese that the European market just can’t replicate, and that is aesthetics and engineering inspired by Japanese concepts." And it isn't only Phillips where Grand Seiko lots have recently appeared. Sotheby's in Hong Kong just sold three in their Important Watches auction last week: A HODINKEE Limited Edition SBGM239 , an SBGW033 , and another VFA 6185-8021 . All watches sold for above their estimate, the SBGW033 even went for double the high end of its 30,000 HKD estimate. A SBGW033 and a VFA 6185-8021 sold by Sotheby's. Additionally, Christie's Rare Watches sale features two vintage Grand Seiko models, a ref. 6186-8000-G and ref. 4580-7000 . Gerald Donovan, the scholar and dealer of Grand Seiko behind The Grand Seiko Guy , noted that another VFA reference that's comparable to the two coming up for auction is being sold at the Grand Seiko Boutique Flagship Wako for roughly $30,000, pointing out that  "what is significant is that this season we see three of the houses featuring examples of what are widely considered to represent the pinnacle of vintage Grand Seiko references (and indeed, arguably the pinnacle of all Grand Seiko references), the VFA's." Auction houses follow trends in the collecting world – they don't necessarily make them. Grand Seiko has invested heavily in communications over the past few years, so it’s unsurprising that the brand is finally enjoying greater visibility. Grand Seiko Boutique Flagship Wako. "Whether any of these watches reaches the $30,000(USD) price that the Wako store in Ginza is currently asking for a 6186-8000 VFA (the same reference that is at Phillips) remains to be seen, but clearly in recent years Grand Seiko has made great strides in communicating the historical values and significance of the vintage watches to a rapidly growing collector base," said Donovan. And one more point: "the historical and cultural significance of Phillips and Christie's having deemed VFAs worthy of participation in their preeminent Geneva auctions shouldn't be overlooked," said Donovan "The VFAs were born out of Seiko's participation in the Neuchâtel and Geneva chronometry trials of the late 1960's – it is very fitting that, half a century later, we see them making a return to Switzerland." Phillip's The Geneva Watch Auction: XIII takes places on May 8-9. Christie's Rare Watches takes place on May 10.If we needed any further proof that GS has hit the big time, well, here it is.