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The Second-Hand Uprising

As an idea, Watchfinder & Co originated in the mid-90s, when Amsdon was working on an automotive sales portal which became Motors.co.uk, and which was subsequently sold to the Daily Mail Group. Amsdon says he “saw some parallels between motors and watches”, and began buying and selling pre-owned timepieces in 2000. The company was incorporated in 2002, and grew slowly, organically from there. Amsdon is brand director and co-owner and his business partner Stuart Hennell, also a co-owner, is managing director.

Amsdon pulls no punches: “We think we changed the market.” Now that he employs 80 people and turns over £3m worth of watches every month, that is an easy thing to say. But it is true to say that the company boasts some unique qualities in this space. It is the only second-hand consumer-facing dealer to offer warranties (Amsdon says “we stand behind the watch”), and it has the luxury of its own service centre down in Maidstone employing 30 people and counting amongst its staff a former Rolex watchmaker and skilled craftspeople from other major brands, too.

“We think we changed the market.”

A key to the company’s success is its marketing collateral and outward appearance, which, says Amsdon, “look like a proper brand.” Part and parcel of this was the introduction of the retail stores in February last year. The Royal Exchange unit was the first proper premises, but Amsdon and his business partner have secured the lease on a unit in Bluewater shopping centre, and they have also been looking tentatively at Mayfair as a possible future locale, too.

In the story so far, it sounds rather like there is plenty enough momentum to be getting on without additional investment or indeed the burden the inevitably comes with ceding equity to private equity men whose aim is rapid growth and handsome return. Amsdon says the process of securing investment has taken around two years, but they have had the luxury of being choosy about who to sell to. “We’ve had VCs contacting us this year because of the coverage, and this round of investment gives us a valuation of around £24m.”

Plans for how to spend the investment capital do not principally include expensive store openings or fancy from-scratch service centres. Instead, and somewhat surprisingly, it is about stock. “They want us to increase inventory broader and deeper. In the pre-owned market, [customers] won’t buy to order – they want to know you’ve got it in stock, so it means our stock turn is about five weeks.” It has meant that so far, in operational terms, if Watchfinder buys stock, not only will it almost definitely sell but it sells very quickly – too quickly for this limited (in the legal sense) company to grow its stock using organic cash flow. Main

The two investors to have come on board for the first round are Piton Capital (which is in the marketplaces space, with investments in Betfair and QXL), and also Beringea, which has a large portfolio of investments in everything from the Detroit Institute of Music Education to Freeosk, a developer of interactive kiosks that dispense samples to customers in retail spaces. It has a small association in jewellery already with an investment in jewellery brand Monica Vinader.

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