Interview: Mike Tay
With auction season behind us, stories of lots, performances and what it all means ruminates in the minds of collectors. One such collector, Mike Tay, has been present in the industry since the late 90s, making his mark as the Managing Director of his family's watch-retail business, The Hour Glass, in Singapore. We decided to catch up with Mike to talk about his history in the watch-world as well as to shed some light on the results of the Geneva auctions.
So Mike, tell us a little bit about how you became interested in watches and the watch industry?
For me, watches were always in the blood. My grandfather started his first watch-retail business in 1942, which was a small kiosk in what was, back then, a lively area in Singapore. However, shortly after establishing it, the Japanese invaded, which forced the business into hibernation during their occupation. It would lay dormant until after the second world war, when in 1946 he re-established it with a proper physical retail store, rather than the kiosk he had previously.
And what sort of brands did he stock the second time around?
He had merchandised a very many Swiss brands which were extremely popular during the time, like Titoni and Enicar; brands which carry far less gravitas in today’s industry but certainly had clout back then. Though the the business dramatically transformed in 1948, after a visit from Hans Wilsdorf of Rolex, who was travelling around south-east Asia and happened to drop by the store. He saw that we were carrying a decent range of Swiss brands from the time and asked, “do you want to work with Rolex?” - naturally you don’t think twice, and the business became the first distributor retailer of Rolex in Singapore.
That’s quite a couple of years the business experienced! At what point did the Hourglass come to be?
Well the story of the Hourglass really begins in 1979. My parents had met at Monash University in Melbourne, my father studying to become a Doctor and my mother a Pharmacologist, and after graduation, they decided to relocate to Singapore where they would spot a potential opportunity in the luxury watch world. My father opted to withdraw his shares in the family business, to then strike out on their own with a new approach.
What was is that you think made them think they could do things differently?
Well they had experienced a different approach to this type of retail while in Melbourne. Growing up in that environment among specialist jewellers and watch retailers, they experienced first hand that retail could be approached in a much more defined manner. Specialised boutiques and plush environments focussing on a single product category. Back then in Singapore, watch retailers would sell optical and camera equipment; watches were seen as part and parcel of general merchandise. This realisation lead them to establishing the Asia’s first specialist luxury store.
I guess it seems so obvious with hindsight, but maybe wasn’t quite so back then. How were the early years of trading?
Exactly, and I think they were quite fortunate because of the deeply seated relationships that our family had with Rolex, so when the store opened, Rolex supported them as a dealer and likewise with Patek Philippe and many other brands. We had more than thirty years of experience of dealing with these brand-partners through my grandfather’s business, which was called Lee Chay, which I wish I could recall the meaning of. I do know that it’s Chinese, however, I don’t speak Mandarin [laughs]
Did you always have ambitions of joining the family business?
No, certainly not. I went to boarding school in the United Kingdom, during which time, the performing arts became a big part of my life. Following my final A-Level year, I had actually selected two performing arts colleges that I was interested in attending – Bretton Hall in Leeds and the Laban Dance Centre. I had intended studying a four year course in contemporary dance, though, after receiving considerably better A-Levels than I think anyone expected, my father suggested that I should attend business school. I decided to study in the U.K. as most of my friends were here, though with hindsight, I should have headed to the United States. I graduated in 1998, and the Asian financial crisis was in full effect. The Hourglass was in pretty bad shape, much like many other Asian businesses because of the massive devaluation of the currency in the region. So it was upon that backdrop that I joined the business in 1999. Joining the family business was never really a case of ‘if’ but ‘when’; it was very much like being conscripted to national service.
So in a sense, you were brought in to revive the brand?
Yes, it was very much to turn it around. I had turned down a job offer in investment banking with Merrill Lynch and persuaded that the family business required a fresh eyes and a more youthful approach to turn things around. I also thought it would be interesting to pick up a different skill-set, all the while solving the company’s financial difficulties.
How bad of a spot were you guys in?
Well, put it this way, from one year to the next, our revenue had nearly halved from $415m to $230m in sales. This had a lot to do with the fact that we had a very concentrated clientele in Asia, nearly all of whom felt the effects of the crisis along side us. The challenge was frikkin’ massive to say the least, leading to a considerable amount of reorganising and restructuring.
What is it that you think went wrong, then vs. where you managed to get it to today?
Well, I think we had an incredible run, the business had been growing by double digits year on year from 1979 through to 1997. It was a near two decades of upward trajectory and when anything like that happens to an organisation, you can fail to manage your growth properly, losing touch with the ground and clients alike. We overextended ourselves, concentrating our business to just a few large clients.
I suppose it’s difficult to anticipate these kinds of things when business is booming…
Absolutely, I don’t think anyone anticipated it. The second issue we faced, was that in 1994 and 1996 the Hourglass acquired both Daniel Roth SA and Gerald Genta SA respectively. Two specialty watch manufacturers for whom we began as investors with. We would unfortunately face financial difficulty with both of these brands during the crisis too, so it really was the perfect storm for us.
Was this the first time that the business had become involved with independent brands?
Well the Hourglass had always been involved with independents, for instance, in 1992 / 93 we financed Philippe Dufour’s first four Grande Sonnerie watches, so I think whether consciously or not, we had always been interested and involved with independent artisans.
And how about your personal interest in the independent brands, I know you’re a collector of many pieces by independent watchmakers…
Yes, in 1999 I spent my first year in the industry working out of Geneva and the Vallée de Joux, I was extremely taken by all of these designers, watchmakers and constructors. Living in remote parts of the world with the most beautiful stories.
On a more topical note, what was your take on the Geneva auctions this season?
Well, I would say that Phillips did incredibly well. They have a highly disciplined team which Aurel Bacs boldly leads. Both Aurel, Livia and the team work extremely hard to make sure that every watch in the sale is sold. They also have the advantage of presenting incredible material too, their consignments are truly special. So that said, every success they have, is earned. I think Christies performed positively as expected, though, Sotheby’s suffered a lot. The fact that they failed to garner a single bid on one of the most spoken about lots of the season, is quite something.
What do you think went wrong?
Well, look, with an object like this, you have to have lined up at least two highly committed bidders. You need to have worked them and prepared them for the sale months in advance. The second issue is that you can’t start the bidding on a watch like this at CHF 5.9m, you start at three million, possibly or four. When the auctioneer opened the bidding at 5.9 I think it shocked the couple of serious room bidders, along with the other eight or so phone bidders. Nobody acted. Nobody moved. Sotheby’s were hoping to come away with possibly around ten, or eleven-ish million in sales, however, they put all their eggs in one basket and, needless to say, it was not a good result.
What do you think this means for the rest of the Calibre 89 owners?
Well I think it’s going to be a challenge. It was a travesty that this lot failed to garner a single bid because it is undoubtedly the most important watch of its time, post quartz-crisis. Patek Philippe started working on this watch in 1980, at a time where the industry was only just beginning to claw back some ground and confidence after the crisis. This incredible piece was a shining beacon of light, demonstrating that the Swiss watch industry was built on creating beautiful time-keepers. It was to show that there is still a strong interest, and a market for these types of objects. The watch has a magical aura about it. I’ve been fortunate enough to hold it in my hands on two occasions, once in the mid 2000s and again ahead of the sale, and my thoughts were that I was holding one of the most important horological treasures in world. I certainly didn’t think that this piece would go unsold.
Were there any other lots that exceeded your expectations, both negatively and positively?
There was certainly one piece which has been spoken about, which is the Rolex 6263 ‘Paul Newman’ Daytona Lemon dial. This is something I’ve made my views clear about on Instagram, but it out performed everyone’s expectations dramatically. This is the perfect scenario for an auction house, having two highly committed, highly combative bidders where one party must win at all costs.
This talk of the piece not being truly worth anywhere near what it hammered for, I’ve heard a few stories on the grapevine about one bidder insulting the other ahead of the sale about this specific lot, leading to a battle of ego. Can you comment on this?
I wouldn’t want to go into specifics on the matter, but this was certainly a factor.
Finally, what’s next for the Hourglass?
What’s next [laughs]. That’s a great question. We clearly believe in the blurring of online and offline and I think that when we look at an A-typical watch buyer, they’re very digitally connected, so they could well be sitting in-store looking at the watch physically, all the while on their mobile device sharing with friends and reading reviews and being assisted by a specialist in-store. Shopping behaviour has changed dramatically and we have to recognise that, so I don’t believe in a digital world and a traditional world. It’s not binary; it’s not just a 1 or a 0, it’s just 1.