Business World Weekender
Aug 20-21, 2004
By Raoul J. Chee Kee, Senior Reporter

When one invests in a well-maintained, pre-owned watch, one could end up buying a piece of history, perhaps even a Patek Philippe owned by Winston Churchill or a bejeweled watch previously owned or given as a gift by the sultan of Brunei.

So said J. Michael Dizon, co-owner of Secondo Pre-owned Time & Pieces when asked what the thrill was in purchasing a pre-owned watch.

The shop at Goldcrest Village Square at the Ayala Center has been open for two years now and caters to a clientele that he described as “people like me and my partner Junjun Lopez who have a passion for well-made watches and appreciate their complications [or movements].”

“Before we opened the shop, the only pre-owned brand most people even considered buying was Rolex. While I’m not discounting the fact that Rolexes are good investments, we were open to other luxury watch brands.”

Aside from Rolexes, Secondo has watches from Cartier, Patek Philippe, Vacheron Constantin, Breitling, Audemars Piguet, Jaeger-leCoultre, IWC, Omega, Harry Winston, and Officine Panerai, among others.

Interestingly enough, the store also sells Rustan’s and SM gift (at a discount) certificates as well as framed paintings by local artists like Araceli Dans, Cesar Legaspi, and Juan M. Arellano.

It turns out that aside from Secondo, Mr. Dizon also owns and runs three pawnshops, Agencia de Empeños de Makati, Inc. Ten percent of the watches for sale at Secondo were unredeemed by their previous owners.

“We wanted Secondo to serve more as an exchange where one can find good deals. For example, if an owner wants to sell his watch as soon as possible, then he has to price it lower that its actual value. That’s why we recommend the interested buyers come into the store at least once a week just to get an idea what’s available.”

Those who are wary about buying a pre-owned watch because the parts might no longer be original will be pleased to know that Mr. Dizon is determined to professionalize the business.

“Whenever we are approached by someone who wants to sell a watch at the store, we tell the person that he has to have it checked and repaired, if needed, at the official service center. Just to make sure, we see to it that he is accompanied by one of our staff. Since several of the official service centers are located within walking distance of the store, it doesn’t pose too big a problem.”

The Cartier service center is located at the top floor of Rustan’s Makati while the Rolex service center is just in front of the old Greenbelt.

Mr. Dizon said that while a third party (like the service centers) may guarantee the authenticity and, sometimes, previous ownership of a particular watch, it is still the responsibility of prospective buyers to research on any piece they are interested in buying.

He suggested that neophytes interested in collecting or just buying a vintage watch might want to focus on three brands namely Rolex, Patek Philippe and Breguet although he quickly added, “It really depends on what you’re interested in or what catches your fancy.”

At Secondo, watches can range from a low of P10,000 for a Rolex, an Omega or a Cartier to as high as P3-M for an 18-K Patek Philippe Perpetual Calendar.

For Inquiries, call 894-0282.

France24 International News
Agence France-Presse
February 19, 2009

Limousines roll up to the plate glass storefront in the Philippines financial district, unloading heirloom jewelry, paintings and recently even a chamber for divers with the Bends.

Turnover was up 50 percent in January and business has never been better for J. Michael Dizon, lender of last resort to the well-heeled. “I’ve had some weird things brought to me,” said the amiable 41-year-old manager, sitting on the low sofa of a spare, air-conditioned reception room that looks more like an art gallery than a pawnshop.

Pin lights highlight a German cuckoo clock and a wall of unredeemed 1970s Filipino paintings.

“Yesterday a doctor brought me a hyperbaric oxygen chamber. I had to turn him away because he would lose his ability to earn money,” said Dizon, referring to the therapy for divers stricken with the decompression illness.

Earlier, he said, he had lent money to a businessman who put up as collateral fog-making equipment for stage sets.

In Europe, pawnshops have financed wars and voyages of discovery, but in the Philippines they are mostly associated with the poor, with lenders usually dealing with their customers through barred shop windows in down-and-out neighbourhoods.

The central bank says there are more than 14,000 pawnshops across the Philippines islands, with the industry, which began in the mid-19th century, dominated by the Tambunting and Lhuillier families.

The industry lends about 10 billion pesos (212.8 million dollars) a year, principally accepting jewelry — but in recent years also television sets, mobile phones, digital cameras and motorcycles.

Pawnshops lend at credit-card rates for small loans of up to three months.

Borrowed money “is used for consumption needs such as for payment of tuition fees, medical emergencies and to defray costs of celebrations like town festivals, birthdays and others,” said Fernando Caballa, head of a central bank division that monitors the industry.

Cheer Mae Ecarma, publicist for the Lhuillier group, said pawnshops are now just one segment of the group’s business which now also includes delivering money remitted by millions of Filipinos working abroad.

Caballa said it was “premature to say if the global financial crisis has affected the lending operations of pawnshops,” which he said account for less than 0.25 percent of the Philippine economy.

Dizon by contrast said his Agencia de Empenos de Makati should become more prominent as the global credit crunch deepens.

“The reason our business is flourishing is because the banks are not lending,” he said, adding that banks would as a rule honour only land as collateral, and would not lend for less than the property’s appraised value.

His high-end clientele includes businessmen and women who hock assets to meet monthly payrolls for their staff as economic activity slowed. “It’s not because they are bankrupt. The main reason is cash flow and liquidity,” he said.

Many prefer to stay inside their cars and the uniformed staff serve them brewed coffee, pastries or whatever else takes their fancy.

Dizon recalls turning away a client who was trying to pawn a painting by 19th century master Juan Luna, the country’s most famous artist.

He said it would be difficult to dispose of such a costly investment, and the customer was politely referred to the Singapore office of Christie’s auction house.

Dizon said he has a remarkably low default rate of three percent, compared to the industry average of 49.3 percent, though he expects this to rise this year. Any unredeemed items are auctioned off.

“I told my staff that this year will be difficult for everyone,” he said.

Filipino pawnshops by law can accept anything of value that fits in their vaults, except guns.

Dizon said he also rejects Hermes or Louis Vuitton handbags because “the (local) market is very thin”.

The Straits Times
February 23, 2009
By Alastair McIndoe, Philippines Correspondent

MANILA, PHILIPPINES: The Agencia de Empenos de Makati in Manila’s financial district is not a typical iron-grilled pawnshop reeking of financial desperation.

Inside, it looks like a private art gallery. Paintings by famous Filipino artists hang from the walls. There is a small glass-panelled cabinet of expensive Swiss watches in their cases. Customers wait on sofas while their goods are being valued.

Owner Michael Dizon, 40, says business has risen sharply over the past three months – a trend that so far reflects the extremely tight lending policies of jittery local banks, rather than the direct fallout of the global economic meltdown.

‘We saw the same thing during the Asian financial crisis over a decade ago,’ said Mr Dizon. ‘Our clients are not broke, but they need to borrow money quickly, sometimes for their businesses, because the banks just aren’t lending right now.’

High-street pawnbrokers are also seeing brisker business. ‘We’ve been gaining more customers since January,’ said Ms Lisa Manding, human resources director at Tambunting, one of the largest pawnbroking chains. She attributes this to the early stirrings of tougher economic times ahead.

The Philippine Central Bank worries about workers laid off by the crisis turning to pawnbrokers to raise cash. The bank believes it will be bad business for both sides. ‘With no income, they won’t be able to redeem their items, and pawnbrokers prosper only if their loan accounts are turning over,’ said Mr Fernando Caballa, who heads the central bank department regulating the pawnbroking industry.

There are some 14,000 licensed pawnshops in the Philippines, 60 per cent in the capital region and neighbouring provinces. For the poor and low-wage earners, they are one of the few available lines of credit. Mobile phones, jewellery and appliances are the usual collateral for short-term loans of around 2,000 pesos (S$63).

The better-off generally borrow between 20,000 and 200,000 pesos in Mr Dizon’s shop. Watches and jewellery are his most-pawned items.

Monthly interest rates are between 3.5 and 5.5 per cent. With that averaging 54 per cent a year, borrowing money from a pawnshop is expensive.

The industry’s loan portfolio totalled 10 billion pesos at end-2007, according to the latest central bank data. The Chamber of Pawnbrokers of the Philippines claims a redemption rate of 75 per cent for its members. Unredeemed goods may be sold 90 days after the expiry of the contract date, which is for a minimum 30-day term.

Going to a pawnshop is rarely a cause for embarrassment here. For one thing, too many people use them. And the look of the big high-street chains, such as Tambunting and M. Lhuillier, is far removed from pawnbroking’s desperate image.

Still, staff at M. Lhuillier bristle at being called pawnbrokers. ‘We’re a financial services company,’ said a senior company official. – Straits Times

The Philippine Star Business As Usual
February 2, 2004
By Carla Paras-Sison

During his high school days, Eduardo Tantoco Lopez III rented out comic books to classmates. Today, Lopez sells pre-owned quality brands of Swiss watches like Rolex and Vacheron Constantin, first-rate diamond jewelry, and art pieces.

“The knack for business runs in the blood,” said Lopez, president of Secondo Pre-owned Time & Pieces, which is based in Glorietta 2 of the Ayala Commercial Center. “I was influenced by the success of second-hand golf shops. I think everybody loves a good deal, value for money,” said Lopez.

“He is good buyer like his grandmother, the late Gliceria Rustia Tantoco, who was famous to having an eye for good products and brands. High-class products with good value has been at the heart of the Tantocos’ success in the retail business,” said partner and vice-president for finance and administration Elizabeth Enriquez Dizon.

Starting out with a capital of P5 million, the partners opened Secondo in April 2003 as a facilitator of item exchanges between buyers and sellers, charging a commission on consigned goods.

Growing Market

The market for pre-owned original pieces has expanded, in part because of increased consumer pragmatism in an economic downturn and in part because some rare pieces and limited edition collectibles appreciate in value.

“We love making people happy. Our sellers are winners because they get the price for their goods. They give their own asking price and the market later dictates the fair value. Our buyers are winners too because we effectively cut the margin of the middlemen. Some of our indirect competitors have extremely high margins,” Lopez said.

Since most buyers prefer the authority of the watch’s official service center, Secondo has done away with dedicated technicians. This reliance on the official service center increases overhead expenses but is considered a value-adding service.

“We go to lengths to make our customers feel they are getting a good deal. And many of them have already done the rounds of the watch shops so you can’t fool them,” said Lopez.

In an effort to increase its stock on hand, Secondo has begun to offer a special consignment-loan package for sellers. It offers a maximum load value for the item and charges the amount when it gets sold. This allows the sellers to use the cash from the loan even before the item is sold.

The Manila Times
November 20, 2003
By Terrie B. Fucanan

DON’T be easily put off by the word “second hand.” When it comes to watches, jewelry, and art pieces, one shop will definitely lure you to its counters for giving a new meaning to pre-owned valuable items. That is, “second hand but of good quality.” Not to mention very affordable.

Secondo Pre-owned Time, & Pieces, located at the Goldcrest Building in Glorietta 2, Makati, has an ample display of branded Swiss watches, jewelry and artworks sold in very good condition at lower prices.

Having opened just last summer by partners Junjun Lopez and couple Beth and Mike Dizon, the store intended to offer items that are not easily found in other pre-owned shops. In the case of watches, Secondo has about 20 brands of hard-to-find models, some of them coming from other countries and not released here in the Philippines. While other pre-owned stores have more Rolex watches on display, Secondo begs to differ “by also sourcing other brands of quality watches,” said Mike Dizon.

Brands include Rolex, Cartier, Patek Philippe, Vacheron Constantin, Breitling, Audemars Piguet, Omega, Franck Muller, Hublot, Breguet, Bulgari, and A Lange among others. Most of the items found now at Secondo are watches, but there are also a good number of pre-owned diamond jewelry and artworks.

Secondo sources its merchandise through a large database of people who love to collect such items. When it’s time to augment the display, the shop owners set appointments with those in the database and offer them to sell their watches, jewelry, or art pieces on consignment basis. Secondo also offers a combination of consignment and loan agreement, wherein it can offer a maximum loan value price to the supplier and just charge the amount when the piece gets sold.

How can you be sure that the pieces are of good quality? For the watches, Secondo brings them to their respective service centers for examination and price assessment. The actual retail price is determined, and it is from here that the watch owner dictates an asking price. For instance, if an original, slightly used Vacheron Constantin watch was originally brought for P1 million and the service center confirms it, Secondo could sell the watch for as low as P400,000 based on the owner’s asking price. And since the watches as earlier said are barely used (some were not used even), the purchase actually gives good value for your money.

“Previous ownership of the watch is also considered in our assessment, not only authenticity,” Mike said.

Proof of the good quality of watches found in the store is Secondo’s ability to join its items in international auctions. A Rolex timepiece with diamonds and mother of pearl worth P3 million is now on its way to the Christie’s auction in New York. Another Rolex watch, a limited edition Breguet, and a Patek Philippe will be auctioned in Sotheby’s London this month.

As for assessing jewelry, Mike runs a chain of pawn-shops that has taught him which items should be highly appraised. “We don’t use pawnshop prices here, however, when we appraise jewelry for Secondo, since most of the items really com-mand a high value. Some diamond jewelry were even imported and customized,” he said.

For the paintings and other art pieces found in the store, the owners of Secondo sells them for trusted family friends and relatives using the same consignment agreement that they use in selling watches and jewelry. There were Joya paintings sold at P120,000 each, and now waiting to be bought is a J.M. Arellano oil painting that dates back to 1934. There are also gift certificates by Marks and Spencer and SM sold at dis-counted prices.

Another difference of Secondo from other pre-owned stores is the openness of its owners to changes and trends. For this holiday season, Mike said they are trying to beef up the inventory and look for more non-Rolex watches that they could put on sale. This is to lure more buyers to the store, but as Mike said, he and his business partners aren’t afraid of competition.

“I’m never afraid of competitors,” he said. “I actually discourage people from impulsive buying and tell them to consider other stores too. The good feeling comes though, when they return and still opt for our watches. This makes us love the competition, because it makes us source our watches better.”

Entrepreneur Magazine

Just when everybody seems to be weighed down by grim economic news, Secondo, a pre-owned watch and jewelry specialist, is having one of its best times. In December 2008, while other shops were offering price cuts, steep discounts, and tempting freebies just to move their sluggish inventory, Secondo was experiencing near sellouts for its timepieces. Indeed, it could hardly meet the demand for its high-end Swiss watches like Rolex and Omega, which sell at a fraction of their cost when brand-new.

J. Michael Dizon, the owner of Secondo and a certified watch lover, could not be happier because he had actually braced himself for a difficult year in 2008, having seen signs of an imminent financial crisis in late 2007. “I really thought that sales would slow down in 2008,” he recalls. “I actually told my people to prepare themselves for the worst, but our sales last Christmas turnout out to be one of our best.”

Secondo’s remarkable sales performance clearly proves that Dizon and Eduardo Tantoco Lopez III, his partner and fellow Atenean, were not wrong in believing that they could cash in on the niche market for pre-owned, high-end watches in a country where resistance to buying used goods remains significant. It greatly helps, of course, that Dizon is passionate about watches and clocks and a voracious reader of anything associated with them. He also has well-honed skills in appraising expensive watches from his many years of running Agencia de Empeños de Makati Inc., a pawnshop that draws in such expensive items as diamond rings, designer bags and signature Swiss watches.

Dizon, an active member of the US National Association of Watch and Clock Collectors, explains: “By now people have realized that the most valuable watches and jewelry are pre-owned. They are valuable because they are collector pieces, and some of the most valuable were not made in quantity but produced in limited edition for special people.”

To get Secondo started, the partners had raised P3 million in initial capital for the purchase of inventory and the development of a simple and clean outlet for displaying some 50 watches that cost an average of P100,000 each. When they set up shop in March 2003, there were already a number of shops specializing in top-tier pre-owned watch brands, but Dizon believed that there was still more than just enough room for Secondo.

The buying and selling of pre-owned high-end watches is not an easy business, though, for it requires the painstaking process of making sure that the watch is from a legitimate seller and not stolen. Thus, when, say, a Rolex watch is offered for sale, Secondo needs to bring it to the Rolex authorized service center in the Philippines for verification. The Rolex service center has access to the extensive Rolex database listing all of the watches it has ever sold and to whom.

For brands of watches without a representative office or service center in the Philippines, Secondo has to have them verified in places as far as Hong Kong and Singapore. Dizon explains: “We want to be differentiated in the market by being truly reliable, credible and professional. Also, people like the fact that our prices don’t swing wildly, and we do take pains to make sure that the watches we sell are legitimate,”

Secondo’s brand of customer service also means extensively training its staff of seven on what makes watches valuable, the specific features of different brands, and even the correct pronunciation of such tongue-twisting brands as Vacheron Constantin, Breguet, Audemars Piguet, Chopard, Tag Heuer, and Piaget.

Dizon says there are still opportunities in the pre-owned watch market for other entrepreneurs, but he cautions that the learning curve is steep and that it takes a lot of patience, diligence, and long-term thinking to get the trust of discriminating buyers.

“It’s quite difficult to get into this business because it requires a lot of expertise and education,” he says. “And the passion, of course has to be there. You really have to love watches to do well in this business.”