Has the Rolex bubble finally burst? Perhaps it has
Discussion
AstonZagato said:
Mont Blanc said:
...
Over the last 5-6 years, Rolex have been unable or unwilling to make enough watches to come close to satisfying demand. This has allowed their dealers to play silly buggers and take the piss out of customers.
...
EFAOver the last 5-6 years, Rolex have been unable or unwilling to make enough watches to come close to satisfying demand. This has allowed their dealers to play silly buggers and take the piss out of customers.
...
Rolex have made statements that indicate they were never happy about the supply and demand situation that arose. They then spent a fortune on opening no less than 3 temporary factories in Romont and Villaz-Saint-Pierre, and hired an extra 300 employees, to increase supply as quickly as they could.
Then in 2022 they started the build of a new factory costing over $1 billion, in Bulle, which will increase their output by 20%. They have never deliberately restricted supply or manufacture.
AstonZagato said:
Mont Blanc said:
...
Over the last 5-6 years, Rolex have been unable or unwilling to make enough watches to come close to satisfying demand. This has allowed their dealers to play silly buggers and take the piss out of customers.
...
EFAOver the last 5-6 years, Rolex have been unable or unwilling to make enough watches to come close to satisfying demand. This has allowed their dealers to play silly buggers and take the piss out of customers.
...
dickymint said:
AstonZagato said:
Mont Blanc said:
...
Over the last 5-6 years, Rolex have been unable or unwilling to make enough watches to come close to satisfying demand. This has allowed their dealers to play silly buggers and take the piss out of customers.
...
EFAOver the last 5-6 years, Rolex have been unable or unwilling to make enough watches to come close to satisfying demand. This has allowed their dealers to play silly buggers and take the piss out of customers.
...
Because as per my post above, the actions and statements by Rolex suggest otherwise. As does their 100 year history where continually increased production year on year, and sold every watch they made to dealers, and it was the dealers problem as to how to sell those watches.
Mont Blanc said:
Not true.
Rolex have made statements that indicate they were never happy about the supply and demand situation that arose. They then spent a fortune on opening no less than 3 temporary factories in Romont and Villaz-Saint-Pierre, and hired an extra 300 employees, to increase supply as quickly as they could.
Then in 2022 they started the build of a new factory costing over $1 billion, in Bulle, which will increase their output by 20%. They have never deliberately restricted supply or manufacture.
They have indeed increased manufacture. But they could, say, produce far fewer precious metal watches and more SS ones. It could be argued that they wanted to use excess supply to force up demand on PM watches and use the high grey prices on SS to distract from price increases that would drive yet more profit, then increase capacity to mop up demand at higher prices.Rolex have made statements that indicate they were never happy about the supply and demand situation that arose. They then spent a fortune on opening no less than 3 temporary factories in Romont and Villaz-Saint-Pierre, and hired an extra 300 employees, to increase supply as quickly as they could.
Then in 2022 they started the build of a new factory costing over $1 billion, in Bulle, which will increase their output by 20%. They have never deliberately restricted supply or manufacture.
It's entertaining to read the differing views on supply. Personally, I don't believe Rolex is artificially limiting supply... demand far out stripped supply during the years leading up to and during covid. Covid times were just like the wild west!
It's ironic that you don't hear the complaints of other brands that have much higher flip value (percentage markup) such as AP and PP to name 2, limiting production. Take the Girard Perregaux Laureato, blue dial, during the Pandemic it peaked at nearly 100% over list. Now you can buy a brand new un-worn from a secondary dealer with 40% off list.
Bottom line its demand that is the driver on prices and not supply manipulation.
Take Omega, other than the Snoopy, I don't know of any model that I can't walk in and buy or order with an accurate lead time. Why...? The demand is just not there.
Back to the original thread title, the booming times of the Rolex Bubble sure are done for now, with AD's having to call many people before incoming stock gets sold. Without a resale profit people are no longer getting into short term debt (tied into the watch until they sell it) and those who were end users are now making sure they really can afford it as getting a Rolex at MSRP is no longer the gift horse is used to be.
I've never bought a watch for investment or to flip. If I like it and its something I can afford, then I'll buy it. I think out of all the premium watches I have owned, I've only ever sold 4... 1 was a mistake I still regret and the other 3 because of lack of wear due to size issues (change in tastes). Looking back I really regret not liquidating my watch collection during the Pandemic. If I did, I could of re-purchased all of them back today and get a 992.2 thrown in for good measure. Am I bitter... no, because I have a collection of watches that I built up over 20years and they are purchased because I like them and for no other reason.
Anyone who still thinks of Rolex as an investment really needs their head pulled out of the sand or just stop lying to people on Social Media channels to benefit their business.....
It's ironic that you don't hear the complaints of other brands that have much higher flip value (percentage markup) such as AP and PP to name 2, limiting production. Take the Girard Perregaux Laureato, blue dial, during the Pandemic it peaked at nearly 100% over list. Now you can buy a brand new un-worn from a secondary dealer with 40% off list.
Bottom line its demand that is the driver on prices and not supply manipulation.
Take Omega, other than the Snoopy, I don't know of any model that I can't walk in and buy or order with an accurate lead time. Why...? The demand is just not there.
Back to the original thread title, the booming times of the Rolex Bubble sure are done for now, with AD's having to call many people before incoming stock gets sold. Without a resale profit people are no longer getting into short term debt (tied into the watch until they sell it) and those who were end users are now making sure they really can afford it as getting a Rolex at MSRP is no longer the gift horse is used to be.
I've never bought a watch for investment or to flip. If I like it and its something I can afford, then I'll buy it. I think out of all the premium watches I have owned, I've only ever sold 4... 1 was a mistake I still regret and the other 3 because of lack of wear due to size issues (change in tastes). Looking back I really regret not liquidating my watch collection during the Pandemic. If I did, I could of re-purchased all of them back today and get a 992.2 thrown in for good measure. Am I bitter... no, because I have a collection of watches that I built up over 20years and they are purchased because I like them and for no other reason.
Anyone who still thinks of Rolex as an investment really needs their head pulled out of the sand or just stop lying to people on Social Media channels to benefit their business.....
Edited by Ninjin on Thursday 30th January 18:35
AstonZagato said:
Mont Blanc said:
Not true.
Rolex have made statements that indicate they were never happy about the supply and demand situation that arose. They then spent a fortune on opening no less than 3 temporary factories in Romont and Villaz-Saint-Pierre, and hired an extra 300 employees, to increase supply as quickly as they could.
Then in 2022 they started the build of a new factory costing over $1 billion, in Bulle, which will increase their output by 20%. They have never deliberately restricted supply or manufacture.
They have indeed increased manufacture. But they could, say, produce far fewer precious metal watches and more SS ones. It could be argued that they wanted to use excess supply to force up demand on PM watches and use the high grey prices on SS to distract from price increases that would drive yet more profit, then increase capacity to mop up demand at higher prices.Rolex have made statements that indicate they were never happy about the supply and demand situation that arose. They then spent a fortune on opening no less than 3 temporary factories in Romont and Villaz-Saint-Pierre, and hired an extra 300 employees, to increase supply as quickly as they could.
Then in 2022 they started the build of a new factory costing over $1 billion, in Bulle, which will increase their output by 20%. They have never deliberately restricted supply or manufacture.
When I say that Rolex aren't restricting manufacture/supply, I mean that they had nothing to do with this topic of silly inflated used watch prices from 2017 onwards. The made as many watches as they could. Demand simply went through the roof for various fiscal reasons such as a lot of cheap money sloshing around in various economies globally. Then covid happened and consumers just went insane, and the rest can all be read about in this very thread
But, if we talking about the smaller details of the general Rolex strategy, such as how many steel vs precious metal watches they produce, then yes, I agree they have always created a fine balance between both types of watch. But we have to remember, that this balance hasn't really affected Rolex buyers over the last 100 years. If you wanted a stainless Sub/GMT or Daytona over the last 60+ years you could either have one the same day from the AD, or you had a short wait until one came into their branch, but you were definitely getting one. The AD's weren't playing silly buggers with you.
We have to keep in mind, as many remind us in this thread, that this nonsense only happened over the last 7 years or so, and for the previous 110 years the man/woman on the street could buy pretty much any Rolex her or she wanted without a purchase history or without a long wait for the watch they requested.
Rolex will be very happy when their brand is returned to that equilibrium, as it worked very well for them for over a century, and the Swiss don't like change...
don logan said:
I hadn't, I'll have a view later thanks10 years on and I'm still enjoying mine.
The Gauge said:
I lost a rather valuable gold Breguet in a boat accident on the Solent... Breguet have it in their 'missing' register so in theory it should come back to me and then, in turn, the insurance company. Although I expect they'd allow me to keep it if it was covered in barnacles. One day maybe.
Mont Blanc said:
Do you have any evidence for Rolex deliberately restricting manufacture of their products?
Because as per my post above, the actions and statements by Rolex suggest otherwise. As does their 100 year history where continually increased production year on year, and sold every watch they made to dealers, and it was the dealers problem as to how to sell those watches.
I guess you arent a businessman or you would understand the importance of making just a little bit less than the market demands. But if you want to see the consequences of flooding your market, just look at McLaren cars. Compare with FerrariBecause as per my post above, the actions and statements by Rolex suggest otherwise. As does their 100 year history where continually increased production year on year, and sold every watch they made to dealers, and it was the dealers problem as to how to sell those watches.
Rolex are Veblen goods. Their value to the buyer is to a major extent the price that they cost. Oversupply t, the price weakens, and demand follows. Instead of the buyer showing off what he can afford, he now shows he is a mug overpaying for something.
bordseye said:
Mont Blanc said:
Do you have any evidence for Rolex deliberately restricting manufacture of their products?
Because as per my post above, the actions and statements by Rolex suggest otherwise. As does their 100 year history where continually increased production year on year, and sold every watch they made to dealers, and it was the dealers problem as to how to sell those watches.
I guess you arent a businessman or you would understand the importance of making just a little bit less than the market demands. But if you want to see the consequences of flooding your market, just look at McLaren cars. Compare with FerrariBecause as per my post above, the actions and statements by Rolex suggest otherwise. As does their 100 year history where continually increased production year on year, and sold every watch they made to dealers, and it was the dealers problem as to how to sell those watches.
Rolex are Veblen goods. Their value to the buyer is to a major extent the price that they cost. Oversupply t, the price weakens, and demand follows. Instead of the buyer showing off what he can afford, he now shows he is a mug overpaying for something.
Do not forget that Rolex products were often and regularly discounted by their AD's to make a sale during the 100 years prior to the time period I mention above. Even as recently as 2015 people were getting 10% off a stainless Sub or GMT from their AD. We've all seen the photos of Daytonas sat in AD's windows with a "Special offer" price tag on them, dating from around 2012-2013.
Of course Rolex manage their production carefully so as not to flood dealers with watches they cannot sell, as this really would damage their brand and prices. But they have always been a quality/luxury product which has been readily available to anyone who wanted to just walk in and buy one, even at a discount. That was part of the attraction of the Rolex brand.
People just see the last few years of 'Tulip Mania' and think it defines Rolex and their sales model, and it does not. That false image was entirely created by AD's and the grey market.
Brent Hoffmeister said:
Geertsen said:
And manufactured in 2013Edited by Wills2 on Tuesday 4th February 14:33
Ninjin said:
...
Bottom line its demand that is the driver on prices and not supply manipulation.
Take Omega, other than the Snoopy, I don't know of any model that I can't walk in and buy or order with an accurate lead time. Why...? The demand is just not there.
...
Rolex has a relatively small range of watches when compared to brands like Omega - I'm pretty sure there are more speedmaster and seamaster models than there are Rolexes/Roli in total.Bottom line its demand that is the driver on prices and not supply manipulation.
Take Omega, other than the Snoopy, I don't know of any model that I can't walk in and buy or order with an accurate lead time. Why...? The demand is just not there.
...
Gassing Station | Watches | Top of Page | What's New | My Stuff