Just in... Rolex buys Bucherer!
Discussion
EK993 said:
Some commentary here from someone in the industry. it’s obvious the AD network will be dismantled and the new distribution channel will be boutiques
https://youtu.be/OsK9xydui-I?si=g_tsWyojZviL5XKq
Thanks, will watch later but I can't see how that would work in the UK. Over here there are just a handful of Bucherer branches and they're all in London. https://youtu.be/OsK9xydui-I?si=g_tsWyojZviL5XKq
Jamescrs said:
Quite simply they will open new branches in all the major cities around the U.K I'm.sure Rolex have the money to do it quickly if they wanted to
That's quite some commitment but as you say they have the money.I've also often thought that there are too many Rolex dealers in the UK. Just look at London, on Regent St you have Mappin and Webb and WOS almost opposite each other, for Rolex that makes little sense.
NDA said:
DTC (direct to consumer) works for quite a few brands - Omega, Patek, Seiko (and others), Tesla, Apple.... etc I guess the difference with this is branding - it won't necessarily be that obvious that Bucherer is Rolex owned.
Omega and Patek also sell through other stores though and even some Omega boutiques are actually owned by WOS group.The question is whether Rolex are wanting to go the Tesla route and ONLY be DTC, it would involve a huge commitment from Rolex as Bucherer has only a handful of stores in the UK and none at all in the middle or far east.
Mont Blanc said:
The whole "buy a load of jewellery and a Datejust so you can get on the list for something else" is exactly what Rolex want to put an end to, and this is the start of it.
Rolex are fed up of the reputational damage being done to the brand them by AD's messing people around and making them spend a fortune on other crap just so they can get their hands on the good stuff. It isn't good for Rolex and only good for the AD's who are milking the whole supply and demand situation for all it is worth, and pissing off thousands of customers, and potential customers, in the process.
I guarantee the grand plan is to end AD's and go to a DTC sale model as others have suggested, It is the only way that Rolex will fully gain control of the way sales are carried out and ensure that it is 'fair and reasonable' not just hand everything over to the high-rollers.
Throughout the 100 year history of Rolex, they have always sold every watch they have ever produced, without too much of a problem, so they certainly don't need their sales figures bumped up by AD's flogging people the undesirable watches in order to get something 'better'.
Not sure it's quite that clear cut.Rolex are fed up of the reputational damage being done to the brand them by AD's messing people around and making them spend a fortune on other crap just so they can get their hands on the good stuff. It isn't good for Rolex and only good for the AD's who are milking the whole supply and demand situation for all it is worth, and pissing off thousands of customers, and potential customers, in the process.
I guarantee the grand plan is to end AD's and go to a DTC sale model as others have suggested, It is the only way that Rolex will fully gain control of the way sales are carried out and ensure that it is 'fair and reasonable' not just hand everything over to the high-rollers.
Throughout the 100 year history of Rolex, they have always sold every watch they have ever produced, without too much of a problem, so they certainly don't need their sales figures bumped up by AD's flogging people the undesirable watches in order to get something 'better'.
Watches will still need to be allocated, how will that be done?
Lets say that from tomorrow morning all Rolex watches are sold DTC via Rolex owned shops. Can I then just walk in and buy a Panda?
How will Rolex decide who gets the Panda? I would say it'll be exactly the same as how the ADs do it now ie purchase history or 'loyalty' to the brand. "Would sir like to purchase this lovely £30k solid gold diamond encrusted 31mm datejust that we have in the window?"
Nothing will change for the end user.
Mont Blanc said:
Your quoting appears to have gone slightly wrong.
Many watches did indeed hang around, and some maybe required some discount, but the point is this: They all still sold.
Plus, if you were were an AD, it wasn’t Rolex’s problem anyway. They sold you the watches, and it was your problem of how to sell them and make a profit. If they hung around getting dusty for 12 months then that’s the AD’s problem.
Either way, Rolex have always sold all the watches they manufactured, and likely always will do.
Yeah, I don't think you quite grasp how a business works lolMany watches did indeed hang around, and some maybe required some discount, but the point is this: They all still sold.
Plus, if you were were an AD, it wasn’t Rolex’s problem anyway. They sold you the watches, and it was your problem of how to sell them and make a profit. If they hung around getting dusty for 12 months then that’s the AD’s problem.
Either way, Rolex have always sold all the watches they manufactured, and likely always will do.
Mont Blanc said:
My understanding of the AD model is just what I have read online, so I’m more than happy to be corrected.
I read that AD’s were allocated a certain number of watches each month, and invoiced for them.
AD’s do not have a choice in what they are allocated. They do not request specific stock. They receive a shipment of assorted watches from Rolex, and then have to pay for them. If the AD has to offer incentives or a discount to sell them, then that’s all on them. Rolex still gets paid what they requested on their invoice. The markup on a Rolex by an AD to get to RRP averages around 40%, so there was always room for AD to discount and still make a profit on the watches during slower times.
So looking at it purely, and only, from a Rolex point of view, they sell all the watches they make, every month, either by:
Sending them to AD’s who have to pay for the items they receive.
Sending them to their own Boutiques, where equally they have always sold, even if years ago some models would hang around for some time (although not during the last few years)
If the Rolex model operates differently from this, I would be interested in hearing how it does work, but as far as I can see, I stand by my original point of Rolex have always sold everything they have manufactured.
Rolex will of course monitor feedback and sales from AD’s and boutiques, and potentially adjust production numbers accordingly.
Unless someone knows differently, Rolex have never had to buy back unsold stock, or anything like that.
I am aware that groups such as Richemont (Cartier, Montblanc, IWC, Piaget, and Vacheron Constantin) have at times taken back and destroyed hundreds of millions of pounds worth of watches and other goods, from their stores, because they remained unsold, and they needed to protect their brand from becoming available at heavy discounts.
I’m not even sure what we are disagreeing about. My initial point is that a move to purely a DTC/boutique model would be absolutely fine for Rolex, as they will no doubt continue to sell every watch they produce, as they have done for decades and decades, even if some discounts have to be offered in times of economic downturn.
We're disagreeing on a basic point.I read that AD’s were allocated a certain number of watches each month, and invoiced for them.
AD’s do not have a choice in what they are allocated. They do not request specific stock. They receive a shipment of assorted watches from Rolex, and then have to pay for them. If the AD has to offer incentives or a discount to sell them, then that’s all on them. Rolex still gets paid what they requested on their invoice. The markup on a Rolex by an AD to get to RRP averages around 40%, so there was always room for AD to discount and still make a profit on the watches during slower times.
So looking at it purely, and only, from a Rolex point of view, they sell all the watches they make, every month, either by:
Sending them to AD’s who have to pay for the items they receive.
Sending them to their own Boutiques, where equally they have always sold, even if years ago some models would hang around for some time (although not during the last few years)
If the Rolex model operates differently from this, I would be interested in hearing how it does work, but as far as I can see, I stand by my original point of Rolex have always sold everything they have manufactured.
Rolex will of course monitor feedback and sales from AD’s and boutiques, and potentially adjust production numbers accordingly.
Unless someone knows differently, Rolex have never had to buy back unsold stock, or anything like that.
I am aware that groups such as Richemont (Cartier, Montblanc, IWC, Piaget, and Vacheron Constantin) have at times taken back and destroyed hundreds of millions of pounds worth of watches and other goods, from their stores, because they remained unsold, and they needed to protect their brand from becoming available at heavy discounts.
I’m not even sure what we are disagreeing about. My initial point is that a move to purely a DTC/boutique model would be absolutely fine for Rolex, as they will no doubt continue to sell every watch they produce, as they have done for decades and decades, even if some discounts have to be offered in times of economic downturn.
Edited by Mont Blanc on Wednesday 13th September 10:35
The model you outline is basically correct however imho you are missing something.
Lets say Rolex supplies AD with model X. In the old days model X could sit on the shelf for a year. You say that's of no concern to Rolex as the AD has paid for the watch.
However the AD will not purchase another model X and Rolex will not produce/supply because there is no point if they can't shift the one they have.
Fast forward and now model X actually has a waiting list, so the AD can virtually shift as many pieces as Rolex can supply. The reason it now has a waitlist is because people are prepared to buy it to help them get what they really want ie model Y and model Z.
So over the course of the year Rolex now produces and sells the AD ten model X watches rather than the previous one.
Which do you think Rolex prefers? This is why Rolex does want and does benefit from the hype. They want the hype from model Y and Z to be able to sell more model X. They don't just want to sell a million Y and Z models because that would flood the market and kill the hype....in other words they don't just want to sell a million subs, gmts and daytonas.
You say that they have always sold as many watches as they make. That's because they have been fairly strict about matching supply to demand. However they would, like any business, want greater demand so they can produce and supply more watches and make more profit.
In summary, they do like the hype and they are instrumental in creating it, it's not all the ADs fault. Hype means they can produce and sell more watches whilst still maintaining the perception of rarity.
That's my take on things anyway
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