Business Breakdown Podcast - Rolex

Something a bit different.  Being an investor, my non watch listening tends to be rather company and business news oriented.

A rare combination of the two where Patrick O'Shaughnessy interviewed Ben Clymer, analyzing the business of the Big Crown.

Have a listen, I think you'll find it interesting (if only for the gossip about Rolex).

https://www.joincolossus.com/episodes/12878745/clymer-rolex-timeless-excellence?tab=blocks 

The most interesting point to me by far is Ben Clymer's comment that he thinks Rolex's biggest weakness is that they have trained a generation of customers to walk into the store during big life events and be disappointed that they can't actually buy one.  This customer is going to forever be against Rolex (rightly or wrongly) and could have some seismic impacts in later years.

Cool and thought provoking stuff l.

Picture for the engagement.

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Interested comment that I agree with. I started watch collecting after my Datejust + Submariner years of wearing the same two great watches waned. I don't own a Rolex dive watch preferring GS and a Marine Master. Often I wear a RESCO = total tool watch. If my AD called with an available Sub I would buy it for my son and keep it boxed. Rolex created my head turn to other brands. GS , Omega & Zenith IMO are movement,  tech and case fit/finish leaders. Rolex are great. It's a shame there isn't inventory for those love event moments.  

My teenage son actually wants a Planet Ocean 600m titanium.  He spends most of his time in the ocean and pools. It's G Shock every day and the Planet Ocean as a Grail. Rolex is for Hollywood Executives at their Malibu home in his mind. These kids surf, swim, are certified Lifeguards,  trek, camp and climb. They all know luxury brand watches and Rolex is not the brand they want. It's amazing that young people are not just sold on an Apple Watch. My kid would never wear one = too delicate. Suunto,  Garmin,  Samsung - sure as cool gadgets.  Every day they live G Shock or Timex Ironman  and talk a lot about Omega and Seko. This is the next generation of conspicuous consumers. 

 Maybe Rolex should call Ferrari for tips on Veblen purchase product inventory.  They build just enough units to hold value & you can still officially order a car. It may take a long while but you know you will get the product some day. AD'S & Rolex would have a lot of deposit cash on hand if they took money for an order. 

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The one and only time I went into an AD and walked out with a Rolex was my first purchase  in 2014. Eight years ago! After that point, I had to play the waitlist game. 

If the inability to walk in a buy any model persists for 8-10 years, then Ben’s point is spot-in there will have been an entire generation of up and coming buyers who don’t know the joy of that purchase experience and will move in to other brands. If Rolex thinks in decades, then they should be concerned. 

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Rolexahoma

The one and only time I went into an AD and walked out with a Rolex was my first purchase  in 2014. Eight years ago! After that point, I had to play the waitlist game. 

If the inability to walk in a buy any model persists for 8-10 years, then Ben’s point is spot-in there will have been an entire generation of up and coming buyers who don’t know the joy of that purchase experience and will move in to other brands. If Rolex thinks in decades, then they should be concerned. 

When I started collecting, it was kind of at the end of the Rolex is easily available phase (2012ish). Owned a datejust but it didn't stick.  When I next tried to buy one, it was 2018 and I waited 3 years to get a model I didn't initially want (two tone Daytona instead of ceramic).  So by my count, it's been like this for at least 4-5 years now.  I'll be really curious if it persists because I agree it's a bad outcome if they let this persistent shortage thing go on.

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It does make sense what Ben Clymer says and the conclusion is somewhat logical. 

However, I grew up thinking Omega and Breitling were exactly on the same level so the whole situation doesn't make sense. Granted I am not big in social media and all but I cannot understand for the life of me why Rolex is so über-desirable and expensive on the secondary market to begin with (and yes I know the history). As such I stay away from drawing conclusions based simply on what makes sense and seems logical. 

I wouldn't be surprised if it ends up having the opposite effect and the whole generation becomes obsessed with the thing they cannot have just to want it even more. For me it's a toss-up.

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MegaBob

It does make sense what Ben Clymer says and the conclusion is somewhat logical. 

However, I grew up thinking Omega and Breitling were exactly on the same level so the whole situation doesn't make sense. Granted I am not big in social media and all but I cannot understand for the life of me why Rolex is so über-desirable and expensive on the secondary market to begin with (and yes I know the history). As such I stay away from drawing conclusions based simply on what makes sense and seems logical. 

I wouldn't be surprised if it ends up having the opposite effect and the whole generation becomes obsessed with the thing they cannot have just to want it even more. For me it's a toss-up.

The one thing I've learned about watches....nothing is logical.

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I agree, Rolex will lose their desirability if the waiting list doesn't get shorter.  Omega are better quality in my humble opinion and I'm being swayed towards Tudor now too.

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Can’t argue with Ben’s point here. Rolex has become more of a pipe dream for many recently and will only continue unless supply improves.