Rolex market is on its last legs

Well I am still on a wait list for a skydweller since 2019, and I keep emailing the AD. So far seems like they are still pretending supply is limited.

I hope you are right and this second hand market crazyness ends, and also hope the prices will go down across the industry or at least stop the raises...

I think most of this is a result of flippers having Anthony Farrer, aka the Timepiece Gentleman, available as a fence.

Ok don't think the retail prices will go down. But it will be easier to get Rolex models, sub, DJ, explorers, etc will be more readily available. The harder to get pieces will still be hard to get.

Totally. Don’t expect to be able to get a discount on a new Rolex any time soon. But certainly available at will. Except the actually limited and rare stuff.

Secondary market of almost everything except the properly rare/super hype stuff is falling.

I just don’t see how manufacturers can put prices up any more right now and expect to sell anything. JLC rises were madness.

Perfect...I am not in this hobby to flip for profit.....

Yes.

https://watchcharts.com/watches/price_index

I agree.

All that stock on Chrono24 has been in dreamland for a very long time. Flippers are now in trouble and soon I would think the used watch stores if they have large inventory.

https://watchcharts.com/watches/brand_index/rolex

Will the crowds rush to Rolex AD to get a watch ?

Unsure, they have alienated many of their potential customers with their practices.

Great news. I was always optimistic. I’d never go through the secondary market for a Rolex or any other watch really. Even this new CPO program, I’d laugh in the face of an AD that was charging over MSRP for a “gently used” Rolex. I hope most of you on WC would do the same.

If Rolex secondary market prices drop to MSRP-levels, the second and third order effects are going to be really interesting. The lack of Rolex’s on the market, almost certainly helped other brands, since people who couldn’t obtain a Rolex through an AD and couldn’t/wouldn’t pay inflated secondary prices went to substitutes. FWIW, my local AD’s have many Tudors and Omegas that were unavailable earlier this year.

My prediction for what’ll happen this year and next:

• Rolex availability at AD’s opens up. It may not be quite ‘wander into an AD and walk out with a Daytona,’ but with some steel models, it will be.

• Secondary prices for other brands - even higher priced brands - will crash, as Rolex prices aren’t there to put a floor in for the rest of the market

• AD’s will start offering more substantial discounts for other brands to move product. Omega, Tag Heuer, and the like won’t drop MSRP, but they’ll offer price support to AD’s so the AD’s can offer bigger discounts. Black Friday will be great this year.

• Price increases will be minimal in the next year.

• Luxury watch co’s in the near/sub-Rolex price range will generally fall into three camps for their 2024 releases. One group of companies didn’t plan on the market dropping like this, and they’ll introduce new high end models, only to be ridiculed as out of touch and too expensive for what they are. One group of makers will only have have mild updates (like new finishes, maybe a few tweaks) to their existing lines, since they will seen the market shifting and will have had cancelled their higher end releases. And the last group are the ones that saw that the luxury economy was going to get tough and pivoted early enough to have new product in 2024 that’s aimed at being price and value competitive (for their segment).

• We’ll see a more aggressive DTC strategy push, 0% financing (a lot of the companies have partnerships with BNPL companies like Affirm and Klarna, but we’ll see 0% financing marketed more clearly), very generous free shipping/returns to get people to sample, and subscription and loyalty programs launched.

• The super high end will be stay out of reach.

Anyone else have guesses of how things will go?

Good. I hope that bubble pops hard. Nothing more off-putting in the watch industry than a brand artificially limiting supply and blowing off potential customers...while being one of the largest manufacturers by volume. It's time this watch industry goes back to hobbyist norms and not the inflated pricing and investor/flipper chaos it's been the last 7 years.

Your comment was interesting to read.

Here are my guesses:

• The Rolex used/gray market cannot be ignored and this is not a reference to Chrono24.  Used/Grey Rolex sales have been healthy while Rolex was proclaiming shortages.  Should the availability of Rolex watches increase at the AD then the Rolex used/gray market should drop below MSRP.  Individuals whom were already purchasing from the used/grey above MSRP will still be happy to purchase used/grey Rolex at sub-MSRP and will not go to the ADs.  There is an abondance of used/grey Rolex on the market today and this will hurt the Rolex ADs.  The Rolex CPO may have been an attempt to address the abundance on the used/grey market. So, sub-MSRP at the resale level and MSRP at the ADs.

• No price increase in 2024.  Inflation is already too high and as we approach 2024 the economy will be even worst so customers will scale back due to economic uncertainties.  Some brands have already increase prices in 2023 and some have done so twice such as Omega (February and July 2023).

• Discounts from other brands will be there but not substantial in 2023.  The offerings will be a small discount combined with 0% financing.  Substantial discounts should be in Q2/Q3 in 2024.  2024 is going to be a bad year for the economy.

• Super high end as you noted will not be impacted by anything.

Love how much thought you put into this. Agree with everything you said.

Again, just like the person you’re replying to… great reply. Love the logic.

However what happens to the used and grey market dealers with lots of stock they can’t shift ? Are they gonna have to discount heavily to try stay in business or do they simply fold? Because if ADs are discounting AND doing heavy 0% push… do they have to do the same?

I wonder how liquidators will handle watches 😂… in ever sense 🤷‍♂

• I'm not sure waiting lists are stuffed full of flippers - ADs make sure of that.

• I don't think Rolex are going to increase production. Why would they.

• And I suspect any holes in waiting lists will be promptly plugged by the thousands of folks who have been denied such an opportunity in the past.

So I don't think you'll see much change in waiting lists.

In a few months you'll see the economy soften and speculation will begin again.

ADs have the manufacturers behind them. The manufacturers have access to more capital to be able to smooth things out by offering lower prices (less profit but nerveless still make a profit) and offer 0%.

Used and grey market dealers have already spent their capital into assets that are decreasing in value so they will have to discount if AD purchases are cheaper. Stay in business or fold depends how much cash they have or take a loan.

Tbh - this was only about 5 minutes of musings between meetings 🙃

Rolex is investing $1B in new production facilities to increase production. While that capacity may come online until 2029, they’re not going to let it lie fallow … or they would be blowing a massive investment.

The thinner market will affect everyone. Rolex will be fine - if any watch company in this market will be, it’s Rolex. But the waitlists won’t be as deep, and will be non-existent for some models soon enough. You’re right, thousands - tens of thousands? - of people over the years didn’t get what they wanted, but higher interest rates mean a lot of those people aren’t going to buy a luxury purchase either.

The same thing that happens to every arbitrageur that finds themselves holding on to depreciating assets: liquidate or try to hold the line … and then eventually liquidate at an even further loss.

What’ll be interesting is what happens to the platforms. There are at least four watch-specific trading platforms that I’m aware of - Watchfinder, ChronoNext, Chrono24, and Bezel. The margins on trading platforms are pretty thin on a unit basis. If trading falls (as is typically what happens to an asset class when prices crash, as the flippers aren’t trading amongst themselves and sellers fall out of the market entirely), I can’t imagine they’ll all survive.