The Watch Appreciation Thread - Part two (Rolex, Patek Philippe, Audemars Piguet, Jaeger LeCoultre,

[Ambulance Chaser]

I used Wempe to send my GO to the Swatch spa in New Jersey. I suppose I could have sent it there myself, but I wanted the peace of mind of going through an AD. Everything turned out fine.

 

[Dino944]

I used Wempe to send my GO to the Swatch spa in New Jersey. I suppose I could have sent it there myself, but I wanted the peace of mind of going through an AD. Everything turned out fine.

Glad that worked out and they did things correctly. I used to think they same thing about feeling better dropping a watch with an AD rather than sending it myself. However, I will only send my watch directly to a service center or drop it off at an actual boutique (not AD). One of my friends learned the hard way, bringing a Breitling chronoraph to a large AD (I will not name names). He was told the watch would be shipped to the company's service center. He eventually got the watch back, it wasn't running right when he got it back, and it had been poorly refinished when they polished it. He brought the watch back a few days later and complained about the issues. Got the watch back a few weeks later and it still wasn't good. So he contacted the manufacturer directly to speak to someone in customer service to complain. That is when he learned they had no record of ever receiving or working on his watch. The AD serviced the watch at its own service center charged him as though it had gone to the manufacturer and did a lousy job. He was very unhappy with the watch and traded it toward something else. I like ADs for purchases, but that's where it ends for me.

 

[Ambulance Chaser]

As expected, there's a lot of chatter on various watch forums on the effect of the expected global economic slowdown on the watch market. Here's my $.02 on what might happen, using the example of SS sports Rolex.

The first wave will hit the ADs. The majority of Rolex buyers are middle-class and upper-middle-class folks who will be affected by the downturn in the markets. Many of them have lost the jobs or fear losing their jobs, and spending high four to low five figures on a luxury item like a watch is the last thing on their minds. These people will take their names off the waitlist. ADs will then go down the waitlist and give potential buyers a call much earlier than those buyers expected to gauge interest. If the ADs can't sell their stock to buyers on the waitlist, they will put their watches in the display case and allow walk-ins to buy. If there aren't enough walk-ins to buy, ADs will start discounting.

The lowered demand for watches will then affect the gray market/gently pre-owned dealers. The only reason to go that route over an AD is to get a watch that is not readily available at an AD or to get a discount on a watch that is. As prices drop at ADs, these dealers will have to drop their prices to compete. A few will attempt to ride out the storm, but a lot will have to sell stock.

Finally, the private flippers. These folks are in the same position as the gray/pre-owned dealers, but will have to offer a larger discount because they don't have the same reputation. I think we might see some private non-flippers (the folks who bought to enjoy, not to make a quick buck) if things get really bad.

In sum, the days of popular watch models selling for 50% above MSRP are over. How low they will go is anyone's guess.

Any thoughts?

 

[FibroblastsMakeLeather]

As expected, there's a lot of chatter on various watch forums on the effect of the expected global economic slowdown on the watch market. Here's my $.02 on what might happen, using the example of SS sports Rolex.

The first wave will hit the ADs. The majority of Rolex buyers are middle-class and upper-middle-class folks who will be affected by the downturn in the markets. Many of them have lost the jobs or fear losing their jobs, and spending high four to low five figures on a luxury item like a watch is the last thing on their minds. These people will take their names off the waitlist. ADs will then go down the waitlist and give potential buyers a call much earlier than those buyers expected to gauge interest. If the ADs can't sell their stock to buyers on the waitlist, they will put their watches in the display case and allow walk-ins to buy. If there aren't enough walk-ins to buy, ADs will start discounting.

The lowered demand for watches will then affect the gray market/gently pre-owned dealers. The only reason to go that route over an AD is to get a watch that is not readily available at an AD or to get a discount on a watch that is. As prices drop at ADs, these dealers will have to drop their prices to compete. A few will attempt to ride out the storm, but a lot will have to sell stock.

Finally, the private flippers. These folks are in the same position as the gray/pre-owned dealers, but will have to offer a larger discount because they don't have the same reputation. I think we might see some private non-flippers (the folks who bought to enjoy, not to make a quick buck) if things get really bad.

In sum, the days of popular watch models selling for 50% above MSRP are over. How low they will go is anyone's guess.

Any thoughts?

I think your analysis is well written and logical.

I very much hope that things don't get really bad.

 

[Thin White Duke]

As expected, there's a lot of chatter on various watch forums on the effect of the expected global economic slowdown on the watch market. Here's my $.02 on what might happen, using the example of SS sports Rolex.

The first wave will hit the ADs. The majority of Rolex buyers are middle-class and upper-middle-class folks who will be affected by the downturn in the markets. Many of them have lost the jobs or fear losing their jobs, and spending high four to low five figures on a luxury item like a watch is the last thing on their minds. These people will take their names off the waitlist. ADs will then go down the waitlist and give potential buyers a call much earlier than those buyers expected to gauge interest. If the ADs can't sell their stock to buyers on the waitlist, they will put their watches in the display case and allow walk-ins to buy. If there aren't enough walk-ins to buy, ADs will start discounting.

The lowered demand for watches will then affect the gray market/gently pre-owned dealers. The only reason to go that route over an AD is to get a watch that is not readily available at an AD or to get a discount on a watch that is. As prices drop at ADs, these dealers will have to drop their prices to compete. A few will attempt to ride out the storm, but a lot will have to sell stock.

Finally, the private flippers. These folks are in the same position as the gray/pre-owned dealers, but will have to offer a larger discount because they don't have the same reputation. I think we might see some private non-flippers (the folks who bought to enjoy, not to make a quick buck) if things get really bad.

In sum, the days of popular watch models selling for 50% above MSRP are over. How low they will go is anyone's guess.

Any thoughts?

Well the situation is unprecented in so many ways that predictions abound but are hard to judge. That said your analysis seems to make sense. Having been on the wait list for approx 20 months for a Pepsi with the cash set aside, for purely selfish reasons I hope you are spot on!

And by no means do I spend a lot of time trawling such things but just scoping eBay as a rough and ready gauge, grey market prices for a Pepsi were up around $19-20k not long ago, double the MRP, and can now be had BNWT at around $16k which is right in line with your prediction. Anyone who trawls other sites like WUS or chrono24 etc feel free to chip in with your observations.

Let’s face it, grey market prices were getting out of hand so a ‘market correction’ - even for as drastic a reason as we currently have, is not such a bad thing.

 

[Dino944]

As expected, there's a lot of chatter on various watch forums on the effect of the expected global economic slowdown on the watch market. Here's my $.02 on what might happen, using the example of SS sports Rolex.

The first wave will hit the ADs. The majority of Rolex buyers are middle-class and upper-middle-class folks who will be affected by the downturn in the markets. Many of them have lost the jobs or fear losing their jobs, and spending high four to low five figures on a luxury item like a watch is the last thing on their minds. These people will take their names off the waitlist. ADs will then go down the waitlist and give potential buyers a call much earlier than those buyers expected to gauge interest. If the ADs can't sell their stock to buyers on the waitlist, they will put their watches in the display case and allow walk-ins to buy. If there aren't enough walk-ins to buy, ADs will start discounting.

The lowered demand for watches will then affect the gray market/gently pre-owned dealers. The only reason to go that route over an AD is to get a watch that is not readily available at an AD or to get a discount on a watch that is. As prices drop at ADs, these dealers will have to drop their prices to compete. A few will attempt to ride out the storm, but a lot will have to sell stock.

Finally, the private flippers. These folks are in the same position as the gray/pre-owned dealers, but will have to offer a larger discount because they don't have the same reputation. I think we might see some private non-flippers (the folks who bought to enjoy, not to make a quick buck) if things get really bad.

In sum, the days of popular watch models selling for 50% above MSRP are over. How low they will go is anyone's guess.

Any thoughts?

I agree with a most of what you wrote. However, how much of this happens, really depends on how long things remain the way they are now, with lockdowns and shelter in place orders for all non-essential workers. I think things would have to go on this way for a long time to see discounts from ADs on steel sports Rolex watches. I haven't seen discounts on steel sport model Rolex watches in more than 5 yeas and that was when you could walk into ADs and find any model except SS Daytonas in showcases, and before watches like steel GMTs and Subs were selling for more than their list price.

 

[Ambulance Chaser]

I agree that we're unlikely to get to the point where Rolex ADs are offering discounts on their most popular models, even a small discount like 10%. I think most folks will be happy if those models are readily available at MSRP. And ADs stop the "Buy stuff from me that doesn't sell before you get the opportunity to buy stuff from me that does sell" nonsense.

 

[WSW]

MSRP seems very likely and I think it is even possible that hot models like the Daytona and GMT will be discounted slightly sometime next year. This is going to be the worst recession in modern history, perhaps even surpassing the Great Depression. Plus, no country is immune. The market was a huge bubble before and the collapse will be shockingly swift. I think possible triggers for a mass exit for the doors will be when the millions of white collar unemployment filings are revealed along with negative GDP growth officially declared. If a couple of big companies go under, that'll also have a triggering effect.

Plus, the inept response here in the U.S. will ensure that the disease drags on for many months, perhaps into the fall and winter.

 

[Omega Male]

Don't forget that production is also shut down this time around, which wasn't the case during the GFC. What prolonged the market decline then were big overhangs of stock, which will not necessarily be the case this time around. Of course, if the economic damage is severe enough it still won't matter -- few people shop for luxury items when scared and unemployed.

 

[Dino944]

I agree that we're unlikely to get to the point where Rolex ADs are offering discounts on their most popular models, even a small discount like 10%. I think most folks will be happy if those models are readily available at MSRP. And ADs stop the "Buy stuff from me that doesn't sell before you get the opportunity to buy stuff from me that does sell" nonsense.

I haven't seen a 10% discount on steel Daytonas since roughly 2011. There was an AD near me that would put the MSRP on all Rolex watches, and a second price tag reflecting a 10% discount off all steel Rolex watches except Daytonas. Very nice friendly, family owned business that had been a Rolex AD for more than 30 years, but they lost their Rolex contract around 2012. Not sure we will ever see discounts like that on new steel GMTs, Subs, Explorers etc, but as you suggest, I would welcome the return of ADs not suggesting that we have to purchase thousands of dollars worth of crap we don't care about, in order to get the "Privilege" of getting on a waiting list for the pieces we do want.

 

[Viral]

MSRP is the equivalent of a discount these days

 

[WSW]

Don't forget that production is also shut down this time around, which wasn't the case during the GFC. What prolonged the market decline then were big overhangs of stock, which will not necessarily be the case this time around. Of course, if the economic damage is severe enough it still won't matter -- few people shop for luxury items when scared and unemployed.

I don't think that will make much of a difference though. We've all seen the huge stocks of the most desirable watches on Instagram and at grey market dealers. Even large ADs have inventory that they were holding on for VVIPs that now have to be liquidated, not to mention flippers and private individual sellers.

 

[montecristo#2]

MSRP seems very likely and I think it is even possible that hot models like the Daytona and GMT will be discounted slightly sometime next year. This is going to be the worst recession in modern history, perhaps even surpassing the Great Depression. Plus, no country is immune. The market was a huge bubble before and the collapse will be shockingly swift. I think possible triggers for a mass exit for the doors will be when the millions of white collar unemployment filings are revealed along with negative GDP growth officially declared. If a couple of big companies go under, that'll also have a triggering effect.

Plus, the inept response here in the U.S. will ensure that the disease drags on for many months, perhaps into the fall and winter.

I’m skeptical it will be that bad.

 

[Ambulance Chaser]

I'm also curious as to how brands that don't hold their value like Lange are going to do. If I can pick up a Saxonia Thin 37 mm for around $9K NIB, I'll be a happy man.

 

[Texasmade]

Lange also recently raised prices on their models earlier in the year. Not exactly the best timing for them.