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Watch Prices Coming Down?

bmulford

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If this is true, its not made its way to TZ, at least not for what I've been wanting to get (GO Senator Sixties in white). WIS quoted as saying "Watches are better to keep and are better than cash in a recession. They won't drop in value, and after a recession, the value is still there or more". Heh.



http://www.reuters.com/article/newsO...4BF15Q20081216

By Melanie Lee

SINGAPORE (Reuters Life!) - Suffering from recession blues and looking to offload that new Rolex watch?

Don't turn to us, say second-hand luxury stores in Singapore, who are being swamped with requests from people desperate to sell their luxury goods.

Traditionally resilient during times of economic downturn, more than 70 second hand shops in the city-state are feeling the chill of recession, as the appetite for expensive goods has fallen sharply despite big discounts.

"Rolex prices have been like a reliable currency in the past, but there are signs that even Rolex is hit by this recession wave," said Ngo Han, an avid watch collector.

"New Rolexes are selling at much lower prices than before and that has trickled down to the second-hand market," Ngo said.

Home to the highest density of millionaires in the world, Singapore is a wealth management center and a shopping destination for the region's wealthy.

UNAFFORDABLE LUXURIES

Second-hand stores that stock luxury goods, such as brand name bags and flatscreen televisions, experienced a boom in the past few years, as rising incomes and the need to upgrade to keep up with fast-changing fashions created a fertile secondary market for designer wares.

But with the city-state becoming the first Asian country to slip into recession this year, customers are changing their habits.

Where once they would have bought Rolexes or Patek Philippes that can cost over S$10,000, (about $6,775), they now opt for models that cost under S$5,000, (about $3,390), shop owners said.

"Business has gone down about 20 to 30 percent. The interest to buy watches is still there, but whether people can afford to buy is another thing," said Alvin Lye of Monster-Time.

His online store, www.monster-time.com, carries second hand watches from Breitling, Audemars Piguet, Cartier and Longines.

During lunch hour in Singapore's financial district, people fill up May Fong's second-hand luxury bag store, but few are buying, even with many of the bags going at a 50 percent discount.

"There is definitely a drop in business. People are more conscious (of their) spending, even if it's a bargain," Fong said.

TEMPORARY SETBACKS?

Shops that rent, rather than sell, designer goods, are however reporting a spike in rentals despite the recession, suggesting some locals are still keen to get glamorous goods, albeit temporarily.

"New bags are leased out within seconds (of being) posted on the website," ex-policeman Tan Ho Ching, who rents out designer bags for about S$125 a week via his online store www.thatbagiwant.com, told local press on Sunday.

The recession's impact on workers whose salaries are commission-based, such as property agents, could be a likely explanation for the drop-off in sales.

"These people tend to earn much more during the boom times, and they are also likely to make up a significant portion of the consumers for these luxury goods," said Alvin Liew, an economist with Standard Chartered in Singapore.

However, some watch enthusiasts said they were holding onto their horological investments, keen to turn a profit once the recession lifts.

A recent Reuters poll said Singapore would be the worst performing emerging Asian economy next year, but would see a recovery together with the rest of the region in 2010 [ID:nHKG10473].

"Watches are better to keep and are better than cash in a recession. They won't drop in value, and after a recession, the value is still there or more," said collector Yeo on online watch forum www.swx.com.sg.
 

KBW

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Watch prices are actually going up quite a bit (as far as new MSRP). Most of the companies are listing that their movements will cost 11+% more to produce in 2009 than in 2008. For what reason I have no clue
 

bmulford

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Originally Posted by KBW
Watch prices are actually going up quite a bit (as far as new MSRP). Most of the companies are listing that their movements will cost 11+% more to produce in 2009 than in 2008. For what reason I have no clue

Metal costing more? Currency exchange at the time of production estimation? Either way, Im waiting to find that GO 60's for 2k...
 

Star

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Omega is trying to catch up with Rolex in terms of being an equal. Rolex on the other hand is executing a strategy of pushing their product further out of reach so as to make it even more desirable. They can do this as long as there are people out there wanting to pay the price of which no doubt there are.

I would say that the biggest losers are dealers who are forced to buy stock particularly those who are sensitive to the current economic climate.
 

lizmasc

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This reminds of the Arabs that were seduced by some US people to buy gold as it was a good investment. They boughts tons of it from the states and the value of gold went efficiently down, worthless when compared to some years/decades ago
 

Star

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Originally Posted by apropos
Just saw this - if anything, both those factors would conspire to drive prices down for the most part.

Rolex would never never never never never never never never never never never never never never never never ever drop their prices even if the cost of raw materials was free, labour decided to work for the love of it, and the Swiss franc collapsed against the US (assuming most sales are in $USD and then transfered into Swiss....Assuming demand is inelastic as it seems, a few $US dollars would translate into many Swiss Francs on their P&I, Balance Sheet -Cash and receivablesm and Cash Flow statement).

Your not paying the premium on the object but rather the name printed on the dial and what it is perceived to stand for.
 

lucubrator

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Originally Posted by Star
Rolex would never never never never never never never never never never never never never never never never ever drop their prices even if the cost of raw materials was free, labour decided to work for the love of it, and the Swiss franc collapsed against the US (assuming most sales are in $USD and then transfered into Swiss....Assuming demand is inelastic as it seems, a few $US dollars would translate into many Swiss Francs on their P&I, Balance Sheet -Cash and receivablesm and Cash Flow statement).

Your not paying the premium on the object but rather the name printed on the dial and what it is perceived to stand for.


Yes, a classic example of a Veblen good.
 

gazman70k

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Originally Posted by apropos
What an idiot.

Could not agree more but what would you expect a grey market dealer to say during these times.

Watches are not investments but people have made poor connections between the hike in demand for certain brands, arbitrage and currency fluctuations as a sign of "increasing" value.

Gaz
 

Mathew J

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Originally Posted by Star
Omega is trying to catch up with Rolex in terms of being an equal. Rolex on the other hand is executing a strategy of pushing their product further out of reach so as to make it even more desirable. They can do this as long as there are people out there wanting to pay the price of which no doubt there are.

I would say that the biggest losers are dealers who are forced to buy stock particularly those who are sensitive to the current economic climate.


Dont know about that, I already know many would have been Rolex buyers who are looking elsewhere due to their price increases.
 

Mathew J

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Originally Posted by Star
Rolex would never never never never never never never never never never never never never never never never ever drop their prices even if the cost of raw materials was free, labour decided to work for the love of it, and the Swiss franc collapsed against the US (assuming most sales are in $USD and then transfered into Swiss....Assuming demand is inelastic as it seems, a few $US dollars would translate into many Swiss Francs on their P&I, Balance Sheet -Cash and receivablesm and Cash Flow statement).

Your not paying the premium on the object but rather the name printed on the dial and what it is perceived to stand for.


Rolex has been known to drop their prices in other markets in the past when they overpriced themselves...never say never...remember they just lost a ton of money in investments with that Madhoff guy as well...
 

Concordia

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Originally Posted by bmulford
WIS quoted as saying "Watches are better to keep and are better than cash in a recession. They won't drop in value, and after a recession, the value is still there or more".


Unlike cash, which not only doesn't hold its value, it can't be spent at the grocery store. Oh, wait...
 

gdl203

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Originally Posted by gazman70k
Could not agree more but what would you expect a grey market dealer to say during these times.

Watches are not investments but people have made poor connections between the hike in demand for certain brands, arbitrage and currency fluctuations as a sign of "increasing" value.


+1 to what Gazman said. Although there are tons of collectors who do believe that watches are a good investment (and for some, it is), this particular person (YKC) is one of the largest grey market dealers so his statement should be taken with a grain of salt.
 

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