Conflicting reports over the future of the watch market

[Madison1]

In the last two days I have read the following headlines:

Large grey market dealer believes the Rolex CPO will boost second hand sales and prices will rise

Chrono24 to cut 40% of staff as watch prices slump

I am slightly bemused as a spectator. I initially bought grey with the comfort in knowing if I wanted to trade into another piece I would not lose anything or makeba minimal loss. Since the madness I only buy from my AD so it doesn't hugely affect me but prices have clearly been on a downward trajectory since March. Interesting to see if that carries or if the CPO does inject a boost.

My feeling is a lot of people likely got burned buying at the hype prices and the majority of non-wis have simply moved on or no longer have the 'free' money.

[Madison1]

PS: Apologies for any grammatical errors as I am writing on a mobile and my eyes are old

[omar-rye]

There are biases out there certainly. Hence you’ll come up with different outlooks and projections. We don’t know what CPO will truly look like and the actual consequences it will bring to the supply and demand equation. What we do know for certain is the economy is not in a good place world wide. Just that alone will rid of some of the demand. To what extend? No one really knows

[WILLIWALKER]

Originally Posted by Madison1

In the last two days I have read the following headlines:

Large grey market dealer believes the Rolex CPO will boost second hand sales and prices will rise

Chrono24 to cut 40% of staff as watch prices slump

I am slightly bemused as a spectator. I initially bought grey with the comfort in knowing if I wanted to trade into another piece I would not lose anything or makeba minimal loss. Since the madness I only buy from my AD so it doesn't hugely affect me but prices have clearly been on a downward trajectory since March. Interesting to see if that carries or if the CPO does inject a boost.

My feeling is a lot of people likely got burned buying at the hype prices and the majority of non-wis have simply moved on or no longer have the 'free' money.

For me, Rolex with its CPO will only try to mitigate the fall and smooth the curve and ultimately maintain correct prices for each ref: x0.8 for the majority of the catalog and x1.2 or 1.4 for the steel Daytona.

The loss will remain acceptable for a new purchase. Thus, the negotiation for the purchase will not reappear except model in gold.
And the owners will be generally satisfied with the value of the watch in relation to its new value.

I repeat, it smells bad.
And of course the sellers of gray preach for their parish, but we have to get back to the facts

[taitun4life]

Originally Posted by WILLIWALKER

For me, Rolex with its CPO will only try to mitigate the fall and smooth the curve and ultimately maintain correct prices for each ref: x0.8 for the majority of the catalog and x1.2 or 1.4 for the steel Daytona.

The loss will remain acceptable for a new purchase. Thus, the negotiation for the purchase will not reappear except model in gold.
And the owners will be generally satisfied with the value of the watch in relation to its new value.

I repeat, it smells bad.
And of course the sellers of gray preach for their parish, but we have to get back to the facts

[fskywalker]

Originally Posted by omar-rye

There are biases out there certainly. Hence you’ll come up with different outlooks and projections. We don’t know what CPO will truly look like and the actual consequences it will bring to the supply and demand equation. What we do know for certain is the economy is not in a good place world wide. Just that alone will rid of some of the demand. To what extend? No one really knows

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[Trailboss516]

People write things to advance their own agendas. Only time will tell.

[garyk]

Originally Posted by Trailboss516

People write things to advance their own agendas. Only time will tell.

Haha, I see what you did there…

[Moondoggy]

Goodness me.

[enjoythemusic]

Some business flourish, some don't. Just because Enron went kaput doesn't mean the energy sector is bad. Just because Lehman, Bear Sterns, etc went out of biz doesn't mean all those US Dollar currency banks are worthless (just yet).

The mechanical timepiece industry is doing better than it ever has.

[Swearengen]

I thought some of the prices achieved at the lastest Bonhams auction were a little on the low side, especially for Vintages Rolex:

https://www.bonhams.com/auction/2766...f-motorsports/

[77T]

Originally Posted by Madison1

PS: Apologies for any grammatical errors as I am writing on a mobile and my eyes are old

Apology isn’t needed - I thought the title could have menat furor as much as Future and been just as apt.


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[Mystro]

It really doesn’t matter when you buy if you are buying out of love for the watch. Many believe their time is valuable and having the watch they love on their wrist now is more in tune with their lifestyle.

As far as what the watch market, it has become its own hobby and the actual watches are irrelevant.

[alphadweller]

CPO won't make a difference. After six years of consistent price hikes, especially on the hot models, we've been witnessing a significant correction for the past 9 months. Some watches have seen half of their value vanish in the secondary market. This is serious stuff. Many people are dumping their watches on platforms, I suspect the "investor" type. There seems to be a lot less appetite for luxury watches. Not only prices are down, but hot watches are sitting. Dealers are no longer buying from the general public either.

How could the CPO program counteract a falling demand with an attempt to set preowned prices well above current market prices? If I'm not a buyer at 12k for a Sub, how am I suddenly gonna be one at 17K? It makes no sense. I find it to be such a stupid move. Greedy ADs have shot themselves in the foot and are sending a terrible message to customers IMHO. This CPO rip-off exercice is a daylight extortion which can only blow up in their faces. What they should have done is undercut the market, offer watches below secondary market price (still at a premium over retail) if their intention was to support the market and attract buyers.

Let the market continue its correction so that we can get rid of outright speculators, I say. Too much investment money, a good cleansing is overdue, IMHO.

[wjv4200]

Tourneau has been selling used rolexes for as long as I can remember. I don’t understand what all the fuss is about, this is not a new idea.

[DJ2020]

Originally Posted by Mystro

It really doesn’t matter when you buy if you are buying out of love for the watch. Many believe their time is valuable and having the watch they love on their wrist now is more in tune with their lifestyle.

As far as what the watch market, it has become its own hobby and the actual watches are irrelevant.

I agree. I am so glad I enjoy watches for what they are. Thankfully as such I am immune to any investment aspect, Having to deal with cantankerous AD's, wait list, bundling etc. Just buy what I like and enjoy. So nice.

[JSolution]

Originally Posted by wjv4200

Tourneau has been selling used rolexes for as long as I can remember. I don’t understand what all the fuss is about, this is not a new idea.

I agree my AD has sold used watches for over list for as long as they have been.

[atxwatch]

The state of the watch market will depend on economic fundamentals, not on what CPO will or won't do. Here is my lay opinion:

1) We are about 2/3rds through the current bear market. The last 1/3rd will see another large drop in the markets through the middle of 2023 and that will be the most painful, ending in capitulation.

2) There will be increasing layoffs past the point of capitulation, especially in white collar/tech.

3) Consumers will stop spending even more as asset prices structurally deflate due to rising interest rates and pressure on jobs and wages, leading to a pullback in the wealth effect.

4) Crypto may continue to slide as more malfeasance comes to light.

5) The watch market was overhyped for 1-2 years and watches became an alternative asset. With flipping dying, the "institutional" or flipper money has left the chat, reducing demand and putting downward pressure on prices as availability increases.

6) If the economy worsens, more watches will be offloaded in the secondary market, putting even more pressure on watch prices.

None of these points above make me think that it is likely the watch market as a whole will do extremely well for the next year or two.

WHat you think happens will depend on how you read the tea leaves concerning the overall economy for the next 12-24 months.

[Calatrava r]

Originally Posted by wjv4200

Tourneau has been selling used rolexes for as long as I can remember. I don’t understand what all the fuss is about, this is not a new idea.

My reaction entirely when I heard of the new program. Remember, ADs still have to go out and compete for use pieces against the traditional used market retailors. Their current advantage is they can offer trades against MSRP. This will fade if and as the secondary market prices continue to soften.

[Vince M.]

Originally Posted by atxwatch

The state of the watch market will depend on economic fundamentals, not on what CPO will or won't do. Here is my lay opinion:

1) We are about 2/3rds through the current bear market. The last 1/3rd will see another large drop in the markets through the middle of 2023 and that will be the most painful, ending in capitulation.

2) There will be increasing layoffs past the point of capitulation, especially in white collar/tech.

3) Consumers will stop spending even more as asset prices structurally deflate due to rising interest rates and pressure on jobs and wages, leading to a pullback in the wealth effect.

4) Crypto may continue to slide as more malfeasance comes to light.

5) The watch market was overhyped for 1-2 years and watches became an alternative asset. With flipping dying, the "institutional" or flipper money has left the chat, reducing demand and putting downward pressure on prices as availability increases.

6) If the economy worsens, more watches will be offloaded in the secondary market, putting even more pressure on watch prices.

None of these points above make me think that it is likely the watch market as a whole will do extremely well for the next year or two.

WHat you think happens will depend on how you read the tea leaves concerning the overall economy for the next 12-24 months.

The realistic view.

I think you can also exchange Rolex for house/car/hermes bags/etc/etc and it will be the same.

[Vince_76]

Originally Posted by Calatrava r

My reaction entirely when I heard of the new program. Remember, ADs still have to go out and compete for use pieces against the traditional used market retailors. Their current advantage is they can offer trades against MSRP. This will fade if and as the secondary market prices continue to soften.

+1

Regarding the watch market - let's put it this way... if there was a tradeable instrument to short the market, I'd have a sizeable position.

[RavenousHomer]

Originally Posted by wjv4200

Tourneau has been selling used rolexes for as long as I can remember. I don’t understand what all the fuss is about, this is not a new idea.

Exactly. What I'm wondering is if Rolex is mandating that all its ADs who operate (or plan to operate) in the secondary market for Rolexes are REQUIRED to use the RCPO authentication service for any used Rolex it buys/sells. It's the ADs taking the balance sheet risk and tying up their working capital, not Rolex. Rolex would simply be earning a fee for their RCPO certification service with no downside risk

[enjoythemusic]

Originally Posted by Vince_76

+1

Regarding the watch market - let's put it this way... if there was a tradeable instrument to short the market, I'd have a sizeable position.

You can short

Richemont OTCMKTS: CFRUY

Swatch OTCMKTS: SWGAY

Etc, etc.

[vh2k]

Originally Posted by Madison1

In the last two days I have read the following headlines:

Chrono24 to cut 40% of staff as watch prices slump

No such headline exists. You either made it up or didn’t read carefully enough.

[szabo_martin]

Originally Posted by atxwatch

The state of the watch market will depend on economic fundamentals, not on what CPO will or won't do. Here is my lay opinion:

1) We are about 2/3rds through the current bear market. The last 1/3rd will see another large drop in the markets through the middle of 2023 and that will be the most painful, ending in capitulation.

2) There will be increasing layoffs past the point of capitulation, especially in white collar/tech.

3) Consumers will stop spending even more as asset prices structurally deflate due to rising interest rates and pressure on jobs and wages, leading to a pullback in the wealth effect.

4) Crypto may continue to slide as more malfeasance comes to light.

5) The watch market was overhyped for 1-2 years and watches became an alternative asset. With flipping dying, the "institutional" or flipper money has left the chat, reducing demand and putting downward pressure on prices as availability increases.

6) If the economy worsens, more watches will be offloaded in the secondary market, putting even more pressure on watch prices.

None of these points above make me think that it is likely the watch market as a whole will do extremely well for the next year or two.

WHat you think happens will depend on how you read the tea leaves concerning the overall economy for the next 12-24 months.

I agree with all of this except that we are 2/3 in... I feel we are at the first phase still of curbing consumerism with the interest rates. I think the majority of lay offs will be next year which is when foreclosures and repossessions will occur. The lockdowns in China are inevitably throwing a wrench into it as well. I think people got used to cheap money and increasing property values. I'd be curious how many people in major metropolitan centers are leveraged against their properties.

[Chewbacca]

I just hired 57 people from chrono24 to sell my 73 b&p Rolexeses.

The market works itself out.

[LndLord]

It’s so hard to tell. I feel like there is an agenda out there

[RyanJ]

There is ALWAYS an agenda.

The economy is also neither bad or good for the world as a whole. It all depends on who you are and how much money you have.

Some see disaster but some see the world on sale.

[Chadridv]

all prices are coming down, whether its next week or in 5 months. It's happening, and indications started long before we are actually seeing the prices come down.

I sold and/or traded a bunch of watches within the past 6 months for various reasons. 1 major reason was to fund the purchase of my Newman Daytona on OF. That's irrelevant though, just mentioning it.

Anyway, I sold an Ex2 226570, perfect condition. Was very difficult to move at a reasonable price point.

Another watch I sold was a 116500 white, a couple years old, excellent and complete. Without even talking numbers I only had 2 dealers out of 6 actually express interest in buying it.

Same thing with a Patek 5167. Same condition as the Daytona. I had several dealers say they weren't interested at all.

These aren't traditionally slow moving watches.

This was about 4-5 months ago. I can't imagine their demand for these models has increased. They clearly are all holding way too much stock. It's only a matter of time before the market is filled with "hard to get" pieces and in order to compete the prices will come down.

[Rickkk]

Whenever people think something is going to drop significantly, the opposite usually happens and vice versa. Loads of people said crypto was going to be worth nothing then bitcoin went to 50k. Even now, it’s 14 and I think that’s pretty high.

If you’re offered something like a platinum Daytona at rrp with people suggesting it’s discontinuation, I wouldn’t turn it down…