How Safe Are AD Deposits?

[golfgrouch]

There are some ADs requiring deposits to reserve timepieces during the COVID-19 shutdown. However, with the combination of a severe supply constraint, a demand drop, and government mandated business operation restrictions, it stands to reason that there is elevated solvency risk for ADs. So the question is, how safe are deposits at ADs?

Would you feel comfortable placing a deposit now at an AD?

For the lawyers out there: Is there any recourse?

[illiguy]

Caveat emptor. If that’s state of play, you have to decide how comfortable you are from a risk perspective.

[Brew]

I think such deposits would be considered or treated as unsecured loans in the context of a bankruptcy. They are completely at risk and would be last on line when pennies on the dollar are handed out to creditors by the court.

[locutus49]

This IMO.

Originally Posted by Brew

I think such deposits would be considered or treated as unsecured loans in the context of a bankruptcy. They are completely at risk and would be last on line when pennies on the dollar are handed out to creditors by the court.

[msdtra]

I would be comfortable on small deposit 5% but nothing higher and review the AD business history etc. (How long business, Number of stores, etc). But, still no guarantees.

[sgarrity]

In this business climate??? 100% NO!

[mfserge]

If they have the watch on hand and want the deposit to hold it until they’re reopened and able to ship.....then I may **consider** a deposit.

If they want a deposit for a watch that they may receive at some future date then NO WAY!

[piratfisk]

I would not put money down on a deposit at this point in time. Whatever watch you want or have been promised will certainly exist "post-COVID." I would revisit the topic then. Who knows, you might need that deposit money now for your family, rather than have it sit in an AD's vault.

Originally Posted by mfserge

If they have the watch on hand and want the deposit to hold it until they’re reopened and able to ship.....then I may **consider** a deposit.

If they want a deposit for a watch that they may receive at some future date then NO WAY!

I completely agree. Well said.

[watchmework]

0% chance I’m giving any AD my cash without the merchandise in return...especially not right now. Try telling them you’ll give them a deposit as long as they sign a contract drafted by your lawyer, see what they say...think you’ll have your answer then.

[SimpleMan91]

If they take Amex why not


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[Recondope]

In most circumstances I would not mind placing a deposit down but given the current climate I would have too many reservations to feel comfortable with that.

[fsprow]

If they have a serial number and provide a bill of sale to you stating that they are holding your property for you, I would. Otherwise not.

[Mr. Miami]

At this very minute I would not feel comfortable until I start my first day of work at the bank I got a job at. Graduating in 4 weeks and start June 1st. We shall see what happens.

[Langnam]

Deposit is only as secure as the AD itself.

Just before the Great Recession began, I had a deposit down with an AD for a Lange for my wife. I kept getting the runaround from the store on why the watch wasn’t in, etc. Finally, I called Lange NY and they had no record of my order ever placed.

Went back to the AD and demanded my deposit back to no avail. The best they would do was a credit towards another watch. I wasn’t going to lose a $9500 deposit, so I bought a JLC.

Within 2 months the whole chain went belly up and whatever inventory remained was sent to a liquidator to pay off creditors.

Rolex and Lange were the big losers.

No deposit ever again for me.


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[Calatrava r]

I am surprised any AD wants deposits right now. Hard to know how things will operate for a while once stores re-open. I would pass on a deposit.

[LigerBelair]

Originally Posted by golfgrouch

There are some ADs requiring deposits to reserve timepieces during the COVID-19 shutdown. Would you feel comfortable placing a deposit now at an AD?

Absolutely not.

[cocoabutter]

Originally Posted by Langnam

Deposit is only as secure as the AD itself.

Just before the Great Recession began, I had a deposit down with an AD for a Lange for my wife. I kept getting the runaround from the store on why the watch wasn’t in, etc. Finally, I called Lange NY and they had no record of my order ever placed.

Went back to the AD and demanded my deposit back to no avail. The best they would do was a credit towards another watch. I wasn’t going to lose a $9500 deposit, so I bought a JLC.

Within 2 months the whole chain went belly up and whatever inventory remained was sent to a liquidator to pay off creditors.

Rolex and Lange were the big losers.

No deposit ever again for me.


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This story got me thinking especially about the big losers. Based on that, this is much worse than 2008, so what is Rolex going to do with AD’s on the edge? If I were Rolex, I would send those AD’s hot models which they would pay for upfront / pro forma and they would be able to sell quickly to keep afloat. Maybe I am overthinking it, but I would hate to read about smaller AD’s going to the wall and taking customers watches in for repair and deposits with them.

[Roddypeepa]

ADs as a rule have hardly acted with good grace, humour and integrity (in a lot of cases) since the Rolex frenzy with countless desirable pieces going out the back door rather than to genuine fans. Play it cool and the worm will turn sooner rather than later and not before time. I would 100 per cent not give a deposit in these times. If they’ve got the watch they can ship it. If they won’t ship what does that say?


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[101031-28]

I most definitely would not!

[JRique]

Originally Posted by golfgrouch

There are some ADs requiring deposits to reserve timepieces during the COVID-19 shutdown. However, with the combination of a severe supply constraint, a demand drop, and government mandated business operation restrictions, it stands to reason that there is elevated solvency risk for ADs. So the question is, how safe are deposits at ADs?

Would you feel comfortable placing a deposit now at an AD?

For the lawyers out there: Is there any recourse?

No way, if they already has the piece in stock you can arrange a way to picking it up or have it shipped, but otherwise no.

[Little machines]

During these times I wouldn’t!

[lamnyc]

You might as well just throw your cash out the window.

[Podmornica]

The situation is unclear at the moment. We need to wait until the C19 is over. My thoughts are that the demand for Rolex won't be resumed from where it was before the February of 2020. The watches will keep coming with not enough buyers to collect them. This will lead to very short delivery times for BLRO/BLNR, unless Rolex start playing hard to get with artificial supply, though I believe they will cash out the scarcity image and just deliver as much of those professional pieces as they can.

[VegasMilgauss]

I have paid deposits before but not a chance would I now for obvious reasons.

[Harry-57]

I have left relatively small deposits with my AD down the years and a sizeable deposit on one occasion. Since the shutdown, I would not pump front money into any retail business. Doesn't matter how much I like them and/or trust them. It's just too risky.

I hope my AD survives. I expect they will. But some businesses are going to fail. And once the business has gone, so has your money. Sure, you can attempt to recover it. And you might succeed in doing so. Or you might not.

[ap1]

Pass

[SlideRacker]

I’d rather take my chances on a cruise ship.

[mfserge]

Originally Posted by SlideRacker

I’d rather take my chances on a cruise ship.

[RX0]

Putting a deposit down requires a lot of trust. I always put 50% deposit with my AD and my AD had been in business for 3 generations. All the pieces had been delivered and never fail me.

If my AD tell me that they can get me a Patek 5726 or a blue dial skydweller again, I will put the deposit immediately even right now.

[pickettt]

I feel like I'm gambling when I leave my shirts at the cleaners lately.