Rolex during the Depression

[INXTCY]

What happened to Rolex during the Depression of 1930s? And if history were to repeat itself, what would happen to Rolex & its watches?

[generic0]

Not answering your question directly at all, but I think I was reading a current (or maybe 1 mo. old) issue of Watch Time or another magazine and there was a pretty fascinating article on how Audemars Piguet handled the depression. It sounded pretty tough...they basically kept laying off more and more people til they only had 2 owners + several watchmakers/repairpeople in a small shop. Times were tough for years after the early '30s also...didn't recover til post-WWII I think.

It was a different world back then, though...there were no quartz watches, companies weren't so big, didn't have Swatch group/Richemont group, etc...I think Rolex makes so many millions of watches that they will survive this current downturn, albeit with some red ink and possibly downsizing involved.

Also was reading about how watch servicing is a loss-leader for these companies? I was kind of surprised. People are worried about Panerai because it's a young company that might have a bunch of watches breaking down in the next few years, right when they might be having trouble selling lots of new ones?

[GerardoG]

My 2 cents: Things have changed a lot in 70/80 years and, even when we are told we are under the worst economic scenario since 1930's, this is a different world. China's economy is having solid numbers already (watch our for a potential new economic leader); so watch groups/companies will have to forget about the diamond encrusted new models (ie Leopard, 'Stingray', etc) and go back to basics; what people like and can afford. Price reduction? I would say no, that would kill them, but re-organization and re-inventing the core line of business will be the way to go.

...after all, every time through history, the BEST economic times come right after a crisis; so boys and girls, just hang in there, things will be much much better in a few months.

[BigHat]

Another interesting comparison would be during the Swiss mechanical watch "depression" of the quartz era.

Too many changes in the world since the 30's to draw any meaningful conclusions from events then, not even remotely the same company.

[casadecamporolex]

Originally Posted by GerardoG

China's economy is having solid numbers already.

One of my best friends has a shipping container business in Shenzen China and he says it is almost catastrophic what is happening in China with the economy right now. Not only is the manufacturing business horrible, but the Chinese are heavily invested in the US which is not a good place to be.
There is no luxury business anywhere in the world right now that is good.

[GerardoG]

At least according to world marketing information provided last week (I am looking for the document online). We commented after reading it that it looks like they are promoting 'internal purchasing' so money is moving around; I agree that luxury goods are slow but on street level things might be different. We always have to double guess the authenticity of the information, but it sounds logic: you have the people, they have the money, if they decide to buy 'local', things start moving internally.

[moby33]

Originally Posted by GerardoG

...after all, every time through history, the BEST economic times come right after a crisis; so boys and girls, just hang in there, things will be much much better in a few months.

Ha, ha...that's definitely laughable. While I agree times will undoubtedly get better down the road, "a few months" is WAY too optimistic IMO. '09 is going to be painful and best case we see some signs of hitting a bottom by the end of this year. I wish this mess could be turned around in a few months, but I think it's probably a lot more realistic to say a few years vice a few months before things are truly better. Cheers.

[casadecamporolex]

Originally Posted by moby33

Ha, ha...that's definitely laughable. While I agree times will undoubtedly get better down the road, "a few months" is WAY too optimistic IMO. '09 is going to be painful and best case we see some signs of hitting a bottom by the end of this year. I wish this mess could be turned around in a few months, but I think it's probably a lot more realistic to say a few years vice a few months before things are truly better. Cheers.

Agreed; as an older guy who has seen many cycles of economic tides, I have never seen anything like what exists right now. With so much uncertainty, plus lack of financing for even the best credit risks, there will be trouble for a long, long time.
It might be 18 months before we are back to our current state. As they commonly say, "Things are going to get worse before they get better."

[STEELINOX]

Originally Posted by GerardoG

will have to forget about the diamond encrusted new models (ie Leopard, 'Stingray', etc) and go back to basics; what people like and can afford. Price reduction? I would say no, that would kill them, but re-organization and re-inventing the core line of business will be the way to go.

Its a sure thing that we will very likely see a large "showing" of OYSTERs this Basel, in every model, Supercased E1 E2, SUBMARINER in every config (date - no date) even 41mm DateJusts, and even a White dialed "PAN AM" GMT or other GMT variant, wouldn't be a surprise, MARK MY WORDS; "its their 'only hope' " (STAR WARS); as they've not counted on this economy downturn, so they've got to get their "bread n butter" line reinforced for the rough ride thats already in progress...
Thanks,
Randy

[FlyingMoose]

Originally Posted by casadecamporolex

Agreed; as an older guy who has seen many cycles of economic tides, I have never seen anything like what exists right now. With so much uncertainty, plus lack of financing for even the best credit risks, there will be trouble for a long, long time.
It might be 18 months before we are back to our current state. As they commonly say, "Things are going to get worse before they get better."

I think 18 months is very optimistic, I'll be surprised if the markets make a new high in the next 5 years...

[waltk1026]

Originally Posted by casadecamporolex

Agreed; as an older guy who has seen many cycles of economic tides, I have never seen anything like what exists right now. With so much uncertainty, plus lack of financing for even the best credit risks, there will be trouble for a long, long time.
It might be 18 months before we are back to our current state. As they commonly say, "Things are going to get worse before they get better."

As an older guy also we never seen things this bad, it takes 1st prize. 18 months or maybe a little sooner may show a little sign of things doing better but I bet it will take at least 3 years and even then things won't be the same.

[gmh1013]

Originally Posted by GerardoG

My 2 cents: Things have changed a lot in 70/80 years and, even when we are told we are under the worst economic scenario since 1930's, this is a different world. China's economy is having solid numbers already (watch our for a potential new economic leader); so watch groups/companies will have to forget about the diamond encrusted new models (ie Leopard, 'Stingray', etc) and go back to basics; what people like and can afford. Price reduction? I would say no, that would kill them, but re-organization and re-inventing the core line of business will be the way to go.

...after all, every time through history, the BEST economic times come right after a crisis; so boys and girls, just hang in there, things will be much much better in a few months.

Im glad to see you are optomistic in saying months....I was thinking in years
3-4

[gmh1013]

Originally Posted by casadecamporolex

Agreed; as an older guy who has seen many cycles of economic tides, I have never seen anything like what exists right now. With so much uncertainty, plus lack of financing for even the best credit risks, there will be trouble for a long, long time.
It might be 18 months before we are back to our current state. As they commonly say, "Things are going to get worse before they get better."

Its the beginning to the end

[FlyingMoose]

If you look into the long-term history of the market, it tends to be 20 years up, 15 years flat, and we seem to be about 10 years into the 15 (starting at the dot-com crash). So my guess would be that it'll be recovered in about 5 years, and start going up from there.

[Dhiney]

These are hard times but I remember the Jimmy Carter years with 23% interest rates and long gas lines and rationing of gas. It was hard then as now. if we can get out of this mess in 18-24 months we would be lucky.

[moby33]

Originally Posted by Dhiney

These are hard times but I remember the Jimmy Carter years with 23% interest rates and long gas lines and rationing of gas. It was hard then as now. if we can get out of this mess in 18-24 months we would be lucky.

I'm too young (32) to remember first hand the Carter years...Reagan was the first Pres I can really remember listening to as a child. But, I fear there are some scary economic parallels to his last few years in office and what we're going through now. While history is a good barometer to try and figure out what the best approach may be to move forward, history also shows that nobody can predict w/ absolute certainty how this will eventually play out and how long it will take...scary times indeed!

You also don't hear much talk about out-of-control inflation coming around the corner, but I fear that is something that is slowly building behind the curtain nobody wants to pull back & that too is going to be one hell of a knockout when it sets in. I hope I'm wrong. Yikes!

[Trainer]

Originally Posted by moby33

I'm too young (32) to remember first hand the Carter years...Reagan was the first Pres I can really remember listening to as a child. But, I fear there are some scary economic parallels to his last few years in office and what we're going through now. While history is a good barometer to try and figure out what the best approach may be to move forward, history also shows that nobody can predict w/ absolute certainty how this will eventually play out and how long it will take...scary times indeed!

You also don't hear much talk about out-of-control inflation coming around the corner, but I fear that is something that is slowly building behind the curtain nobody wants to pull back & that too is going to be one hell of a knockout when it sets in. I hope I'm wrong. Yikes!

I would think that inflation is the logical next step, (albeit may be awhile) considering all of the "money" that is being pumped into the system.

Tempus Fugit,
Trainer

[madrin]

I'm actually a big fan of the "O"conomy. Buy stuff cheap...as long as you can afford it. Watch inflation soar, which is neato if you did the logical thing and have a fixed rate, and buy mcmansions from banks who loaned money based on mcsalaries....and then rent them back out( I have 3 of those right now). The spending bill isn't going to help anyone, watch buyers included, except those who understand the universal rule that cash is king...always...

-JC

[INXTCY]

Originally Posted by FlyingMoose

If you look into the long-term history of the market, it tends to be 20 years up, 15 years flat, and we seem to be about 10 years into the 15 (starting at the dot-com crash). So my guess would be that it'll be recovered in about 5 years, and start going up from there.

just exactly what they have been talking about.....economy won't recover until they fix housing problem(s). here's the big catch: compare this housing bubble to the dot com bubble. at the peak nasdaq was around 4500-5000? when it burst, it never recovered back to its highest point. and that was 10 years ago. same thing with housing when everything was soooo inflated, prices were just ridiculously high. what happened when the bubble popped???? everybody started to walk away, thus creating more bigger problems that will hinder or prevent the recovery.

[topcat30093]

Generic
I read the same article as you.
It stated that things were so bad.
That AP only sold TWO watches in the whole of 1932!!!!!!!!!!!!!!!!

[AJF]

Originally Posted by INXTCY

What happened to Rolex during the Depression of 1930s? And if history were to repeat itself, what would happen to Rolex & its watches?

In the next 24 months, they will find out at first hand what it is like to be in a depression.

AJF

[STEELINOX]

Originally Posted by FlyingMoose

If you look into the long-term history of the market, it tends to be 20 years up, 15 years flat, and we seem to be about 10 years into the 15 (starting at the dot-com crash). So my guess would be that it'll be recovered in about 5 years, and start going up from there.

5 ya say; more like another 15

Originally Posted by topcat30093

Generic
I read the same article as you.
It stated that things were so bad.
That AP only sold TWO watches in the whole of 1932!!!!!!!!!!!!!!!!

its not unimaginable except this time around the system will get flooded cause ADs and every grey guy in tights will be selling em like candy by this coming September just to put food on the table - EEYowee !

[STEELINOX]

Originally Posted by AJF

In the next 24 months, they will find out at first hand what it is like to be in a depression.

AJF

i am afraid you're right !