Impact of Covid on AP

[Benzsiam]

Increase twice a year, sound too much for me especially when the economy is in bad shape.

I have 7 Rolex, 2 AP, it should be plenty for me now.

[macrowatch]

Originally Posted by Benzsiam

Increase twice a year, sound too much for me especially when the economy is in bad shape.

I have 7 Rolex, 2 AP, it should be plenty for me now.

Hope they don’t price themselves out trying to capture all of the value creation or bubble pricing (not sure which one it is TBH) and end up pulling a Panerai brand oopsie.

[Reign]

Originally Posted by Benzsiam

Increase twice a year, sound too much for me especially when the economy is in bad shape.

I have 7 Rolex, 2 AP, it should be plenty for me now.

My guess is demand hasn’t changed much while supply has and so this is just a way to recalibrate that.

From historical interviews with Francois, it looks like they target 1.1x ratio for what they think they can sell (ie demand) vs actual supply.

While I certainly feel for small business owners + retail and hospitality sector, for the typical white collar / corporate employee, income has more or less remained unchanged while the lockdown suppressed peoples ability to spend. Compound that with the fact that the stock market is back to where it was before these lockdowns, it has bizarrely not impacted the typical AP buyer (or other popular watch brands)

[RolexZen]

Originally Posted by Caramba

I don't think you have to spend many years in the corporate world to see that senior management sometimes exaggerates the effects of an external crisis, such as COVID-19, to hide their own failures.

Don't ruin a good story by telling the truth.

Well, we’re lucky you joined recently to shed light on the 11:59 fiasco and your business suspicions.

[guanxi]

Originally Posted by RolexZen

Well, we’re lucky you joined recently to shed light on the 11:59 fiasco and your business suspicions.

It’s like COVID 11:59

Sorry too soon!?!

[macrowatch]

Originally Posted by RolexZen

Well, we’re lucky you joined recently to shed light on the 11:59 fiasco and your business suspicions.

That’s such a great line I may have to borrow it though. “Don’t ruin a good story by telling the truth”.

[RolexZen]

Originally Posted by macrowatch

That’s such a great line I may have to borrow it though. “Don’t ruin a good story by telling the truth”.

Sure, it's a great quote, attributed to many famous people in one form or another.

But I don't think I'll rely on a new poster here for the truth. He's building one supposition on another.

[macrowatch]

Originally Posted by guanxi

It’s like COVID 11:59

Sorry too soon!?!

Nice...

Probably not too soon in APAC. Maybe too soon for North America...

For more conspiracy (watch) thinking theories...I'm tempted to say that the AD the NYC will use their now Boutique arm to funnel the hard to get pieces back to their NYC big spenders without the watches actually circulating to new clients in Texas and the mid west. No proof, no facts, just pure internet speculation.

[dauster]

Originally Posted by macrowatch

Nice...

Probably not too soon in APAC. Maybe too soon for North America...

For more conspiracy (watch) thinking theories...I'm tempted to say that the AD the NYC will use their now Boutique arm to funnel the hard to get pieces back to their NYC big spenders without the watches actually circulating to new clients in Texas and the mid west. No proof, no facts, just pure internet speculation.

Reading all this, I really feel Jordan/ Nike and Adidas are missing out not selling all their shoes directly on StockX or other similar secondary market retailers at double or triple retail...

I really wish I would have known what's going way earlier - such a ridiculous concept especially since this relationship business is mainly BS unless you are a big spender.

[macrowatch]

I always thought, from a pure business sense, one of the statements Microsoft's Nadella said was very profound (or at least my memory attributes it to Nadella, but might have been Gates...but sounds more like Nadella). Anyways, he said as a company, they shouldn't try and capture/monetize all the value they create for a market. Yes, some of it gets lost to unlicensed copies, channel re-sellers, or even under pricing. But they they must focus on increasing value for everyone instead of charging a price that reflects the entire value generation.

Very interesting point of view IMO relative to how the company has performed both in valuation and cash generation.

I find that parallel with Rolex's current market dominance also interesting, so am just a slight bit worried about AP. Either way, I'm just happy to squeeze into the brand before the last big hike!

[chiscott_29]

Originally Posted by dauster

Reading all this, I really feel Jordan/ Nike and Adidas are missing out not selling all their shoes directly on StockX or other similar secondary market retailers at double or triple retail...

I really wish I would have known what's going way earlier - such a ridiculous concept especially since this relationship business is mainly BS unless you are a big spender.

Agreed. I have a bit more patience, but it's running out. It's truly becoming a losing proposition to even attempt to play the "relationship" game with AP.

To know that watches are going out the back door (100% fact that they are), or the only people that have any real chance at anything desirable is a VIP. Well, I may long for the "experience" but the price tag on this approach is becoming much too high.

[NYG1121]

I think they are getting way ahead of themselves. They are a hot brand right now, no question. But these trends come and go. To hike prices esp on the 15450 and 15500 to around 20k USD in such short time is very risky. Time will tell. Pun intended.

[Caramba]

Originally Posted by RolexZen

Sure, it's a great quote, attributed to many famous people in one form or another.

But I don't think I'll rely on a new poster here for the truth. He's building one supposition on another.

Given that AP is a private company, there's no way to really know unless you are on the inside though, is it?

What we do know is that the code 11:59 shares same movement as the RO 15500, and that fact obviously has it's advantages in terms of shifting production towards the models that are in high demand.

I think we can agree that it would make business sense to shift an eventual reduction in production towards models that are less in demand.

[kaiserphoenix]

Originally Posted by dauster

So the boutique in Vegas keeps telling me there is noway I can get any SS Royal Oak (incl Chrono) because production is 30% less and demand is the same? Is that true? Granted my relationship is basically that I bought one watch 6 months ago and I was "promised" a 15500 black dial within a year but now it is looking not that great.

The same goes for car dealerships - they are claiming production stood still and demand is high blahblha - I find that hard to believe given the high unemployment numbers etc

The unemployment is not even. Just look at the S&P etcetc Record highs...High end brands like Rolex, Patek, AP are as strong and in demand as ever as many high earning employees are doing just fine working remote. The hard working people in the lower income bracket liek restaurant/bar staff, tourism sector workers are hardest hit and they were not the clientale that were buying APs in the first place.

[Jayj23]

Talked to a sales at one of the boutiques. They confirmed a price increase next month or so. Can’t believe AP is increasing twice in a year. Wonder whether this increase will also lead to greys increasing price as well...

[AK797]

Originally Posted by benlee

Covid mainly cause economic hardship to the lower income bracket. Apparently, no effect on desirable brands, ie AP/PP/Rolex so far. I have mixed feelings about this. On the plus side, it mever time.ans my "investment" in my watch collection are protected, at least for now. On the minus, it's almost nigh impossible to get another new hot piece.

Regardless, I am quite serene about this. Watches aren't my biggest concern nowadays. These are basically superfluous expenditure.

At the moment we have the worst of both worlds, models are still hard to get altho a few like D500s seem to be popping up more often in incomings, but grey buy prices are terrible as they only want absolute bargains, this will probably be corrected in time but now is not the time to be selling, and maybe not buying either if the sustained economic effects do trickle up to middle/upper middle class buyers and prices do fall back.

[AK797]

Originally Posted by Jayj23

Talked to a sales at one of the boutiques. They confirmed a price increase next month or so. Can’t believe AP is increasing twice in a year. Wonder whether this increase will also lead to greys increasing price as well...

It will, they will hold to the same mentality as before as they want that market to return, but whether buyers will be there at this time is the question for both ADs and Greys, I think alot of buyers even with the cash will be put off by this move at such a time.

[rijowysock]

your boutique is owned by westime, so they are surely giving the pieces to better clients given they have so many stores.. but also, production stopped so they are correct.

[Benzsiam]

A lot of people own both Rolex and AP. If only AP keep raising their price but Rolex still maintain the same price, I think some people will get turn off by the greed of AP, they might just stop buying AP for awhile.

[dauster]

Originally Posted by rijowysock

your boutique is owned by westime, so they are surely giving the pieces to better clients given they have so many stores.. but also, production stopped so they are correct.

I think it's a 50/50 venture between AP and Westime but you are correct I guess. Would it be different if it was owned 100% by AP?

[Animo Felonico]

I assume you are talking about the boutique in Crystals. Being into watches and being blessed with genetic youthfulness, I am used to dismissive AD staff, but that location was worse than the average. I wouldn't shop there, simply for spite, as I wouldn't want the employee to profit off the sale.

[dauster]

Originally Posted by Animo Felonico

I assume you are talking about the boutique in Crystals. Being into watches and being blessed with genetic youthfulness, I am used to dismissive AD staff, but that location was worse than the average. I wouldn't shop there, simply for spite, as I wouldn't want the employee to profit off the sale.

Really? Crystals AP has actually super friendly staff. Whenever I dropped by over the years they been nothing but great. Last time I was there 6 months ago I bought my 1st AP. Other than being a bit disappointed that I probably won't get my 15500 black dial this year I can say nothing bad about them at all. Who did you deal with?

[Reign]

For those that subscribe to NYT:

https://www.nytimes.com/2020/06/10/f...itzerland.html

Key takeaways
- The major groups — Swatch Group, Richemont, LVMH — and the top-end brands like Rolex, Patek Philippe and Audemars Piguet have very solid financing,” Mr. Weber wrote in an email. “The larger players will become even more important, whereas the smaller brands will have more problems — not just financing, but also distribution.
- AP restarted on 11 May, only operating at 80% capacity
- “We hope to get back to 100 right after vacation, by the end of August,” said Audemars Piguet’s chief executive, François-Henry Bennahmias

[Reign]

Originally Posted by dauster

I think it's a 50/50 venture between AP and Westime but you are correct I guess. Would it be different if it was owned 100% by AP?

Yes because if it's partially owned by Westime, if you're a big PP/Rolex/[insert brand] shopper there, they can allocate good APs to those clients without climbing the AP ladder whereas at a corporate owned boutique (NYC, Bal Harbour), it's entirely based on spend at AP.

It goes both ways though, if you focus on Westime owned boutiques, you can leverage that into pieces across their brand portfolio. So depending on what your brand objectives are, one is definitely better than the other

[dauster]

Originally Posted by Reign

Yes because if it's partially owned by Westime, if you're a big PP/Rolex/[insert brand] shopper there, they can allocate good APs to those clients without climbing the AP ladder whereas at a corporate owned boutique (NYC, Bal Harbour), it's entirely based on spend at AP.

It goes both ways though, if you focus on Westime owned boutiques, you can leverage that into pieces across their brand portfolio. So depending on what your brand objectives are, one is definitely better than the other

Interesting thanks. Good to know.

Edit: Just went on their website and it seems they have RM but no PP and Rolex.

[Reign]

Originally Posted by dauster

Interesting thanks. Good to know.

Edit: Just went on their website and it seems they have RM but no PP and Rolex.

the concept still applies in terms of the trade off when buying from a partnered boutique - with their portfolio of brands - or corporate owned boutique

In the US the partnered boutiques are Beverly Hills (Westime), Vegas (Westime), Manhasset (London Jewelers), East Hampton (Material Good), Miami (Westime) and Atlanta (Watches of Switzerland)

Only NYC (on 57th Ave) and Bal Harbour are entirely corporate owned

Worth seeing which of those partners have other brands that you want and try and build a relationship there if you go down that path


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[phow]

I’m currently on the hunt for (2) AP’s at the moment. I’ve reached out to most of the partnered boutiques and received zero response or follow up.

NYC responded within 24 hours. I already have an established relationship with an AD for other brands but they don’t have access to AP. So I plan to work with AP NYC moving forward. I’m looking forward to building the relationship with them.

[dauster]

Originally Posted by phow

I’m currently on the hunt for (2) AP’s at the moment. I’ve reached out to most of the partnered boutiques and received zero response or follow up.

NYC responded within 24 hours. I already have an established relationship with an AD for other brands but they don’t have access to AP. So I plan to work with AP NYC moving forward. I’m looking forward to building the relationship with them.

On that note did they make changes to the NYC AP team? There were many here that had horrible experiences with the NYC AP store especially the manager I believe.

[Collector2019]

Originally Posted by dauster

On that note did they make changes to the NYC AP team? There were many here that had horrible experiences with the NYC AP store especially the manager I believe.

Yes they did and the new team getting positive feedback - as I read on the forums


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[macrowatch]

Originally Posted by Collector2019

Yes they did and the new team getting positive feedback - as I read on the forums


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When approximately did that happen?