Rumor? Rolex ending partnerships with hundreds of ADs, focusing on boutiques

[Harry-57]

What's a fair system? Come to that, what's a reasonable wait time?

[Bartolo]

There is a lot of wackiness in this thread.

"Rolex Boutique" does NOT mean that Rolex owns it.

What it does mean is that Rolex is pushing their ADs to open single-brand boutiques where the product is displayed as Rolex want. So for example this is precisely what happened in Boston. Long's Jewelers opened and runs the Rolex Boutique on Newbury Street. Single-brand storefront, with the interior designed precisely as Rolex want. Rolex doesn't own this; Long's does.

Will Long's be required to go to this model in their other locations that currently display and sell Rolex within a traditional "jewelry store" retail setting?? I don't know. Maybe.

But it's pure silliness in 2024 to think that Rolex itself will finance and open and manage hundreds of retail locations throughout the US. I'll be happy to eat these words if I'm wrong, but nothing in the fine wristwatch business has proven this to be a desirable model. Even AP, with VERY few boutiques, don't own all their boutiques! Many are at least co-owned; here in Boston with Material Good. Same with RM.

Manufactures dictating the physical layout of independently-owned retail locations is NOTHING new. And it's been done in the auto industry for decades. Why do we see BMW dealerships doing extensive interior and exterior renovations? Because to keep their franchise, they must. BMW dictates what a dealership should look like.

[Calatrava r]

I think the trend of Rolex phasing out the smaller ADs is pretty obvious. I don't think they can go totally inhouse on sales, anytime soon, as they sell so many watches. But it would appear that is their long-term goal. The secondary markets will be unaffected by all this because the bulk of their inventory comes from retail buyers who sell their purchases relatively soon after purchase. The fickle customer will always be there. If the world market for luxury goods softens as some predict it is doing, secondary market prices will fall further as more and more owners will sell into it(increasing supply there) to save and re-coup their money spent at ADs for the watches.

Consolidation by Rolex is a big mistake, as it ultimately lessens their core buyers, who are people who just want one watch for life or a gift to someone for a special occasion. If those folks cannot buy somewhat easily, they will buy something else.

[Dave O]

Originally Posted by Calatrava r

I think the trend of Rolex phasing out the smaller ADs is pretty obvious. I don't think they can go totally inhouse on sales, anytime soon, as they sell so many watches. But it would appear that is their long-term goal. The secondary markets will be unaffected by all this because the bulk of their inventory comes from retail buyers who sell their purchases relatively soon after purchase. The fickle customer will always be there. If the world market for luxury goods softens as some predict it is doing, secondary market prices will fall further as more and more owners will sell into it(increasing supply there) to save and re-coup their money spent at ADs for the watches.

Consolidation by Rolex is a big mistake, as it ultimately lessens their core buyers, who are people who just want one watch for life or a gift to someone for a special occasion. If those folks cannot buy somewhat easily, they will buy something else.

Why would you think this in bold above? There is nothing out there that indicates this. Yes, they bought Bucherer. But in the overall scheme of things, this is small potatoes as Bucherer only makes up 2.5% of the AD network. Are they getting rid of some AD's? Yes, but these are the ones that are either not following Rolex's guidelines or are unwilling to spend over 7 figures to build out their store the way Rolex requires you to to remain a Rolex AD. And for Rolex to build their own AD network just makes no sense.

I truly believe that Rolex wants to maintain that special experience one has when purchasing a Rolex. Those AD's that don't will be gone. Cutting the AD network won't help the buying experience either. And with production ramping up soon drastically reducing the AD network is also a move in the wrong direction.

If you haven't watched this video I highly recommend you do. Great take on the whole situation.
https://m.youtube.com/watch?si=Wm2-v...ature=youtu.be

[Fleetlord]

Originally Posted by Jack T

Rolex clearly has been reducing their distribution outlets and and creating a more exclusive image

And yet they seem to be producing and selling over 1 million watches a year

I don’t quite understand how they can so both.

They will sell MORE watches, with less effort, through consolidation into large key accounts than dealing with individual independent dealers scattered about all over the place.

[Ursusarctos]

From a business perspective, why would one of the top brands in the world allow their goods to be sold without their control? The simple answer would be for profit. Rolex, however, is beyond the normal realm of profitable given they don't have shareholders to report to. They can do what they want. The trend for upscale products has been to shift to branded stand alone stores only. Rolex is looking for a path ahead (10-30 years) and having more control makes sense: it's all about branding. They can control the grey market / backdoor sales, CPO, and prices (e.g., discounts or not). It makes sense. Here in Alberta, we lost a small Rolex dealer recently in a city of ca. 63,000 people. I suspect Rolex figured they didn't need that location and the sales would be picked up elsewhere. Of the remaining 4 stores here in Alberta, 2 are independent and 2 are associated with a national chain of jewelry. For a population of 4.3 million in Alberta, one Rolex owned store would likely suffice. I'd guess it would go to Calgary and everyone who wanted a Rolex would head there. It would consolidate their operation and I would bet there would be no drop in demand.

[mobster600]

Rolex is moving away from jewelry store owner relationship selling and moving into a Rolex owned/operated corporate non-relationship selling strategy.

Rolex doesnt want relationships controlling allocations. Relationships can get personal and create conflicts of interest between the customers, SA, and the Store owner. Customers can be pressured into buying profitable items to get higher priority in the allocation process. SA may feel obligated to offer jewelry to cross sell products offered in the AD. All frowned upon but we can all attest its happened to us.

If the Store owner now becomes Rolex (Bucherer Acquisition). The SA relationship is more focused on Rolex's initiatives and goals, rather then their own. The customer will get a better experience and the SA wont feel pressure to meet quota's or obligations to keep their job from the Store Owner.

This will improve Rolex's brand image and mitigate and/or avoid conflicts of interest. I believe Rolex made the right decision. Unfortunately many AD's will close as a result and/or layoff employees as a result. In the long run, I think it is the right thing to do.

[Mr Ben]

Originally Posted by Krash

If I’m in charge of Rolex, what would the incentive be for me to spend billions on new boutiques?

I sell every watch I make. I don’t have stockpiles of inventory that I can’t sell.

What problem am I solving?


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It’s not a problem as such - but Rolex’s estimated annual sales are in the ballpark of $10bn so that is several billion dollars going to AD’s. Would selling through Bucherer not just keep billions of dollars extra in the group?

Having said that, I agree with those that have thought about the numbers - the big players like WoS will be retained because they shift far too many watches and are happy to invest in Rolex only boutiques etc. Rolex would need to multiply the Bucherer store numbers tenfold at least to even think about taking all this in house.

[CarlOver]

I know of a small jewelry store that is located in a strip mall. They bought the unit next door and built out a large Rolex section. The had a very small Rolex section prior to this. Seems interesting that this was done in the past 2 years but it’s likely due to their location. If Rolex was to pull this AD, this jeweler would be in a huge financial mess. ALS has been reducing AD and going boutique route and managing the end sale was the reasoning. They want to ensure that their watches do not end up on the gray market. Time will tell how this all pans out for the current current ADs.

[superpop]

I remember 15 years ago or so GM forced all of their Chevy dealers to build custom showrooms for the Hummer brand. Giant "H" shaped facades that looked very cool and expensive. 5 years later and Hummer was in the toilet as trends changed in the SUV market. Dealers were stuck with the stores. Hope the same thing does not happen here. Doubling output, and forcing dealers to invest in multi million dollar buildings could be the downfall of the brand. The hype is already dying down despite the best efforts of the AD's and Rolex and you throw another million watches into the mix and I am not so sure it is exclusive any more. Most of the US is now embracing more stealth wealth and a the flash is fading. Hope they do not turn into another Breitling or Panerai.

[dandy]

Wasnt this old news?

[WRjr]

Hope so, Rolex should move on from mom and pop, too many characters and opportunists in the jewelry business.

[NigeG]

Originally Posted by L8r

Hope they don't dump Watches of Switzerland. It's all we have out here in the sticks.

I hope they do. Bunch of shysters


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[alphadweller]

If Rolex goes boutique only, it'll be like Porsche or Ferrari. In order to get the hot models, you'll have to buy several other models first. Not sure it's a better solution for the end buyer.

[jb335]

There isn’t a single Bucherer/Tourneau in Los Angeles that sells new Rolex. I have a hard time believing Rolex is going to cut the many very high-end
Rolex boutiques in LA and open a bunch of store that don’t currently exist in the second biggest market in the USA.


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[NigeG]

Originally Posted by Bartolo

There is a lot of wackiness in this thread.

"Rolex Boutique" does NOT mean that Rolex owns it.

What it does mean is that Rolex is pushing their ADs to open single-brand boutiques where the product is displayed as Rolex want. So for example this is precisely what happened in Boston. Long's Jewelers opened and runs the Rolex Boutique on Newbury Street. Single-brand storefront, with the interior designed precisely as Rolex want. Rolex doesn't own this; Long's does.

Will Long's be required to go to this model in their other locations that currently display and sell Rolex within a traditional "jewelry store" retail setting?? I don't know. Maybe.

But it's pure silliness in 2024 to think that Rolex itself will finance and open and manage hundreds of retail locations throughout the US. I'll be happy to eat these words if I'm wrong, but nothing in the fine wristwatch business has proven this to be a desirable model. Even AP, with VERY few boutiques, don't own all their boutiques! Many are at least co-owned; here in Boston with Material Good. Same with RM.

Manufactures dictating the physical layout of independently-owned retail locations is NOTHING new. And it's been done in the auto industry for decades. Why do we see BMW dealerships doing extensive interior and exterior renovations? Because to keep their franchise, they must. BMW dictates what a dealership should look like.

Finally a bit of sense in the thread. A Rolex Boutique (or Solus store to be more accurate) in some circumstances may be owned and operated by the brand. In most cases it will be owned and operated by either a large, possibly multi national company (WoS for example), or could be family owned if they have the money to do it.

In the UK we already see it happening more and more. Independents have been told to dedicate more space or else. Some have and more will fall by the wayside. WoS, Goldsmiths, Mappin & Webb - all part of WoS Group if you didn’t already know. Have either started with Boutiques or have dedicated significantly more space.

My local Goldsmiths has approximately 40% of its floor space in one store given over to Rolex. I would expect that soon they’ll be told to open a dedicated store where you have to physically “leave the shop” in order to get to the other brands they sell. In truth I’m surprised that this hasn’t happened already as Goldsmiths operates Tag Heuer, Breitling and Omega boutiques within 50yards of the Rolex part of their Goldsmiths store.

Personally I don’t see any tangible benefit as a consumer. They’ll still be looking at purchase history to look to allocate product. From a corporate identity point of view maybe you will see a Certified Pre Owned section appearing inside the boutique. Currently I have only seen these in the non Rolex areas of a shop. The other AD local to me is family owned and they said Rolex are pushing them hard to be involved in a certified pre owned programme.

I would anticipate that Bucherer will continue to operate as is with full accountability to Rolex. So it will stand on its own feet and continue as before with maybe some subtle changes. From a consumer point of view: it may not appear any different.

I don’t know but I imagine that Rolex operates with a capital finance partner for their trade accounts with their retailer network. Effectively selling the debt to the finance company to “take the risk” with the retailer. Far better for Rolex’s cash flow than dealing direct.


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[watchnwine]

Originally Posted by watchmavan

The evidence supports that AD’s have brought this upon themselves, if it does indeed happen. They have created and fed the grey market for years. No sympathy whatsoever.


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The cars the AD sales people drive that park outside the store reveals what's going on. No tears from me...

[MJ EXPLORER]

Originally Posted by HiDive

Why wouldn't Rolex do this. Omega and Breitling have boutiques where they carry certain models that are not available (at least initially) to regular AD's. Rolex has it's new factories coming online in the next couple of years so they should be increasing their output of watches. I know that the Rolex AD's in my area have all built some very fancy Rolex areas in their stores which are taking a more significant percentage of their floorspace than previously. The Omega and Breitling boutiques That I have bought from in the last couple of years are only for those brands. I don't know if Rolex is doing that?

My thoughts exatly. Also, those Breitling boutiques are pretty slick.

[TomInNJ]

If this AD is losing both Rolex and Cartier at basically the same time, there is something going on that has nothing to do with Rolex and the Bucherer acquisition. The sales associate is obviously savvy enough not to share their dirty laundry, and instead is peddling a story that feeds into pre-conceived notions about Rolex. It’s a cover story.

[HiDive]

Originally Posted by Krash

Omega and Breitling are still sold at authorized dealers.

So how many boutiques do they need and how much will that cost?

Let’s use round numbers and say 300. Let’s assume $5 million up front costs per boutique. That’s $1.5 billion right there. And that doesn’t include ongoing operating costs.

If I put my business hat on, it’s hard for you to convince me they should get rid of the authorized dealer network.


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I am not trying to say that Rolex will have exclusive boutiques but that they could if they want to . They have actually had exclusive boutiques for many years. In NYC they have their own store in the Rolex Building midtown Manhattan. My wife used to go there on business, because she was the Aetna Rep for their company Health insurance. I don't know if they have more in other cities, but my guess is they do. There are a handful of single brand boutiques in Honolulu, but I think they are owned by a private company, Tourneau.

I definitely do not think that any of the brands should get rid of their AD's, I was just trying to make the point that even though Omega and Breitling have regular jewelers as AD's they also have company owned exclusive Boutiques and why shouldn't Rolex have both types of sales outlets as well. Omega and Breitling have certain models that are only offered through these company owned Boutiques but as far as I know Rolex does not do this.

[Dave O]

I've said it twice in this thread already and I'll say it again. Bucherer is NOT taking over sales for Rolex nor will they be able to. And WoS is even smaller than Bucherer, so that's not going to make that much of a difference either to those that think they will take over. Bucherer is a mere 2.5% of the total Rolex AD network. And they aren't everywhere around the globe. Some AD's are closing because they don't want to shell out over 7 figures to remodel their store the way Rolex wants it to be. My AD is currently going through a remodel and will still sell jewelry and other watch brands once the rebuild is complete. Will the AD network shrink as a result of this? Most likely. But not at the scale that some people think it will.

[BlondesNwatches]

Originally Posted by TomInNJ

If this AD is losing both Rolex and Cartier at basically the same time, there is something going on that has nothing to do with Rolex and the Bucherer acquisition. The sales associate is obviously savvy enough not to share their dirty laundry, and instead is peddling a story that feeds into pre-conceived notions about Rolex. It’s a cover story.

Yea it’s def not coincidence. Rolex and Cartier don’t collude on which dealers to drop, at least as far as I can tell. It’d be highly doubtful.

[L_S_SHOE]

As others have mentioned, many ADs are being forced to invest in costly renovations/build outs. If they won’t or can’t do it, they’re done.

I’ve no personal experience with Bucherer, but I always considered Tourneau to be low end with poor customer service. I was surprised when Rolex took an interest.

Personally, I think the damage is done. I want to deal with a large chain retailer even less than I want to deal a Grey dealer.


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[jb335]

Originally Posted by TomInNJ

If this AD is losing both Rolex and Cartier at basically the same time, there is something going on that has nothing to do with Rolex and the Bucherer acquisition. The sales associate is obviously savvy enough not to share their dirty laundry, and instead is peddling a story that feeds into pre-conceived notions about Rolex. It’s a cover story.

I lean towards this explanation.

[Zach69SS]

Yes, Rolex is not getting rid of every AD just some of them, that can’t do the new build outs and where they have some of the bigger ADs in the area. The AD I know that lost Rolex was an AD for over 30 years but small and the owner is not a young man anymore and decided not to make the investment. The return was not worth it to him.

Bucherer, will not be the complete answer for Rolex, but a move in the right direction in my opinion. We shall see how it translates to the customer. Better or worse?

WoS is a giant company that is publicly traded and will never lose Rolex the numbers are just too high, what they sell of CPO is crazy not to mention the new pieces. This is why they don’t care if you purchase from them or not and Rolex will do nothing about it ever.

I hope Rolex cleans up the ADs that treat their clients like garbage! Rolex was never like this and what it has become. Buying a new Rolex now is a job, you have work it to get one if you are very luck for some of us.

[Gratters]

Originally Posted by Dave O

I hate flippers as much as anyone. But let's get real about the numbers. Let's say Chrono 24 sells 50,000 new Rolex's a year (which I don't think they do). That's only 4% of the total 1.2 million watches Rolex produces a year. The other 96% are most likely getting their watches at their AD. A lot of flipping going on? Yes, but in the overall scheme of things it's a relatively small number.

hmmm just to add a little context, I live in SE Asia, I can get ANY rolex, and more than one of each model from at least a dozen Rolex sellers. All brand new. Along with thousands more nearly new/unworn. Look at Rolex thailand website, if the watch you want isn't on there at that moment in time, someone on there will find it and every deal comes with an authentification process. They also tend to be cheaper than the west. Personally I would be surprised if more than 75% of new rolex are sold 'legitimately'

[ratty]

Originally Posted by L8r

Hope they don't dump Watches of Switzerland. It's all we have out here in the sticks.

I really do hope they dump WoS.

[ratty]

Originally Posted by Dave O

I've said it twice in this thread already and I'll say it again. Bucherer is NOT taking over sales for Rolex nor will they be able to. And WoS is even smaller than Bucherer, so that's not going to make that much of a difference either to those that think they will take over. Bucherer is a mere 2.5% of the total Rolex AD network. And they aren't everywhere around the globe. Some AD's are closing because they don't want to shell out over 7 figures to remodel their store the way Rolex wants it to be. My AD is currently going through a remodel and will still sell jewelry and other watch brands once the rebuild is complete. Will the AD network shrink as a result of this? Most likely. But not at the scale that some people think it will.

I’m curious about your numbers.

In the UK it feels like WoS have almost a monopoly on Rolex sales. How big is WoS in the USA?

[whatisarolexym]

I really hope they do not get rid of smaller family-business ADs. They seem to give the best service and have the best chance of getting an allocation.

Bucherer are the most arrogant and the worst customer service ADs in London. Just look at their reviews.
WOS are a close second. Arrogant, rude and highly unlikely to allocate you a watch.

[TomInNJ]

Originally Posted by HiDive

I am not trying to say that Rolex will have exclusive boutiques but that they could if they want to . They have actually had exclusive boutiques for many years. In NYC they have their own store in the Rolex Building midtown Manhattan. My wife used to go there on business, because she was the Aetna Rep for their company Health insurance. I don't know if they have more in other cities, but my guess is they do. There are a handful of single brand boutiques in Honolulu, but I think they are owned by a private company, Tourneau.

I definitely do not think that any of the brands should get rid of their AD's, I was just trying to make the point that even though Omega and Breitling have regular jewelers as AD's they also have company owned exclusive Boutiques and why shouldn't Rolex have both types of sales outlets as well. Omega and Breitling have certain models that are only offered through these company owned Boutiques but as far as I know Rolex does not do this.

The boutique in the Rolex building (which is closed at the moment because a new building is being built) is not Rolex owned. It is owned and operated by Wempe.