What will happen with both resale and AD s pricing going forward

[madmax21]

With the toll of this covid-19 thing happening what will happen with pricing. I'm starting to hear that production is going to be cut back by about 160000 watches.

That said what will happen to the pricing with people potentially losing their houses and barely being able to pay for their bills thanks to our world leaders who frankly should have foreseen and better reacted nonetheless.

Will this destroy the value of the Rolex brand or is this a god-sent for the brand and by reducing pricing by maybe discounting watches could it be the brand become even more popular and eventually increase to even bigger price increases in the future. Let me close by saying I hope everyone is doing well and staying safe...Godspeed

[Frakis]

Please share the source you have that stated Rolex will decrease watch production by 160,000. With all due respect, nobody but Rolex knows production numbers.

As for your question: Rolex as a company is a Marketing genius. They will weigh all options. I personally do not believe this pandemic will “destroy the value of the Rolex brand.”

I also wish good health to all!

[madmax21]

Originally Posted by Frakis

Please share the source you have that stated Rolex will decrease watch production by 160,000. With all due respect, nobody but Rolex knows production numbers.

As for your question: Rolex as a company is a Marketing genius. They will weigh all options. I personally do not believe this pandemic will “destroy the value of the Rolex brand.”

I also wish good health to all!

Let me clear that up it was on the Rolex Forum that I read it all though I can't remember the exact OP. It was an estimate based on the amount of time they were closed in Switzerland if it's not accurate I'd love to be educated further

[Yess]

There's a lot of threads on this already. However...

Rolex doesn't need to ship watches to the ADs, they don't need sales, there are no shareholders to appease, and it's only guess work how much cash they would have on hand as a business... but let's all agree they could stay afloat for a few years at least (I would say decades) without selling a single watch. Most ADs will likely do it tougher, although the AD I frequent was busy when I was there last Friday.

More importantly, however, Rolex will never allow their brand value to drop by sending hot watches to ADs to have them sit and collect dust, only to be sold under MSRP - what do they gain by this? To be on par with Tudor, or Omega, or any other quality brand that has stock readily available? They have managed to ignite a drive for watches that exceeds almost every other brand, why would they give it up for a handful of sales (which they don't need).

I also don't think demand at the Rolex AD level has dropped significantly; grey prices dropping, certainly, but easy to come buy SS stock at below MSRP from an AD - I highly doubt it.

[madmax21]

Originally Posted by Yess

There's a lot of threads on this already. However...

Rolex doesn't need to ship watches to the ADs, they don't need sales, there are no shareholders to appease, and it's only guess work how much cash they would have on hand as a business... but let's all agree they could stay afloat for a few years at least (I would say decades) without selling a single watch. Most ADs will likely do it tougher, although the AD I frequent was busy when I was there last Friday.

More importantly, however, Rolex will never allow their brand value to drop by sending hot watches to ADs to have them sit and collect dust, only to be sold under MSRP - what do they gain by this? To be on par with Tudor, or Omega, or any other quality brand that has stock readily available? They have managed to ignite a drive for watches that exceeds almost every other brand, why would they give it up for a handful of sales (which they don't need).

I also don't think demand at the Rolex AD level has dropped significantly; grey prices dropping, certainly, but easy to come buy SS stock at below MSRP from an AD - I highly doubt it.

I think you bring up some very valid points my only concern would be like you said AD s can't just be sitting around not selling watches and that might damage the supply chain keep in mind some countries whose economies were already in limbo with this now happening they may have no choice but to sell watches at whatever they can manage to get for them a lot of overseas selling Maybe Might occur this too might affect things the other problem is if Rolex decides they're not going to sell watches for a year or two won't this also damage the brand?

[Yess]

Originally Posted by madmax21

I think you bring up some very valid points my only concern would be like you said AD s can't just be sitting around not selling watches and that might damage the supply chain keep in mind some countries whose economies were already in limbo with this now happening they may have no choice but to sell watches at whatever they can manage to get for them a lot of overseas selling Maybe Might occur this too might affect things the other problem is if Rolex decides they're not going to sell watches for a year or two won't this also damage the brand?

I'm not really suggesting they don't sell any watches. What I am suggesting is they are already controlling the demand, all it would take is for them to turn the tap off a little more on the hot models while certain markets are bouncing back.

Again, what possible reason would Rolex have to flood a market with hot watches and then have to discount them? Selling two subs at 15% off hurts the brand and the ADs... why not just sell one at full price? Financially it is a very similar outcome - both for Rolex and the ADs.

I also think if you are in North America and certain pockets of Europe at the moment your outlook is (rightly) different to other markets. Don't get me wrong, everywhere you look there is the dreadful impact of the virus, but as other threads on this topic have covered, people are still buying Rolex, some are buying more due to the "life is short" mantra, and others who may not have been able to buy previously are filling in for those who can't or don't want to buy.

Oh, and everything I have said pertains to the ADs, the grey market is whole other story that I care very little about.

[Yess]

Originally Posted by madmax21

I think you bring up some very valid points my only concern would be like you said AD s can't just be sitting around not selling watches

I forgot to address this part:

The AD I visit sells a lot of brands - I am sure a good portion of their income comes from Rolex, but I am also sure if they lost Rolex entirely that they would stay afloat. They may not be as profitable, but they move a lot of other brands.

[SudiYunus]

Rolex is Rolex, highly possible they might increased their prices when they return to normal, just like other strong brands, Chanel, Louis Vuitton, ...

https://www.businessinsider.com/fash...-prices-2020-5

[Theoffice]

Hermes had record sales after opening back up, all that pent up demand

[Wobbly]

Originally Posted by Theoffice

Hermes had record sales after opening back up, all that pent up demand

Yes, almost $2.7 million in one day at one Hermes store in China.