Empty Cases Don’t Hurt Rolex ADs - WOS Sales Soaring

[vh2k]

Watches of Switzerland sales soar by 40% in the United States despite pandemic

The Watches of Switzerland Group reported sales rising to £905.1 million ($1.28 billion) for the financial year ending May 2.

It is the clearest indication yet that the luxury watch market has been far more resilient than the wider retail economy as customers looked to tangible assets with history, integrity and lasting value during the chaos of the pandemic year.

Sales were up by 13.3% over FY20 at constant currency and 11.7% after adjusting for the rising value of sterling.

Turnover for the latest year was 17.9% higher than FY19.

“We finished the year strongly and enter the new financial year with real momentum, continuing to prove the value of our highly differentiated model,” says WOSG chief executive Brian Duffy.

The UK accounts for two thirds of turnover, and stores there were closed for exactly half of the financial year. Despite that, group still grew sales by almost 4%.

In the United States, the group’s Manhattan flagship stores faced similar restrictions. But Florida, where it owns the Mayors chain of jewelers, enjoyed much greater freedom to trade.

US sales for the full year rose 38.5% at constant currency to £298.6 million while UK sales of £606.5 million were up 3.6%.

“Throughout the year we either met or exceeded our guidance despite the changing circumstances, in particular, the much longer-than-expected last lock down in the UK. In the UK, we delivered a very robust performance, overcoming a total of 26 weeks of store closures and hugely reduced travel and tourism business. In the US, we generated an outstanding result with very strong momentum,” Mr Duffy describes.

We responded to the challenging environment by increasing investment in capex, digital marketing, systems and stock which has resulted in the positive momentum that we carry into FY22. Our guidance for FY22 reflects our confident outlook for the luxury watch and jewellery categories and the success of our modern, international and multi-channel model.

Despite the group’s Mappin & Webb chain holding royal warrants as a silversmith since 1897 and being named Crown Jeweller in 2017, jewellery now accounts for less than 7% of turnover for the entire Watches of Switzerland Group. Luxury watches now bring in 87.1% of group revenue.

With shops closed for months and overseas tourists absent from the group’s biggest flagships in London and New York, Watches of Switzerland Group dramatically ramped up its clienteling, ecommerce and focus on domestic customers.

For the full year, sales to domestic customers rose from 72.5% of group turnover to 94.7%.

Ecommerce revenue rose by 120.5%, thanks to what the company describes as proactive application of advanced technology to digital marketing, customer relationship management and clienteling.

Profits are expected to be confirmed at between £104m and £107m when they are audited, up from £78.1m in FY20.

Net debt was dramatically reduced from £130m to £44 million.

The group initially used UK government support in the early days of the pandemic, but confirmed in accounts released today that all furlough money (the equivalent of our Paycheck Protection Program) would be repaid along with a £45 million Coronavirus Large Business Interruption Loan Scheme facility.

Approval has also been given to create a Watches of Switzerland Group Foundation with £3 million pounds already committed for this year and next.

[Nairn1980]

They’re only empty to “average joe”

[Mystro]

It’s street magic slight of hand. Empty cases are now a sales technique for the newbies buying into the “rare” and “exclusive VIP” marketing.

All due respect, toilet paper sales were up as well but that doesn’t mean people frequented their bathroom more and the high sales are sustainable. Everything has a way of balancing out over time. I just hope AD’s will eventually have a full case for new buyers to actually try on and not feel pressured to buy the only model that is offered to them or feel pressured to buy products they don’t want to own a watch they do want.

[fsprow]

The last time I was in a WOS store (Hudson Yards, NYC), Rolex customers were seemingly very happy with their purchases, pretty much all in PM and with diamond bezels. I think Rolex and dealers they wish to retain are moving upscale with great success.

[flyboyyy]

Originally Posted by Mystro

It’s street magic slight of hand. Empty cases are now a sales technique for the newbies buying into the “rare” and “exclusive VIP” marketing.

All due respect, toilet paper sales were up as well but that doesn’t mean people frequented their bathroom more and the high sales are sustainable. Everything has a way of balancing out over time. I just hope AD’s will eventually have a full case for new buyers to actually try on and not feel pressured to buy the only model that is offered to them or feel pressured to buy products they don’t want to own a watch they do want.

Indeed! The whole "I just bought two DJ41's because I'm trying to build a spend history with an AD so I can get a GMT" thing we're seeing over and over is pure lunacy. Obviously it's driving some of the sales madness. FOMO/Keeping up with the Jones's/Make a quick buck scenarios are nuts right now.

As you said, many business segments saw and are seeing similar YoY figures for growth - even during the pandemic, so it's not entirely limited to Rolex or luxury goods only.

[fskywalker]

Thanks for sharing


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[Master_Grogu]

Had a very interesting discussion yesterday with a collaborator of one of the largest grey in the world.

Basically we discussed that people go to the AD, buy whatever they can and just sell it back to them. The attitude of the AD also changed. The associate has a contact at one local AD, which confirmed they keep having individuals coming and asking to buy whatever they have, and to keep the stickers/protections. At first the AD (open recently) was nice and I remember buying a watch on the spot, and them having a nice attitude and being just ready to put you on the list for any model, even two if you were already a client.

Now, they are bitter somehow and lists are closed. They have nothing to try, and god forbids you ask for a model while being on a list already. For example I said “I am interested in 126655, however I don’t want to change my interest for 126710BLRO”. They flat out said no, while before I could have asked for 126660JC, which also interested me.

The grey associate also mentioned the experience where he went to see an oyster, and came two weeks after inquiring. The AD was surprised of the audacity and basically lied saying they probably didn’t have any stock two weeks ago. He had a hard time coming up with an excuse when faced with a picture of the watch, working model with price tag, on the wrist of the grey associate, taken back then.

So basically what is happening is everybody is a wise guy. People know they can buy something and sell it for a profit, and if they buy something uninteresting they can still grow up in the list by spending cash, climbing the ladder of the relationship and thus be offered a very profitable model to flip.

I thought about this in about 1 minute of learning the current Rolex situation, so of course people smarter than myself have figured it out as well.

Buy what you can, flip, wait for the prize.

[asiparks]

They do very well with other brands that they do put on display- they're opening more "monobrand" Omega, Breitling and Tag boutiques here and in the UK, as sales for those brands in particular have been very strong.

[superspectral]

Originally Posted by Master_Grogu

Had a very interesting discussion yesterday with a collaborator of one of the largest grey in the world.

Basically we discussed that people go to the AD, buy whatever they can and just sell it back to them. The attitude of the AD also changed. The associate has a contact at one local AD, which confirmed they keep having individuals coming and asking to buy whatever they have, and to keep the stickers/protections. At first the AD (open recently) was nice and I remember buying a watch on the spot, and them having a nice attitude and being just ready to put you on the list for any model, even two if you were already a client.

Now, they are bitter somehow and lists are closed. They have nothing to try, and god forbids you ask for a model while being on a list already. For example I said “I am interested in 126655, however I don’t want to change my interest for 126710BLRO”. They flat out said no, while before I could have asked for 126660JC, which also interested me.

The grey associate also mentioned the experience where he went to see an oyster, and came two weeks after inquiring. The AD was surprised of the audacity and basically lied saying they probably didn’t have any stock two weeks ago. He had a hard time coming up with an excuse when faced with a picture of the watch, working model with price tag, on the wrist of the grey associate, taken back then.

So basically what is happening is everybody is a wise guy. People know they can buy something and sell it for a profit, and if they buy something uninteresting they can still grow up in the list by spending cash, climbing the ladder of the relationship and thus be offered a very profitable model to flip.

I thought about this in about 1 minute of learning the current Rolex situation, so of course people smarter than myself have figured it out as well.

Buy what you can, flip, wait for the prize.

All of this shady rent-seeking arbitrage certainly appeals to "wise guys." I'm not sure everyone wants to be seen joining that club by wearing a Rolex. It is certainly turning me off.

[Master_Grogu]

Originally Posted by superspectral

All of this shady rent-seeking arbitrage certainly appeals to "wise guys." I'm not sure everyone wants to be seen joining that club by wearing a Rolex. It is certainly turning me off.

I never cared for hype so I keep buying what I like. However it annoys me because I have competition to buy things I like.

[brandrea]

Originally Posted by Mystro

It’s street magic slight of hand. Empty cases are now a sales technique for the newbies buying into the “rare” and “exclusive VIP” marketing.

All due respect, toilet paper sales were up as well but that doesn’t mean people frequented their bathroom more and the high sales are sustainable. Everything has a way of balancing out over time. I just hope AD’s will eventually have a full case for new buyers to actually try on and not feel pressured to buy the only model that is offered to them or feel pressured to buy products they don’t want to own a watch they do want.

You have a way with words

[CoveWatch]

Dont understand why anybody ever thought empty cases was hurting AD's... empty cases means it was sold for the most part!

To add, other brands wish their cases were empty at AD's as well

[gerry100]

Empty cases only hurt in the long run

[Mystro]

Originally Posted by brandrea

You have a way with words

Thank you..... Being around this so long I do tend to get too direct and might address topics with too much tough love. I forget there are some really great new owners that just discovered the Rolex brand at the worst possible time in history for a enthusiast. Its a crying shame how much pure b.s has set up shop corrupting the Rolex ownership experience for todays enthusiast. Not to sound like a grumpy old timer (in my 40's) but many of us fear those day might never come back for the brand and its very troubling. There are so many wonderful assets to the Rolex brand that is getting lost.

[enjoythemusic]

Frankly, have always enjoyed good service from WoS and their company Mayors. Good for them! Was at their expanding Las Vegas store in Wynn two weeks ago and it was great. Look fwd to when they have their dedicated Rolex section open.

BTW my friend in ATL is getting two DJ36 from Mayors. He attended a party they kindly hosted in Tampa for EnjoyTheMusic.com .

[brandrea]

Originally Posted by Mystro

Thank you..... Being around this so long I do tend to get too direct and might address topics with too much tough love. I forget there are some really great new owners that just discovered the Rolex brand at the worst possible time in history for a enthusiast. Its a crying shame how much pure b.s has set up shop corrupting the Rolex ownership experience for todays enthusiast. Not to sound like a grumpy old timer (in my 40's) but many of us fear those day might never come back for the brand and its very troubling. There are so many wonderful assets to the Rolex brand that is getting lost.

I agree with you and shares some of those same concerns.

In my 50's now and have seen all manner of markets over that time, but nothing quite like this.





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[Exceptional1]

https://www.youtube.com/watch?v=2LAls6AdvXQ

[ArtNouveau]

Originally Posted by asiparks

They do very well with other brands that they do put on display- they're opening more "monobrand" Omega, Breitling and Tag boutiques here and in the UK, as sales for those brands in particular have been very strong.

The upscale mall where my AD/Rolex Boutique is also has brand Boutiques for Omega, Panerai, Hublot, Breitling, and TAG. The Rolex shelves have sparse inventory but there’s always people going into the store. Omega seems to have a fair amount of business too. The others always seem empty.

PS: I was just leaving yesterday after chatting with my SA. A guy had just walked in and was looking around. Another SA asked him how they could help and the guy said “I’m looking for a particular watch.” I walked out before I heard what it was but I bet his answer was no.

[SubMillennial]

So how does this help grow the brand? Or is Rolex SA fine with that 40% number representing the same buyers they had previously just buying more, including Greys? Because if you're tacitly approving ADs closing the door to new customers without buying 3 ladies DJs first, this is what's going to happen

[asiparks]

Originally Posted by SubMillennial

So how does this help grow the brand? Or is Rolex SA fine with that 40% number representing the same buyers they had previously just buying more, including Greys? Because if you're tacitly approving ADs closing the door to new customers without buying 3 ladies DJs first, this is what's going to happen

I don't believe it does in a sustainable way.
Say, up to 2015, Rolex was every bit as aspirational- expensive but still attainable, a way to reward yourself, maybe to mark a special occasion.
Watches bought as "one watch for the rest of my life".
Now it's a game, they're been collected like Beanie Babies, multiple watches going to the same select few buyers, cutting off the supply to new buyers, unless they want to pay the Grey premium.
The watches are basically the same, just the behaviors associated with Rolex have become increasingly repugnant. They might be the social media driven hotness now, and for a while, so people will put up with a lot of crap to get one, but that probably won't last forever, as hype tides invariably turn...

[enjoythemusic]

Originally Posted by brandrea

In my 50's now and have seen all manner of markets over that time, but nothing quite like this.

100% agree, never seen it this crazy. To be fair, this greatly helps the overall health of the entire industry as there are many great brands / models. Heck, never felt I'd ever have a Bvlgari, yet holy cr@p their Octo FS world-record thin auto-wind 100m WP rated movement.... is an epic piece priced right imho.

So what TRF'ers can't get a Rolex, get a Heuer Monaco, or Panerai, Omega, or Bvlgari, or FP Journe if you want ultra fine. SOOO many great timepieces to choose from

Yet yesssss, never ever seen demand / supply this crazy.

[Chester01]

Empty in the front, full in the back.

[Mendota]

Originally Posted by Chester01

Empty in the front, full in the back.

That's what she said...

[Shaitan]

I can concur, definitely only empty in the front. Got to try a Steel/Blue dial DJ and a Batgirl in the Knightsbridge store after buying a ym (2 days wait) and a blancpain divers watch. And I’m promised a batgirl by the end of the year. Have zero history with them and didn’t have to buy ladies DJ’s to have someone talk to me. Got to get the right person and have the right attitude imo. You need an SA who loves talking watches and you have to know your stuff too and he will help you out and remember your name when the next shipment comes in.

Has anyone paid cash in WOS before, do they accept it up to a certain amount? Looking at a Ulysse NARDIN which is 5,3k so should be fine if they do accept cash?

[Benzsiam]

Originally Posted by Shaitan

I can concur, definitely only empty in the front. Got to try a Steel/Blue dial DJ and a Batgirl in the Knightsbridge store after buying a ym (2 days wait) and a blancpain divers watch. And I’m promised a batgirl by the end of the year. Have zero history with them and didn’t have to buy ladies DJ’s to have someone talk to me. Got to get the right person and have the right attitude imo. You need an SA who loves talking watches and you have to know your stuff too and he will help you out and remember your name when the next shipment comes in.

Has anyone paid cash in WOS before, do they accept it up to a certain amount? Looking at a Ulysse NARDIN which is 5,3k so should be fine if they do accept cash?

Some AD will give you 2-3% discount when you pay in cash because they don't have to pay the fee for credit card company. When you pay in cash with big amount, the government require you to sign the paper, they want to make sure that money is legal not laundering. It's better to deposit cash in your bank and you wire transfer that money to the seller or use cashier check.

[Ferdelious]

Originally Posted by Mystro

Thank you..... Being around this so long I do tend to get too direct and might address topics with too much tough love. I forget there are some really great new owners that just discovered the Rolex brand at the worst possible time in history for a enthusiast. Its a crying shame how much pure b.s has set up shop corrupting the Rolex ownership experience for todays enthusiast. Not to sound like a grumpy old timer (in my 40's) but many of us fear those day might never come back for the brand and its very troubling. There are so many wonderful assets to the Rolex brand that is getting lost.

Well said.

I was in my AD today and there exactly 2 watches in cases, 2. Both were ladies datejusts. I don't see how that can help the brand in the long run.

[Shaitan]

Originally Posted by Benzsiam

Some AD will give you 2-3% discount when you pay in cash because they don't have to pay the fee for credit card company. When you pay in cash with big amount, the government require you to sign the paper, they want to make sure that money is legal not laundering. It's better to deposit cash in your bank and you wire transfer that money to the seller or use cashier check.

Here in the UK it’s a little different, some shops straight out refuse to take cash especially for luxury goods. The bank asks you the same questions if you put in 5k in your account, you sometimes have to show proof where you got the cash. It’s tough here since they changed the money laundering laws. Any transaction in cash over 10000 euros has to be reported (it was set by the eu when the uk was still member). I gamble a lot and have lots of cash at times so would be nice if the AD accepts it for cheaper models. But maybe I should post a separate thread asking whether the deal is in the Uk, only USA members in this thread I think :)

[kip595]

While I enjoy WoS, I have yet to have a positive experience with Mayor's itself. The last time I was in one of their locations (weekend before last) the SA sighed and acted as though she was doing me an exhausting favor to say: "No, I don't think we have a Top Time (Breitling) in."

She didn't bother to actually check in the system or in the case, fwiw, so I didn't bother to ask if they had any Rolex in besides the one diamond DJ 31 on display.

Sadly, this was one of my less annoying experiences with Mayor employees. :/

[SDGT3]

The sales technique and higher margins of the roaring 2020's is the artificial "shortage" in everything. Lumber, gas, home goods, watches, rental cars as well as shortages of truck drivers to deliver product to market etc. It's all manipulation from producers to the consumer via media, both mainstream and social.

The watches are being held in the back to create the illusion of a shortage to prop up a secondary market. Anyone here can get whatever they want if they are willing to pay a premium for it now.

This perceived shortage has crossed over into the service industry as well from the narrative of not enough workers to do the job to perceived exclusivity. It's all BS.

[brandrea]

Originally Posted by enjoythemusic

100% agree, never seen it this crazy. To be fair, this greatly helps the overall health of the entire industry as there are many great brands / models. Heck, never felt I'd ever have a Bvlgari, yet holy cr@p their Octo FS world-record thin auto-wind 100m WP rated movement.... is an epic piece priced right imho.

So what TRF'ers can't get a Rolex, get a Heuer Monaco, or Panerai, Omega, or Bvlgari, or FP Journe if you want ultra fine. SOOO many great timepieces to choose from

Yet yesssss, never ever seen demand / supply this crazy.

This is an excellent point and I agree ... there is a benefit to all this in as much as it may open eyes to other brands.

The silver lining

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