Coronavirus Watch 6: Watch Dealers Trumped?

Trump tweetAfter more than three years of the President’s puddle of consciousness ranting and copious displays of ignorance, misstatements, wishful thinking, fabrications and egomania, the mainstream media still can’t resist trying to hold the Commander-in-Chief accountable for his words (and ignoring his accomplishments). They’re like cocaine-addicted mice hammering on the drug release bar as they wither and die. So last night’s midnight Trump tweet will get maximum airplay, which will delay watch dealers’ discounts. Or will it?

It’s a simple formula. The longer the lockdown, the more desperate dealers become to turn safe-stored Audemar Piguet, Patek Philippe, Rolex and other high-priced grail watches into cash. The deeper the hit they’re willing to take to move the metal. (Following images courtesy thewatches.tv.)

Bulgari - Geneva watch dealers closed (courtesy thewatches.tv)

No surprise there. Watch dealers’ expenses keep rolling in: rent, utilities, telephone, loans, labor (you don’t fire family). Big ticket items come due in 60 or 90-days. Dealers also have to pay their personal expenses: mortgage, car, utilities, food, Netflix, etc.

Depending on whether or not watch dealers learned anything from the market crash of 2008 and stashed cash reserves for a rainy day, they can hold out for a while. Maybe a month or two or even three. But not forever.

They can certainly hold out until the President’s suggestion that coronavirus confinement will ease in April – unleashing a suddenly “sky-rocketing” economy – proves to be pure fantasy.

Patek Philippe - Geneva watch dealers closed (courtesy thewatch.tv)

The coronavirus curve of death is rising like a souffl√©, rather than flattening like a pancake. New York, California, Washington, Pennsylvania, Ohio, Delaware, Michigan, Illinois and Louisiana have all issued “shelter in place” edicts. New York’s extends 90 days.

Which is why the anti-Trump media is howling bloody murder even as I type, lambasting the President for creating false hope of a two-week reprieve. A more realistic estimate of the coronavirus’ worst health and economic impact is 60 days. But you never know, and a national lockdown would change the picture again.

Watch dealers are OK with the President’s departure from reality. Optimism sustains prices. Which is why some watch dealers are sending their horological piggies to market now.

Shuttered Blancpain - watch dealers Geneva

The longer dealers wait before cashing in their chips, the more they face the prospect of other dealers – and private sellers – getting into the market before them, when demand for grail watches is relatively strong, supply is relatively low and prices are relatively high. If they wait too long, the market will flood. Supply will rise and prices will crater.

Basically, dealers are playing a game of chicken with the free market. Even if the 60-day funk estimate proves accurate, remember that the luxury watch business will not come roaring back. Until it does.

Meanwhile, watch prices are already slowly softening.

We’re still at the top of the watch market downslope. If you’re waiting for a bargain on a luxury timepiece, give it at least a month. Now is the time to do nothing except read this website and watch the watch market. Even as it’s time for all of us to do whatever we can to protect life.

Click here to read the latest Coronavirus Watch coverage

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