If you scan the recently published barons.com article Watch Retailers Hunker Down During Covid-19 Crisis and Plan for Recovery, you’d be forgiven for thinking watch dealers are on coronavirus alert, but not panicking. They reckon they’ll “come through the Covid-19 crisis healthy and primed for recovery.” Reading between the lines, it’s a horological horse of a different color . . .
Our prediction – that Coronageddon would force shuttered dealers to reach out to customers to move the metal at a discount – has come to pass.
“We are managing to maintain some revenues through online in the U.K. where we are the clear market leader online,” Watches of Switzerland CEO Brian Duffy reveals. “In the U.S., we are taking a very personalized approach, contacting clients individually and managing to do some transactions.”
“We are staying in touch with our clients remotely via email and phone, not pushing a hard sell by any means, but just checking in to say hello,” asserts Brian Walker, VP of Shreve, Crump & Low. “A happy reminder that with ‘Hey, how are you? We are thinking about you and your loved ones during this time.’.”
If you think these calls are strictly casual, I’ve got a Rolex OP 39 I’d like to sell you for ten grand.
The situation is the same further down the retail food chain. As time marches on – and on and on and on – dealers will step-up this consumer outreach, looking to turn discounted timepieces – and how could they not be? – into rent, salary and utilities.
It’s worth noting that buying a watch doesn’t necessarily mean getting a watch. At least not quickly. Some watch dealers are telling us they can’t ship orders. Their corporate overlords don’t want to expose their employees to coronavirus during the stock retrieval and mailing process. Not to mention commuting issues (mailing watches is not considered an essential service).
Timepieces you’d see on the pre-owned market once in a blue moon are appearing on a daily basis. Especially Rolex, the watch a lot of people bought as a wearable savings/investment account. As you can see, prices are dropping. @watchtradingco posted the above graphic last week. You can bet pre-owned prices aren’t going up from there.
@watchbox has posted a “market wrap” gently trotting out the word “softening” and serving-up self-serving reassurances: we love F.P Journe and they’re holding steady! Somewhere in the middle of all that, Mike Manjos predicts that Richard Mille watches are set to crater (paraphrasing). Nothing we haven’t said before, but, well, here it comes.
chrono24.com has released a fascinating study of their global traffic (click here to view). The online marketplace reports weekly sales are still down 15-20 percent compared to before Coronageddon. Checkouts are way down in Japan and the UK, but stable elsewhere.
Dealers have been changing their prices in both directions. We’re seeing more price increases (blue) and decreases (red) than before coronavirus.
The speculation here: dealers worldwide are raising their prices – slightly – on grail watches that have finally come to market, and lowering their prices on everything else.
I think that’s right. Short term, we’re looking at increased availability of grail watches, rather than price drops. That will come after the new supply satisfies latent demand from collectors thinking “wow! there it is!” rather than “wow! what a bargain!”
Big discounts will arrive as demand diminishes and owners and dealers become increasingly cash stressed. Once they pass through denial and anger into bargaining. If they act too late, watch sellers will see even lower prices and feel even more depressed. After that, acceptance. And lower prices still.
Of course, there is a price below which a grail watch will never go. I suspect we’re going to find out what it is.
Click here to read our Coronavirus Watch coverage