Watchbox has stopped buying pre-owned watches. Even Rolex. Their website doesn’t say so, but why would it? A salesman taking the call can try to gin-up a trade or, at the least, data capture the seller for future reference. If the caller has something really special at a stupid price, exceptions can be made. But here’s the really stunning fact . . .
Watchbox is sitting on $80m worth of inventory.
It’s safe to say they aren’t the only dealer experiencing a glut of pre-owned watches. Or the only dealer looking to sell something into a soft market. And we all know what that means: lower prices for the watch you want to sell, and lower prices for the watch you want to buy. Or does it?
Watch pricing is a game of chicken. How bad do you want it vs. how badly do I need to sell it? If Watchbox can afford to sit on its multi-million dollar inventory – waiting for the day when Coronageddon hits the rearview mirror and the market recovers – they can afford not to discount their watches.
But the longer they wait, the more their competition can soak-up whatever market demand exists by offering discounted watches. Leaving less demand for everyone else. And the probability of even softer prices down the road.
Which is why a Florida friend’s local dealer called and tried to sell him a rare blue dial IWC Portugieser Chronograph. It lists at $7,700. My friend could have it for the “the same price I’d sell it to a gray market dealer” ($5,500).
At the same time, pre-owned Rolex prices are trending downwards, falling about $1k since we last checked in. And we’re seeing more desirable Rolex models come up for sale (above Rolex at authenticwatches.com).
That’s how it starts. That said, more than a few watch dealers – big and small – are future tripping. They’re putting their faith in late summer or early spring “revenge shopping” – long-suffering high end consumers celebrating their physical and financial survival by buying a luxury watch.
A dealer bud tells me revenge shopping was “definitely a thing” after the 2008 financial crisis. But even if it is a thing, how long can a watch dealer afford to wait? And what if it isn’t true?
Without any idea of how or when the economy will spool-up, the market for “luxury” pre-owned watches has gone into hibernation (even as the prices for lower-priced timepieces are tanking). The longer the lockdown continues, the greater the chances of a cash-strapped dealer thinking “FTS” and cut his or her prices to the bone.
We’re not quite there yet. So it’s the same bottom line as last week: wait. The time to sell your watch is gone. The time to buy isn’t here. Limbo dance, calming yourself by practicing your dealer communication: “how low can you go?”
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Would love to see a Weiss review, but Jack sold his.
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