In WatchBox Market Wrap Ep. 05, veteran trader Mike Manjos reveals that watch prices are dropping across the board. “We got aggressive two weeks ago,” he admits, “we adjusted prices on Rolex sport models.” This week, WatchBox sold a ceramic Rolex Daytona for under $20k. A week previously . . .
Mr. Manjos was selling them for $21k and $22k. A week before that, two weeks ago, the Watch Trading Co was selling a pre-owned Rolex Daytona for $23,450.
And four weeks before that – at the very start of Coronageddon – a pre-owned panda-faced Daytona was pulling down $24,500. In short, the price of the Rolex has dropped $4.5k in six weeks.
We have every reason to believe all Rolex models are dropping by similar amounts, even the formerly hard-to-get, price premium models. The Rolex bubble may not be bursting, but it sure is leaking air.
That’s because the online watch market – the only market that currently exists in an significant sense – is hurtin’ for certain.
stackline.com surveyed U.S. E-commerce sales to compile their list of the “Top 100 Gaining and Top 100 Declining categories in March.” According to their data, online sales of Watches & Accessories were down 49 percent, year-on-year.
SwissLuxury.com supremo Darryl Randall offers an even bleaker picture: “Nothing is moving. Buying and selling has dropped by 90 percent.” To move the metal, the gray market dealer is offering a Rolex “Batman” for $15,763 (plus $75 shipping).
As we reported in Coronavirus Watch 10, WatchBox is sitting on $80m worth of inventory. No surprise, then, that they discounted 13 Rolex “Batgirls” by two grand (to $12,950) and slashed Rolex “Pepsi” prices from $17k to $15k.
This not the end, my friend. While Watches of Switzerland is publicly hoping to re-open its stores by the end of June (helping its stock price recover), there’s no dependable Coronageddon end date. Not even a clear exit strategy.
Which watch dealer – big or small – can afford to wait another two-and-a-half months for income? New business that could well take many more months to ramp-up to pre-Coronageddon levels.
Bottom line: Rolex prices have nowhere to go but down. That’s a given. The only question is when and by how much? And what of box fresh Rolex? How long before they hit the gray market?
As you can see from the screen cap above, they’re already out there.
authenticwatches.com‘s asking price still represents an enormous premium on the Daytona’s $13,150 official sticker. Hang fire. NIB gray market Rolex prices will soften as authorized dealers discreetly unload inventory (driving down pre-owned prices). Every day in quarantine brings that likelihood closer.
Meanwhile, Mr. Manjos let slip an extraordinary piece of information: prices on Patek Philippe Annual and Perpetual Calendars have “dropped from the 30’s into the 20’s.” What does that tell you?
It tells me that we’re nearing the point where it’s time to buy a grail watch – a timepiece that will appreciate five to ten years from now, that you’ll never be able to buy at a low[er] price again. But we’re not there yet. watchpro.com:
All 19 Rolex watches in Sotheby’s first weekly online auction sold at or above their estimates in a sign that demand for vintage and contemporary classic watches is as strong as ever.
Interestingly, only one out of five Audemars Piguet on the auction block performed as well. We’ll see just how Patek prices are faring when Sotheby’s online Patek Philippe auction ends three days hence.
I reckon the auction market is the canary in the coal mine. If top end watches fail to make their estimates, it’ll be a sure sign that watch prices are tumbling downstairs into the basement. As it stands now, they’re just walking down . . .
UPDATE: Click here for Coronavirus Watch 24: Rolex Prices Drop 20 – 30% dated June 10, 2020