Rolex, Patek Philippe and Audemars Piguet waiting lists are just as long as before the pandemic say authorized dealers. That’s the headline at watchpro.com. Which tells you nothing. Why would someone take themselves off a Rolex wait list for a panda-face steel Daytona? What have they got to lose by staying on it? The more important question . . .
will they say “yes” when they get the call?
We hear stories of dealers calling customers on the Rolex wait list to say their watch has finally arrived – and getting turned down. One customer said he couldn’t buy a new Rolex after laying off hundreds of employees. His boss wouldn’t be impressed either. If you can’t wear your fancy Daytona or Hulk GMT at work or in public as a badge of honor, why buy it?
Not surprisingly, watchpro.com’s Rob Corder doesn’t mention this issue. The industry cheerleader was more interested in finding a cipher to debunk our suggestion that Rolex (and Patek and AP) might ramp-up grail watch production to generate desperately needed cash for both dealers and the corporate mothership.
One authorized dealer who spoke to WatchPro on condition of anonymity [ED: dealership not shown above], said he did not expect Rolex or Patek Philippe to significantly ramp up production of unicorn watches, adding that he thought it was good for the market that they remain too rare to be sold to walk-up customers.
“I don’t want to see [Rolex Submariner] Hulks in windows. Demand should exceed supply for these special watches,” he suggests.
“I expect the balance between steel professional watches and DayDates, etc, to remain about the same,” he added while stressing that nobody outside the Rolex citadel really knows.
I find it incredible that an authorized Rolex dealer wouldn’t want lots of customers rocking-up and buying Hulk Subs right from the window right about now. And if the Rolex dealer does have that opinion, check in with him again if a Christmas sales catastrophe come to pass.
The old paradigm – grail watches sell lesser watches – is dead. Thanks to Coronageddon, customers further down the food chain are not in a position to stretch their budget to buy a Rolex. Some are now unemployed, all are wary of the future. As well they should be.
Any Rolex dealer who doesn’t see which way the wind is blowing in their market sector is willfully blind. bain.com:
After falling by an estimated 25 percent in the first quarter of 2020, the slowdown [in the personal luxury goods market] should accelerate in the second quarter and could lead to an estimated contraction of between 20 percent to 35 percent for the full year.
I’d bet dollars to donuts Rolex availability will be greater in the next two months than it’s been in the last two years – regardless of limited production. I’d wager even money that falling demand will make the Rolex wait list – at least for non-grail Explorers, Datejusts and the like – a thing of the past.
In terms of price, I repeat: there’s no chance Rolex, Patek or AP are going to drop prices on any of their new watches. The luxury goods behemoths don’t want to devalue their brands. They’ve got the cash reserves/line of credit they need to weather the Coronageddon-caused storm – which could last years.
It’s another story at the other end of the sales pipeline.
Authorized dealers (ADs) are suffering. They may soon take a haircut on their margins to move the metal – if they’re not doing so already. As for grail watches, even AD’s staring down the barrel of bankruptcy aren’t stupid enough to sell a grail watch at a discount – as long as there’s demand. But is there enough demand?
Authorized dealers speaking to WatchPro have said that inquiries are still coming in for watches such as Rolex’s steel Submariner, GMT Master II, particularly the Batman and Pepsi; the Daytona 116500LN; Patek Philippe’s Nautilus and Aquanaut; and Audemars Piguet’s steel Royal Oaks.
Deliveries for these watches have been suspended since March to authorized dealers, and what stock there was in the channel before lock down has been sold to the best customers.
As with Chrono24, you’re advised to note the difference between “inquiries” and “sales.” And as interesting as interest is, how can unsatisfied consumer interest be good news? Inquiries don’t pay the rent. If there aren’t any or enough watches to sell, grail or otherwise, dealers are done. If they can’t sell the ones they have, same thing.
I have no doubt Rolex dealers are out of stock of grail watches – even though they’ve become an increasingly regular feature on the pre-owned market. Which brings us full circle. Will Rolex, Patek and AP (and Vacheron and the rest) increase grail watch production to save dealers’ collective bacon? Would even that be enough? Time will tell.
Prices for pre-owned watches are slipping at the bottom to middle of the Rolex market. Our man Adams will update you shortly. We’ve already made our prediction: a big fall after the fall. Meanwhile, I share Mr. Corder’s hope for the future. But I don’t share his optimism. In some ways, I hope I’m wrong. In other ways, I’m saving my money.