“Rolex watches haven’t been serious tool watches for decades,” HoDinkee’s Danny Milton writes. “These are luxury items, and they are expensive.” And there you have it: the motivation behind the new gold Explorer. And a clear indication of the brand’s future. Bling Über Alles! As the Grateful Dead sang, what a long strange trip it’s been . . .
Still is. Take the Rolex Cellini collection. Please. A Rolex that doesn’t “say” Rolex is like a Rolls Royce that looks like a Kia. What Cellini watches have to do with the current Rolex brand is anyone’s guess. The rumored retirement of the name – Cellini out, Vienna in – ought to fix that. Or not. Anyway, here’s the Foundation’s take on Rolex’s red-headed stepchild:
The Cellini collection celebrates the most fascinating and exalting facets of watchmaking tradition. Here, elegance and nobility are absolute. The cases are available exclusively in 18 ct white or Everose gold cast by Rolex in its own foundry.
Ah yes, gold. There’s your answer. Cellini was the foundation of the Foundation’s push into precious metal timepieces. And then, in 2005, Geneva’s favorite son introduced its very own gold alloy: Everose. Everrose because it’s rose gold that doesn’t fade over time. Ever. millenary.com:
Everose gold is a mixture of pure gold mixed with copper and platinum. According to Rolex, this alloy will never lose its red color. It is thanks to the platinum that the color is maintained. And according to Rolex, its color will not be affected by any external factors, which is an issue otherwise.
Everose gold contains at least 76% gold and slightly more than 2% platinum. With Rolex’s secretive way of conducting its business, that is as detailed information about the alloy’s ingredients as you get.
As the video above indicates, Rolex is a highly automated manufacturer – which reduces its costs dramatically. (Swiss watchmakers are extremely well paid unionized workers.)
We also know that Rolex – and everyone else – charge a premium for gold watches that’s FAR above the actual cost of materials, production or assembly. Patek’s decision to kill the steel Nautilus and Audemars Piguets decision to terminate the classic Royal Oak is an indication that entire Swiss watch industry is bailing on steel. Let’s do the math . . .
A new all-steel Rolex Submariner Date costs $9150. Add gold to the steel bracelet and bezel and the Sub’s price jumps to $14,300. Go all gold and you’re looking at $36,950.
Rolex would have to sell four steel-only Subs to gross the same amount of money as one gold Sub. The profit margin on the latter is significantly higher.
The new, smaller, all-steel Rolex Explorer stickers at $6450. The two-tone gold model runs $10,800. How much gold do you get for your additional $4350? Well it sure isn’t an ounce. As of this writing, gold costs $1,744.20 an ounce.
Bottom line: gold watches increase Rolex’s bottom line, giving Rolex the greatest measure of profitability.
Hang on. Could Rolex limit the supply of all-steel Explorers to “force” buyers into the two-tone version? They could. Remember: Rolex has steadfastly refused to increase overall watch production above 1m units per year, and they’re all sold out. Change the mix for more money! Done.
No matter how you slice it, Rolex has discovered that their financial future is in their foundry.
Of course, that’s not the reason Rolex fans are up in arms about the gold Explorer. The two-tone Explorer violates the watch’s raison d’être: exploring! It’s a watch built to withstand the slings and arrows of outrageous fortune. Allegedly.
As we’ve explained before, the Explorer is a bit of a con. It didn’t accompany Sir Edmund Hillary to the top of Everest (“The Call of the Peaks” LOL). It’s not Rolex’s hardiest model. And it isn’t as tough as watches costing a tenth of the price (e.g., any G-SHOCK).
But perception is reality and a gold Rolex Explorer breaks the spell. It’s an acknowledgement that the Explorer isn’t really a tool watch. It’s an extremely well made and expensive piece of jewelry.
The Emperor’s New Clothes naked truth reveal triggered by the gold Explorer has triggered owners of the all-steel model. They’re not happy. Truth be told, Rolex couldn’t give a damn. They can [rightly] say if you want your all-steel Explorer, you can keep your all-steel Explorer. Buy a new one too! At least in theory.
So why aren’t we seeing an all-gold Explorer? For the same reason there isn’t an all-gold Datejust: price points preclude it.
Like the GM brand lineup before it, the Rolex product line consists of a series of ascending price points. An all-gold Explorer would cost more than an entry level Submariner. Rolex doesn’t want a lower-priced models cannibalizing sales of higher priced models.
In any case – steel, two-tone or all-gold – a Rolex is a status signifier. Of the three, the last two are the “ultimate” status symbol. Not for purists, obviously. But Rolex demand is so high the brand can ignore their bitching and get on with the business of banking billions as efficiently as possible. The gold Explorer is the way forward.