Market is Softening

[Bizcut1]

Market Update - Update is 10/1

The price of pre-owned Rolex watches has been falling, with the WatchCharts Rolex index dropping 31% since its peak in March 2022. The Bloomberg Rolex Market Index has also fallen 40%.

Increased inventory

The number of new in-box Rolexes for sale on Chrono24 has doubled since mid-2022. This is due to lower sales, as both listed and sold volumes have fallen.

Factors contributing to the decline

Some factors that may be contributing to the decline include a sluggish economy, rising interest rates, and subdued consumer spending.

Buyer-friendly climate

The market is currently more buyer-friendly, with some Rolex models available for less than retail price.

[train-time]

Good to know!

[brandrea]

I thought interest rates are coming down

[Bizcut1]

Buying time is approaching, gents...pun intended....

[Goldmansockz]

I think the blind-hype days of DJs selling for 40% over list are coming to an end. Even Subs are approaching MSRP though the Daytona and GMT prices are still holding steady. Someone recently posted about how Batgirl premiums are coming down but I'm not seeing a ton of downward movement in the last few months here in the US.

Had a laugh with a friend recently over how he bought a two-tone explorer from an AD in 2022, wore it for 6 months everyday and then sold it at a profit. In a lot of ways, the market peak was better for those looking to establish purchase history as they could buy literally any model and sell it at a profit.

Hopefully things get better from here but I don't think the market is much better off than where it's been on average in the last year for the SS sports models (black Sub aside).

[majidessa]

There is also the fact that Rolex produces around 1.2 million watches a year which is quite alot for a luxury brand, production has increased by 25% prior to covid.

In addition flippers have become almost extinct with the market softening, and hot pieces are now offered to vip clients with strong profile and purchase history.

What needs to be seen what marketing strategy Rolex will apply as either wait lists will mostly disappear and AD cases will be filled again with most models or Rolex might try to come with something new to reignite hype, the next 12 months will be crucial.

There is also the fact that with market softening Rolex CPO will disappear soon

[Kevin of Larchmont]

Originally Posted by majidessa

There is also the fact that with market softening Rolex CPO will disappear soon

Facts can be proven. Go for it.

[SLWoodster]

Rolex doesn't need to re-ignite hype.

Secondary market demand does not accurately gauge retail market demand. Just because a watch on secondary is selling below retail price doesn't mean anyone can just walk in and grab that one config at anytime. We're pretty far from that. Seems everyone forgot, there were almost no stainless sports watches in the case in 2019 aside from an air king or explorer 2 here and there. We also don't know what Rolex considers a healthy inventory turnover. Is that... 7 days in inventory? 30 days in inventory? 100 days in inventory? Also if anything, it can just discount like it has done for 114 years of it's 119 years of existence. These companies generally think in decades, not like regular consumers thinking about how the next 12 months is crucial for Rolex... lol. Sales have steadily grown over its 115 years of existence before the 2020-2024 hype. To forecast a 119y brand using the last 4y is extremely short sighted.


Rolex CPO is not going away.

Maybe they'll lower prices, offer additional warranty, there's a lot of incentives that preowned car dealers can use and Rolex has yet to market and use any of those additional incentives. When ADs sell preowned Rolexes before CPO, they have pretty much always sold for higher than gray dealers, citing brick and mortar costs.

Originally Posted by majidessa

There is also the fact that Rolex produces around 1.2 million watches a year which is quite alot for a luxury brand, production has increased by 25% prior to covid.

In addition flippers have become almost extinct with the market softening, and hot pieces are now offered to vip clients with strong profile and purchase history.

What needs to be seen what marketing strategy Rolex will apply as either wait lists will mostly disappear and AD cases will be filled again with most models or Rolex might try to come with something new to reignite hype, the next 12 months will be crucial.

There is also the fact that with market softening Rolex CPO will disappear soon

This is happening in pretty much all collectible markets where the mass market stuff that people were gobbling up during covid have been dropping. This is also the time to re-evaluate what an "investment watch" actually is. Actually rare watches are still breaking records. The upcoming November auctions will show the Rainbow daytona breaking records. In 2023. That milgauss with bezel, platinum yachtmaster, and daytona gemset 6290 were purchased for over $3m. Marlon Brandon's GMT came back up for auction. It quadrupled in price in 4 years.

Originally Posted by Bizcut1

Market Update - Update is 10/1

The price of pre-owned Rolex watches has been falling, with the WatchCharts Rolex index dropping 31% since its peak in March 2022. The Bloomberg Rolex Market Index has also fallen 40%.

Increased inventory.

The number of new in-box Rolexes for sale on Chrono24 has doubled since mid-2022. This is due to lower sales, as both listed and sold volumes have fallen.

Factors contributing to the decline

Some factors that may be contributing to the decline include a sluggish economy, rising interest rates, and subdued consumer spending.

Buyer-friendly climate

The market is currently more buyer-friendly, with some Rolex models available for less than retail price.

[EverCloserUnion]

Originally Posted by SLWoodster

Rolex doesn't need to re-ignite hype.

Secondary market demand does not accurately gauge retail market demand. Just because a watch on secondary is selling below retail price doesn't mean anyone can just walk in and grab that one config at anytime.

The correlation will be extremely high in any market with minimal commoditisation. And this is particularly true of Rolex given the quality of perceived brand 'uniqueness'.

There's an obvious positive correlation between MSRP/Grey spread and AD availability.

Luxury watches that are available on a 'click-to-buy' or routine 'walk-in' basis have a resale value that is typically 30% or more below new.

[Sublovin]

Originally Posted by TheVision

Well....its not as simple as that.

Grey market prices are still NOT budging. Gmt, sub, daytona are still holding and fetching premiums....heck, even '23 datejust with smooth bezel are averaging $10k in grey market.

What has changed is private sales. Most models are no longer fetching premiums so people who wanna buy at retail and quickly do private sales are taking heavy losses so flippers are no longer after datejusts, explorer, precious metal anymore.

Grey market resellers (like the ones listed here..lol) are in overstock or '23''24 stock that they OVERPAID and now can't sell for under. Hence grey market prices are firm.

I sold my LV sub to bobswatches back in '22 (lost my job back then) and they overnighted $21k for a used sub!! Now they aren't even accepting trade-ins on LV sub as grey market LV prices is now at $15k.

But AD stock is definitely better ...I've seen a gradual increase of "I got the call" threads over at Reddit and even for people with no spend history.

With Rolex upping production in their new factories next year, the stock is only going to get better at AD. I don't think we'll return to pre Covid but getting sports models at retail won't be like pulling a tooth with rusty pliers.

This is a really good post. I will disagree about grey market pricing. While I agree that most grey dealers are currently sitting on a lot of inventory that they are under water on, at some point that “standing firm” comes to an end. Many grey dealers (like many businesses in any industry) have real money tied up in inventory. Maybe it’s private equity, maybe it’s a line of credit, but at some point they need to churn inventory, even if it means a loss (see the used car market).

I think your Bobs watches scenario says A LOT. The ride is over.

Originally Posted by TheVision

Yep. I own 2 rentals in CA and despite prices stalling earlier in the year, they are still at double what I bought them for. I don't think CA real estate is dipping anytime soon...if anything, its only going up as CA is the hub of big income earners (software guys making around $300k with WFH jobs).

Not to make this about RE, but I don’t know how you make money on rentals in many parts of California. Also, $300,000 is certainly not a big income earner in the areas I’m thinking about. If you’re in the tech areas, 300,000 and you’re eating Ramen noodles.

Originally Posted by SLWoodster

Rolex doesn't need to re-ignite hype.

Secondary market demand does not accurately gauge retail market demand. Just because a watch on secondary is selling below retail price doesn't mean anyone can just walk in and grab that one config at anytime. We're pretty far from that. Seems everyone forgot, there were almost no stainless sports watches in the case in 2019 aside from an air king or explorer 2 here and there. We also don't know what Rolex considers a healthy inventory turnover. Is that... 7 days in inventory? 30 days in inventory? 100 days in inventory? Also if anything, it can just discount like it has done for 114 years of it's 119 years of existence. These companies generally think in decades, not like regular consumers thinking about how the next 12 months is crucial for Rolex... lol. Sales have steadily grown over its 115 years of existence before the 2020-2024 hype. To forecast a 119y brand using the last 4y is extremely short sighted.



This is happening in pretty much all collectible markets where the mass market stuff that people were gobbling up during covid have been dropping. This is also the time to re-evaluate what an "investment watch" actually is. Actually rare watches are still breaking records. The upcoming November auctions will show the Rainbow daytona breaking records. In 2023. That milgauss with bezel, platinum yachtmaster, and daytona gemset 6290 were purchased for over $3m. Marlon Brandon's GMT came back up for auction. It quadrupled in price in 4 years.

To the contrary of what you posted, I think the secondary market has a large effect on a company that sells as many widgets as Rolex. On the flipside, you use very specific, one off examples, to support that the market is strong. I don’t think a watch owned by Marlon Brando selling at auction has anything to do With the state of the overall Rolex market. The secondary market dipping will absolutely turn away speculators, investors, and gray market dealers who have been gobbling them up as new. This will allow more of the average consumer who is just looking for “a watch” to walk in and purchase one at retail, thus driving down the secondary demand, and along with it the prices. Rolex has always had a very strong secondary market and has been a safe place to keep your money. I think that will certainly continue, but this ridiculous bubble of selling over retail for mass produced, still in production pieces, is gladly coming to an end in my opinion.

[Marcjvr]

Originally Posted by majidessa

There is also the fact that Rolex produces around 1.2 million watches a year which is quite alot for a luxury brand, production has increased by 25% prior to covid.

In addition flippers have become almost extinct with the market softening, and hot pieces are now offered to vip clients with strong profile and purchase history.

What needs to be seen what marketing strategy Rolex will apply as either wait lists will mostly disappear and AD cases will be filled again with most models or Rolex might try to come with something new to reignite hype, the next 12 months will be crucial.

There is also the fact that with market softening Rolex CPO will disappear soon

Curious to hear how hot pieces were moved by ADs in the past if selling to VIPs is the new plan?

[Manamana]

Originally Posted by Marcjvr

Curious to hear how hot pieces were moved by ADs in the past if selling to VIPs is the new plan?

Mostly to grey. Grey purchase agreed quantity of not so popular models at discount, and get hot models to sell over retail, but not at these current ridiculous prices. Some ADs grey dealers are actually the biggest VIPs

[Flipmarine2k]

I see this happening as well, I finally got allocated a OP36 green from an AD with zero spend. In LA/OC area! Sold my OP41 i bought grey in Hong Kong, while im still able to get profit over the retail price. OP's are slow right now according to my AD and what i see in Moda groups. According to my SA Everyone asking for the same Sub/GMT/ daytona.

[Mate1974]

The update highlights a significant correction in the Rolex pre-owned market, showing a decline of up to 40% in the Bloomberg Rolex Market Index since its March 2022 peak. The increased inventory, especially on platforms like Chrono24, where the number of new in-box Rolexes has doubled, reflects slower sales and decreased demand. Contributing factors such as a sluggish economy, rising interest rates, and reduced consumer spending have created a more buyer-friendly environment, where some models are now selling below retail price.

[INC]

"The HYPE is gone, the song is over
Thought I'd something more to say"

[cdmorenot]

Dang! Now I'm going to have to hold on to all these "investment" watches I purchased not long ago. Wife is going to be pissed off. Can't lock in the losses.

[Robf52]

Originally Posted by cdmorenot

Dang! Now I'm going to have to hold on to all these "investment" watches I purchased not long ago. Wife is going to be pissed off. Can't lock in the losses.

[Calatrava r]

I am not seeing much change at the ADs I know. Still nothing for sale with every watch coming in pre-sold. With the used market softening to where a newish complete watch can be bought at list or just even below, that is the way to go to avoid the wait and uncertainty at ADs.

[Sublovin]

As we knew it would! The bubble is deflating and the IG crowd and speculators can move on to something else.
My favorite AD is now jam packed with “exhibition” pieces with more to come behind those. Great for us true fans of the brand and of watches. Bad news for the hype sheep

[jacowestt]

Thanks for the update! It’s interesting to see the significant decline in pre-owned Rolex prices, especially with the WatchCharts index down 31% and the Bloomberg index dropping 40%. The increase in inventory on Chrono24 suggests that many collectors are feeling the pressure from lower demand.

The current economic factors like rising interest rates and subdued consumer spending certainly play a role. It’s a buyer-friendly climate, which could be a great opportunity for those looking to add to their collections or snag a model below retail. It’ll be intriguing to see how the market evolves in the coming months!

[inadeje]

What’s that saying again? “All bad things must come to an end”?

Can someone tell the grey dealers to also hammer down the 5980 rose?

[alphadweller]

Makes no difference to me, for all intends and purposes. The day I can walk out with any watch (bar the Daytona), then maybe things will have changed.

[JRell]

It’s over, it has been a great ride! Well done all.

[garyk]

Originally Posted by JRell

It’s over, it has been a great ride! Well done all.

[Porscheconvert]

I just paid 21 for a Pepsi. Shopped it around and really tried hard to get one for less.

Agree economy is bad, but not rolex economy..l

[Watchsprings]

“What goes up, must come down.”

[Porscheconvert]

Originally Posted by Watchsprings

“What goes up, must come down.”

Tell that to people still holding out for real estate prices to drop on west coast!

[TheVision]

Originally Posted by Porscheconvert

Tell that to people still holding out for real estate prices to drop on west coast!

Yep. I own 2 rentals in CA and despite prices stalling earlier in the year, they are still at double what I bought them for. I don't think CA real estate is dipping anytime soon...if anything, its only going up as CA is the hub of big income earners (software guys making around $300k with WFH jobs).

[Hollie_Rollie]

Originally Posted by Porscheconvert

I just paid 21 for a Pepsi. Shopped it around and really tried hard to get one for less.

Agree economy is bad, but not rolex economy..l

My condolences


Sent from my iPhone using Tapatalk

[Porscheconvert]

Originally Posted by Hollie_Rollie

My condolences


Sent from my iPhone using Tapatalk

lol.