Rolex won't go bust but will dealers stop stocking

[baldyspoon]

With the credit crunch biting and now two big names gone bust will dealers cut back on what they stock and pssibly stop stocking Rolex?. I had a dealer who stocked breitling but last month he had none and when asked he said that he could'nt afford to keep them in stock as not selling enough to cover costs and display is this the way things are going and what brands will it effect

[Bisquitlips]

I don't think that Rolex AD's have a choice. I have heard that in order to be a Rolex AD and keep your AD credentials, you must purchase whatever Rolex demands. Simply stated, you either buy stock or they take away your authorized dealership.

If this is incorrect, please correct.

[Tools]

I don't think that Rolex will pull dealerships because their product is not moving as fast as it was last year.. I'm pretty sure that they will know their world demand and adjust their output accordingly..

[2careless]

Originally Posted by Tools

I don't think that Rolex will pull dealerships because their product is not moving as fast as it was last year.. I'm pretty sure that they will know their world demand and adjust their output accordingly..

You reckon?
There are always a queue of suckers willing to tell Rolex how fast they can move their stock. Personally I see Rolex as very ruthless in cutting non-performing ADs or ADs with multiple loyalties.

[f16570]

Agree with 2careless. Think that if Rolex are not happy with your performance then tough.

[baldyspoon]

Originally Posted by 2careless

You reckon?
There are always a queue of suckers willing to tell Rolex how fast they can move their stock. Personally I see Rolex as very ruthless in cutting non-performing ADs or ADs with multiple loyalties.

Have to agree spoke to a Rolex dealer near my Omega dealer about current climate and he was saying they still have to buy a set amount of watches even if they are not selling their stock and in the current climate if things don't improve he is going to stop stocking Rolex as can't afford to keep buying but not selling

[John685]

I spoke with the owner of a very high end jewelry store recently and mentioned that he should carry the Rolex line. He said he looked into it but didn't like their terms.

They (Rolex) required he carry a specific amount of stock but the deal breaker was requiring a Rolex trained watchmaker on staff. He didn't want additional personnel just because he was adding a watch brand to his store.

If times get real hard that additional body (watchmaker) could be expendable and this would also eliminate some costly inventory.

[scooba]

I was told by my Rolex ad that every month you are offered a shipment of approx £100k worth of stock that they choose for you and from the twelve deliverys in a year you can only decline two of them .They can also order extra stock ie specific items they require for clients on top of the monthly allocation.

And my ad bought the store two years ago from the previous owners and he said he had to install a watchmaker within two years or the Rolex franchise could be removed .

TBH Rolex are obviously very clever ! who else in this economic climate would get away with two huge increases on mrp in the space of about 8 months i think 10% in april and 12% in october from memory

[chazha]

ADs are having a tought time in this climate.
an AD told me they should get 2 shipments before X mas. I might get my GV after being on a waiting list for a week :-D

[herfdude]

Two of the AD's I deal with frequently have simply started offering some discounts to new customers and even bigger discounts to their regular customers. Typically in years past I have always been able to purchase SS Daytonas but I had to pay full retail. Now I can buy a Daytona at 20% off.

Two weeks ago I went in to see and try on the new DSSD (he had two in stock) and I was offered a 30% discount for cash or check (i.e. no credit card).

My guess is that more and more AD's will have to resort to these tactics to help move their inventory........

[Bisquitlips]

Originally Posted by herfdude

Two of the AD's I deal with frequently have simply started offering some discounts to new customers and even bigger discounts to their regular customers. Typically in years past I have always been able to purchase SS Daytonas but I had to pay full retail. Now I can buy a Daytona at 20% off.

Two weeks ago I went in to see and try on the new DSSD (he had two in stock) and I was offered a 30% discount for cash or check (i.e. no credit card).

My guess is that more and more AD's will have to resort to these tactics to help move their inventory........

I think the current economic climate will prune ADs from the Rolex line. Within 1 year I expect a couple of ours to fall on hard times and get sick of the Rolex marketing people attempting to pummel them into submission.

Should be a good time for some great deals. Perhaps even some models at cost.

[lawrenceb]

Watch manufacturers, Rolex included will adjust their production due to the economic conditions. Loading up dealers with products they can't move will damage the market even more.

[herfdude]

Originally Posted by Bisquitlips

I think the current economic climate will prune ADs from the Rolex line. Within 1 year I expect a couple of ours to fall on hard times and get sick of the Rolex marketing people attempting to pummel them into submission.

Should be a good time for some great deals. Perhaps even some models at cost.

If I were a Rolex dealer I would exhaust all options including selling at or near cost just to retain my Rolex dealer status until economic times get better.......

[onkyo]

the next year or more will be a great opportunity for Rolex buyers to expand their collection.

[ArizonaHD]

Originally Posted by herfdude

If I were a Rolex dealer I would exhaust all options including selling at or near cost just to retain my Rolex dealer status until economic times get better.......

Why bother, things have been headed south for over a year, the last 6 months have been harsh. I am getting Rolex's in left and right, my problem is no buyers and an eroding resale value. If I was an AD I'd drop Rolex and possibly Omega if the product was not moving. There is a better margin to be made in Baume Mercier, Audemars, Piaget, Concord, Tag, etc. The price increases are crazy, but its all marketing and perception

[wzz]

The marketing team at RLX is quite smart and has been able to weather economic storms in the past.


Lately (the last 7-8 years) I have noticed that RLX has been releasing too many excess timepieces rather then controlling the amount of production/release.



For RLX to continue to be strong, they must always have 1 less watch then the people need.

Example: SS Daytona craze.

[ArizonaHD]

Originally Posted by wzz

The marketing team at RLX is quite smart and has been able to weather economic storms in the past.


Lately (the last 7-8 years) I have noticed that RLX has been releasing too many excess timepieces rather then controlling the amount of production/release.



For RLX to continue to be strong, they must always have 1 less watch then the people need.

Example: SS Daytona craze.

Unfortunately my friend, I think this economic crisis is going to be unlike anything we have ever seen. We are just in the beginning, I really hope I am wrong but everything I am reading, watching and observing in my P&L business is indicating a rough road ahead.

Producing 1 less was Enzo Ferrari's motto, but he lost control to Fiat in '69. Rolex will survive no doubt, but remember the slow down periods in the past were when Rolex was a much smaller company and their price point in relation to the market and inflation was much lower.

Rolex has a huge built in profit margin, they could sell 1/4 of their production and still make a huge profit, and it’s not GM making a depreciating asset on a 2% margin. A Platinum DD has less than 2,500 in platinum content and sells for 50,000 or $30,000 @ 60%, how much does it really cost to produce a SS sub....

[baldyspoon]

Originally Posted by lawrenceb

Watch manufacturers, Rolex included will adjust their production due to the economic conditions. Loading up dealers with products they can't move will damage the market even more.

You would think this but the two AD's I spoke to both said the are still having to buy in the same amount of watches as set by Rolex even if they are not selling and both say that if things don't change they probaly won't be selling Rolex in six months time as not prepaired to put the rest of their buisness at risk

[oztimelord]

As scary as it sounds I think a correction is good for the watch industry, Rolex wears the crown and as such needs to increase prices, cut production and no of ADs.

Rolex is a trust so can weather the storm, all I can say GOOD LUCK to listed watch companies.

Hope I'm wrong

[wzz]

The brand needs to remain exclusive, so price cuts don't look good to the average Joe.