AP rapid price hikes. Trouble ahead?

[NYG1121]

First off, I am a current AP owner/lover and have owned plenty in the past (I once sold a 15400st in 2017 for 16k because it didn’t fit well lol).

My worry is that they raised prices so fast assuming demand for these very high MSRP watches will never be impacted. Right now, I can tell you no one in my circle wants to buy any watch, nevermind one that is 30k +. What will happen once there are no buyers at the AD/boutique? This is exactly what happened to panerai and I hope it doesnt happen to my favorite brand. Sometimes devaluation of a brand is so powerful that they never recover. Is AP facing some serious headwinds?

[GoWarriors]

The switch from concern over not being able to buy direct because prices were too low, to concern about prices being too high… it’s giving me whiplash!

Valid though the concerns may be!

I don’t see anyone listing RO’s near retail yet, inflation is still accelerating economy wide…

I feel like AP has a great brand, they should be able to weather a storm better than most boutique luxury brands I’d think?

[HMHM]

With AP being independent, they can control the supply tap and manage accordingly. Interesting to see how things play out.

[macrowatch]

I don't think so, at least not at the moment. I mean credit crises could ensue, more painful economic cycle that impacts everyone, but if that happens, then we all have bigger problems.

Ignoring secondary market values, I don't think base RO going from 20k to 25k is really that scary of a price hike for the brand in the luxury segment. Maybe 26k to 32k on time only Code may be an issue, but I mean PM ROC versus Patek chrono? I'd take the AP personally as a 'value' purchase.

And of course I say all of that with the belief that there's going to be a low more economic pain in store in another 12 months after debt service payments reflect the higher rates. Not to mention utility and petrol costs!

I find current leadership of AP to be very competent with a good relationship to the ownership. In this I trust until the CEO changes or they do a SwatchxAP bioplastic collab.

[VogelPhoenix]

They didn't hike prices for the 15510, so maybe they're treading carefully while this shakes out. Or they might decide that their real target clientele is immune to economic turbulence, which might or might not be a miscalculation. It will be really interesting to see how much real demand there is, vs people buying based on a no-lose theorem suggesting that anything vaguely desirable will skyrocket in value once it leaves the store.

I *think* I'll keep buying if something on my wishlist becomes available, but who knows what things look like in 6 months or so.

[whiterabbit66]

Originally Posted by NYG1121

First off, I am a current AP owner/lover and have owned plenty in the past (I once sold a 15400st in 2017 for 16k because it didn’t fit well lol).

My worry is that they raised prices so fast assuming demand for these very high MSRP watches will never be impacted. Right now, I can tell you no one in my circle wants to buy any watch, nevermind one that is 30k +. What will happen once there are no buyers at the AD/boutique? This is exactly what happened to panerai and I hope it doesnt happen to my favorite brand. Sometimes devaluation of a brand is so powerful that they never recover. Is AP facing some serious headwinds?

Everyone I know still would love one at retail. Most AP buyers are in a different league to Rolex/Paneri etc and not impacted by day to day drama. I can't ever see a scenario where they can't sell everything they make at retail.

[macrowatch]

Originally Posted by whiterabbit66

Everyone I know still would love one at retail. Most AP buyers are in a different league to Rolex/Paneri etc and not impacted by day to day drama. I can't ever see a scenario where they can't sell everything they make at retail.

Very easy actually. If you show up at a dinner party and rather then 5/10 guests wearing submariners everyone shows up wearing a SS RO...the trend and tastes will change among that crowd. In the sense IMHO, Patek and AP (and to a lesser extent Rolex) need each other to be strong for enough diversity.

[whiterabbit66]

Originally Posted by macrowatch

Very easy actually. If you show up at a dinner party and rather then 5/10 guests wearing submariners everyone shows up wearing a SS RO...the trend and tastes will change among that crowd. In the sense IMHO, Patek and AP (and to a lesser extent Rolex) need each other to be strong for enough diversity.

There are millions of Rolexs out there and very few AP' or Pateks. Totally different game.

[Jp28]

Originally Posted by whiterabbit66

There are millions of Rolexs out there and very few AP' or Pateks. Totally different game.

Not a different game at all. Just different price points.

[macrowatch]

Originally Posted by whiterabbit66

There are millions of Rolexs out there and very few AP' or Pateks. Totally different game.

I agree generally, but when this game is pursued by the the 1% or even 5%, everyone has the means if they so chose to gray or retail buy everything in sight. The only question is one of brand trends and at what point does the crowd find it distasteful to wear the same thing as everyone else.

I'm not saying this is happening, only that I see if this moment occurs that the status seeking crowd might veer their tastes in other directions.

[Sandpit]

Originally Posted by whiterabbit66

There are millions of Rolexs out there and very few AP' or Pateks. Totally different game.

It’s probably relative though. There will be millions more people that can afford Rolex than could afford AP or Patek.

There’s also the fact that to a (probably) overwhelming percentage of people that spending $20k plus on a watch is bordering on insanity.

[Rolexguy$]

I don't really a cause for alarm here. Those that are in the AP league are not or should not be affected by whatever is happening out there IMO.

Besides it's a big brand and at such they ought to know how to handle it if it comes to that. I'm fairly confident the story of Panerai won't repeat itself here.

[Jp28]

Originally Posted by Rolexguy$

I don't really a cause for alarm here. Those that are in the AP league are not or should not be affected by whatever is happening out there IMO.

Besides it's a big brand and at such they ought to know how to handle it if it comes to that. I'm fairly confident the story of Panerai won't repeat itself here.

There seems to be short memories around here. It was not that many years ago AP dropped price on a lot of models as they had over priced. So they have made pricing mistakes before (and not long ago).
Panerai has a completely different issue around the brand.

[dchang81]

Originally Posted by Jp28

There seems to be short memories around here. It was not that many years ago AP dropped price on a lot of models as they had over priced. So they have made pricing mistakes before (and not long ago).
Panerai has a completely different issue around the brand.

Yea when they had the 30% price cut for PM pieces everyone's heads exploded.

[VogelPhoenix]

Originally Posted by Rolexguy$

I don't really a cause for alarm here. Those that are in the AP league are not or should not be affected by whatever is happening out there IMO.

People whose multi-million fortune was invested in Luna or held by Celsius might think differently. Someone recently propelled into the top 1% by their Ethereum holdings will now be back with the unwashed (upper middle class) masses. Lots of interesting lessons being learned right now.

[texasmade]

Originally Posted by VogelPhoenix

People whose multi-million fortune was invested in Luna or held by Celsius might think differently. Someone recently propelled into the top 1% by their Ethereum holdings will now be back with the unwashed (upper middle class) masses. Lots of interesting lessons being learned right now.

Jake Paul agrees with you.

[mickyd329]

Originally Posted by VogelPhoenix

People whose multi-million fortune was invested in Luna or held by Celsius might think differently. Someone recently propelled into the top 1% by their Ethereum holdings will now be back with the unwashed (upper middle class) masses. Lots of interesting lessons being learned right now.

Agree. Lots of lessons being learned for sure.

[NYG1121]

APs were selling for peanuts a short 4 years ago. This current climate has not been the norm so that is why I am worried it may go back to that and no one wants to buy a 30k watch that is worth 20k or less

[AperolSpritz]

Originally Posted by NYG1121

APs were selling for peanuts a short 4 years ago.

I do agree times were different, but let's maybe not get ahead of ourselves...

[Goupax]

Their price structure is all screwed up, someone needs to explain to me how they can justify charging more money for a ROO on a rubber strap than a RO or ROC on their iconic bracelet. Surely you don't pay such a premium just because the watch is bigger right?

[BatteryVoltas]

Originally Posted by Goupax

Their price structure is all screwed up, someone needs to explain to me how they can justify charging more money for a ROO on a rubber strap than a RO or ROC on their iconic bracelet. Surely you don't pay such a premium just because the watch is bigger right?

Don't be ridiculous. You're getting more watch, of course you must pay more!

/s

[whiterabbit66]

Originally Posted by Goupax

Their price structure is all screwed up, someone needs to explain to me how they can justify charging more money for a ROO on a rubber strap than a RO or ROC on their iconic bracelet. Surely you don't pay such a premium just because the watch is bigger right?

I recently got the new 43 ROO and it actually feels like a better quality product to me compared to my RO. The ceramics, movement and other parts like pushers are out of this world. I was shocked how good it is.

[vliberman]

APs reliance on effectively one model (various iterations of RO) could be disastrous for its prospects in downturn as most people who want one have one. Most of the interest in the 3rd or 4th watch is direct result of the hype and perception that value would hold. From that standpoint, I think AP is the least equipped to withstand downturn if it comes. Let’s not forget that about 5 years ago Patek had to reduce price of SS 5711 from roughly 26.5k to 24.5k.

[Reign]

Originally Posted by vliberman

APs reliance on effectively one model (various iterations of RO) could be disastrous for its prospects in downturn as most people who want one have one. Most of the interest in the 3rd or 4th watch is direct result of the hype and perception that value would hold. From that standpoint, I think AP is the least equipped to withstand downturn if it comes. Let’s not forget that about 5 years ago Patek had to reduce price of SS 5711 from roughly 26.5k to 24.5k.

They’ll just cut production to eek a small gain to maintain the allure of the brand. The benefit of being a privately owned family run company is you don’t have public shareholders to please and demonstrate perpetual growth.

They’re fine with secondary prices falling, they’re not in the business of handing flippers buckets of cash for every transaction. Their ideal world is the watch hovers around msrp and gradually appreciates over time, not have 2x+ MOICs when they walk out the door

[macrowatch]

Originally Posted by vliberman

APs reliance on effectively one model (various iterations of RO) could be disastrous for its prospects in downturn as most people who want one have one. Most of the interest in the 3rd or 4th watch is direct result of the hype and perception that value would hold. From that standpoint, I think AP is the least equipped to withstand downturn if it comes. Let’s not forget that about 5 years ago Patek had to reduce price of SS 5711 from roughly 26.5k to 24.5k.

I'm OCD and indecisive, which means I want one of every dial color of the style I want to complete the collection for the sake of completing it. I may have some mental issues....

It doesn't help when I see what Reign is sporting.

[Turbo Racer]

Originally Posted by macrowatch

I'm OCD and indecisive, which means I want one of every dial color of the style I want to complete the collection for the sake of completing it. I may have some mental issues....

It doesn't help when I see what Reign is sporting.

I seem to be struck with the same affliction lol.

To the above comments, I went to a local ap shop today. Was appointment only. I was given a card and told to go online and make an appointment. I was a bit put off by that.

To be fair, I also visited Rolex and vc and Patek today. Rolex had nothing for sale, Patek was the nicest to me but only had a pocket watch for sale. Yep, a trusty pocket watch. Vc had plenty of watches for sale but some guy with a poorly fitting suit told me it was a 5 year wait for an overseas. I was borderline offended. Disappointed with the overall attitude of all of them except Patek.

[Jp28]

Originally Posted by vliberman

APs reliance on effectively one model (various iterations of RO) could be disastrous for its prospects in downturn as most people who want one have one. Most of the interest in the 3rd or 4th watch is direct result of the hype and perception that value would hold. From that standpoint, I think AP is the least equipped to withstand downturn if it comes. Let’s not forget that about 5 years ago Patek had to reduce price of SS 5711 from roughly 26.5k to 24.5k.

There seems to be short memories around here. It was not that many years ago that AP was making plenty of profit without all the hype and even with price discounts/drops.

[gretch6364]

Originally Posted by Jp28

There seems to be short memories around here. It was not that many years ago that AP was making plenty of profit without all the hype and even with price discounts/drops.

Exactly. If for some reason they have to drop prices on some models, who cares? If AP has to do it, everyone else will as well.

I hope all the people in it for flipping and making profit walk away for a bit. There will be happy people lined up to buy the watches they love. Sure, some models will suffer, but that is more normal then what has happened the last 5 years.

Also...I guarantee the number of people that get tired of the RO because everyone in their circle has one is very very rare.

[macrowatch]

Originally Posted by gretch6364

Exactly. If for some reason they have to drop prices on some models, who cares? If AP has to do it, everyone else will as well.

I hope all the people in it for flipping and making profit walk away for a bit. There will be happy people lined up to buy the watches they love. Sure, some models will suffer, but that is more normal then what has happened the last 5 years.

Also...I guarantee the number of people that get tired of the RO because everyone in their circle has one is very very rare.

As long as we agree when I’m in Aspen that you don’t wear yours on Monday Wednesday, Saturday, we can stay friends! Lol.

[gretch6364]

Originally Posted by macrowatch

As long as we agree when I’m in Aspen that you don’t wear yours on Monday Wednesday, Saturday, we can stay friends! Lol.

Haha. I have honestly seen more people walking around town in the last year wearing 5711 then Royal Oaks. Don't think I have even seen a blue dial Jumbo in the wild around town.