45 US Patek dealers headed to 32 by end of the year

[Gebbeth]

They are all headed to very limited numbers of boutique stores that are owned or co-owned by the watchmakers.

Rolex is headed this way after their Bucherer purchase, and Patek would have done something similar had Rolex not moved first.

The days of the independent AD selling high end popular models are dead.

HOWEVER, the history of brands thinking they can do this on their own and rub their noses at their retail partners are littered with failures.

Nike lost a ton of market value and sales when they tried to do the same, and now they are going back, hat in hand, when market sentiment changed toward other brands like Hoka, New Balance, Brooks, ASICs, etc. The consumer also got sick of $300 to $God Knows What priced limited edition kicks that strangely the same secondary players were snatching up and reselling for many times their retail prices.

Sound familiar?

These watch brands really need to watch out what they are doing to their customer and distribution base.

[scurfa]

I agree they are crazy, I’m sacked from Patek but the latest offerings are woeful, I will never buy another Nike product ever you have loads of new up and coming brands to choose from, time to move on.


Sent from my iPhone using Tapatalk

[dpj17]

Originally Posted by Gebbeth

They are all headed to very limited numbers of boutique stores that are owned or co-owned by the watchmakers.

Rolex is headed this way after their Bucherer purchase, and Patek would have done something similar had Rolex not moved first.

The days of the independent AD selling high end popular models are dead.

HOWEVER, the history of brands thinking they can do this on their own and rub their noses at their retail partners are littered with failures.

Nike lost a ton of market value and sales when they tried to do the same, and now they are going back, hat in hand, when market sentiment changed toward other brands like Hoka, New Balance, Brooks, ASICs, etc. The consumer also got sick of $300 to $God Knows What priced limited edition kicks that strangely the same secondary players were snatching up and reselling for many times their retail prices.

Sound familiar?

These watch brands really need to watch out what they are doing to their customer and distribution base.

This is a wonderful analogy and spot on. Not to mention, these brands set a lot of this in motion when the market was in full mania mode. Now they are opening up stand alone stores in the middle of a significant downturn where inventory is starting to back up everywhere. I understand the want to control the retail aspect of your business and "know" your csutomer inside and out. However, having that wholesale client, ie. AD's, you are guaranteed to sell everything you make at a certain % every single year, even in a downturn. We shall see where this goes but I agree with the post above, this is going to get very dicey very soon.

[LJubel328]

Originally Posted by Gebbeth

They are all headed to very limited numbers of boutique stores that are owned or co-owned by the watchmakers.

Rolex is headed this way after their Bucherer purchase, and Patek would have done something similar had Rolex not moved first.

The days of the independent AD selling high end popular models are dead.

HOWEVER, the history of brands thinking they can do this on their own and rub their noses at their retail partners are littered with failures.

Nike lost a ton of market value and sales when they tried to do the same, and now they are going back, hat in hand, when market sentiment changed toward other brands like Hoka, New Balance, Brooks, ASICs, etc. The consumer also got sick of $300 to $God Knows What priced limited edition kicks that strangely the same secondary players were snatching up and reselling for many times their retail prices.

Sound familiar?

These watch brands really need to watch out what they are doing to their customer and distribution base.

You explained the dynamic so eloquently. I had not thought of the Nike dtc failure as an analogy. It’s certainly possible this could happen with AP and PP as well, though we will never fully quite know how this strategic shift is panning out since they are privately owned.


Sent from my iPhone using Tapatalk

[texasmade]

Originally Posted by LJubel328

You explained the dynamic so eloquently. I had not thought of the Nike dtc failure as an analogy. It’s certainly possible this could happen with AP and PP as well, though we will never fully quite know how this strategic shift is panning out since they are privately owned.


Sent from my iPhone using Tapatalk

Being privately owned is a huge advantage though for Rolex, AP, and PP. If product demand really drops, they can cut production and live with the lower sales for awhile. Provided these brands stashed away enough cash to survive they should be okay with lowering demand.

Nike can't/couldn't lower production since they have the pressure of ever increasing sales from being publicly traded.

[scarlet knight]

Originally Posted by ChetBaker

I was visiting Manhattan earlier this week and on my way back from the VC Flagship dropped into Bucherer and noticed they had hardly anything to sell. They did have a couple nice Mosers though. Watches of Switzerland at Hudson Yards had a much better selection when I dropped in earlier the same day.

Much different than my other Rolexes. Would never trade my Calatrava.

[Bosscheto]

I could be wrong, but living in Switzerland, we hear different things. Allegedly, PP wants to decrease the points of sale, but increase the number of watches per points of sale. So they prefer smaller number of ADs but a much larger selection of watches. With regards to rare watches - the application process is well established, so I see no changes there. They just added the in demand not rare watches - sports watches into the same process. Sometimes when I travel, I see in big cities - two different PP ADs on the same big commercial street, and it does not make much sense. Also, what I have noticed often Mono Brand boutiques are actually JV with a local AD - Breitling does this, ALS does this as well - mono brand boutique but run by Bucherer for example. What also we hear in Switzerland is that now PP demands watches to be focused on local based clients, and the rumour is that the ADs are very very careful because the power of the brand is huge. Take this with a pinch of salt. PP and especially Rolex are completely closed and nothing leaks, so most of this are speculations.

[Gebbeth]

Originally Posted by texasmade

Being privately owned is a huge advantage though for Rolex, AP, and PP. If product demand really drops, they can cut production and live with the lower sales for awhile. Provided these brands stashed away enough cash to survive they should be okay with lowering demand.

Nike can't/couldn't lower production since they have the pressure of ever increasing sales from being publicly traded.

Certainly there is less pressure on privately owned brands.

But money is money, and cashflow is cashflow.

You can't cut production to nothing and expect to have income flowing through. Even idle factories cost money, and the more you don't produce, the more these become wasting assets. Factories are like people....when they are in motion, they can be efficient and healthy. When idle for long periods of time, things start to break down (get out of shape so to speak), and getting them back up and running (no pun intended) takes more effort, costs more, and is just harder to do.

So unless these brands have enormous amounts of money and investors in the bank, they need to sell sell sell.

Of course, this is not a science per se. That's why some companies get it right, and some wrong. It's a balance that is notoriously difficult to achieve.

My warning to these companies is that it's really really easy to tear things down and destroy a relationship, even if it's a relationship spanning 90 plus years, and a relationship that has been fruitful. It's so easy to destroy relationships.

It's really really really difficult to build back a broken relationship. It's just never the same. That's why when a divorced couple remarry, these don't last very long....and are often shorter than the original coupling.

Just too much trust has been broken and those things that tore the relationship apart the first time, are much less tolerated the 2nd time around.

[scurfa]

What they are reducing is visibility I would never have started buying Patek watches if I had never seen and handled them, with my local AD gone the people of the North East of England have moved on to other brands, I can imagine they have lost thousands of customers closing this one AD.

[Calatrava r]

Originally Posted by scurfa

What they are reducing is visibility I would never have started buying Patek watches if I had never seen and handled them, with my local AD gone the people of the North East of England have moved on to other brands, I can imagine they have lost thousands of customers closing this one AD.

I think they believe they have all the visibility they need, and they will attract more steady big purchase buyer type clientele at the big inner-city boutiques.