The Forbes article points a causal finger at the entire industry. But I don’t think smart watches have had any affect on Rolex sales.
Sales aren’t reported by Rolex so we won’t know unless there is a sell off in the future. There have been some problems elsewhere...
In a follow-up article a year after the one cited above, by a different author, noted the following:
“How are retailers fighting?
One of the most common ways has been for them to “feed” the gray market. That means given the fact that most luxury watch buying has turned into a price war online, these retailers sometimes purchase watches from brands only to immediately resell them to gray market retailers via a dealer-to-dealer transaction. Such a move makes economic sense because even though the initial authorized dealer is purchasing at wholesale, they can re-sell the watches to a third-party at and price they like – thereby bypassing a watch brand’s rules against discounting. This practice (when discovered) can lead to a retailer’s “account suspension,” but much of the time watch brands turn a blind eye. In fact, many times a year watch brands in Switzerland with extra unsold inventory are known to sell watches directly to the gray market out “the back door,” while publicly admonishing the practice.
One might easily argue that watch retailers in America engaged in the above practice are clearly in violation of their contractual duties. They simply argue that the Swiss also violate their duties by selling them watches that are known to be very challenging to sell at retail or even close to retail prices. Some retailers are even going to the courts in order to adjudicate their complaints. A pending case in Florida pits a powerful retailer group against a Swiss watch brand that it contracted with to build two “brand boutiques” and fill them with inventory. Brand boutiques are those which only sell the products of one company, are intended to deliver a full brand experience, and are often operated by third-party entities as opposed to the watch brands themselves.
Part of the arrangement of these deals is that the brand boutiques are not allowed to discount prices, and also that they keep the store stocked with the brand’s latest luxuries. The lawsuit complains that the brand boutiques are (by the fault of the brand) commercially unviable because of the availability of steeply discounted identical watches online that the brand has allowed to be sold via the gray market. The complaint continues to suggest that the retailer who invested in the boutique was not only asked to fund a “showroom” for the brand, but that the brand also benefited by the ongoing sale of watches to the boutique that it was contractually obligated to make. Suffice it to say that the suit is for millions of dollars and it will be interesting to see how it plays out.”
https://www.forbes.com/sites/arielad...ortant-market/
Sent from my iPhone using Tapatalk Pro
ROLEXROLEXROLEXROLEXROLEXROLEX
15 October 2018, 09:09 AM
Linear Mode
