Hodinkee article: U.S. Steel Watch Shortage Good For Gold

[yOyOYoo]

https://www.hodinkee.com/articles/us...-good-for-gold

The chronic shortage of steel sport watches from Rolex and Patek Philippe in the U.S. helped send retail sales of precious-metal watches soaring in the first half of 2019. Data from the NPD Group, which monitors retail watch sales in the U.S. market, shows that sales of gold watches rose 19% in value over the same period in 2018. Sales of two-tone watches (primarily steel and precious gold) jumped 18%. Platinum watch sales increased 33%.

These numbers are quite a jump. I know I was pretty frustrated by the long wait times and ridiculous grey mark ups when I decided to go PM.

[quakeroatmeal]

I can't be the only one that finds it hard to believe someone going to an AD looking to spend 8k on a sub is walking out with a 25k-35k PM rolex just because they couldn't get the stainless steel model...

[Juan Luis]

But then again, paying an extreme premium for good old steel?! Steel.

[othertbone]

Originally Posted by quakeroatmeal

I can't be the only one that finds it hard to believe someone going to an AD looking to spend 8k on a sub is walking out with a 25k-35k PM rolex just because they couldn't get the stainless steel model...

No I think for example, its people seeing they have to pay 24k on the grey market for a ceramic Daytona that are buying the two tones and PM models from the AD's.

[Verdi]

Nice to see the exact pm watch I bought as a result of the shortage.
Cool to see that they used an older wg ref DD to feature. It is a way of saying that not everyone got a new pm model, some bought pre-owned.


I got that very watch but I did not get it new. And I must admit there is no way I would have bought a DD at this stage in my life if I could get my hands on a GMT or whatever other ss model I want.

[Aefwd]

Originally Posted by othertbone

No I think for example, its people seeing they have to pay 24k on the grey market for a ceramic Daytona that are buying the two tones and PM models from the AD's.

This.

Wound up purchasing a WG OF Daytona because I couldn't get an LV or SS DaytonaC

[illiguy]

A rising tide lifts all boats.

[dtwer]

Originally Posted by othertbone

No I think for example, its people seeing they have to pay 24k on the grey market for a ceramic Daytona that are buying the two tones and PM models from the AD's.

I agree. Comparing to a $24K regular Daytona, a $16K TT Daytona looks very reasonable to me.

[Mr.Rolex1]

Originally Posted by illiguy

A rising tide lifts all boats.

[007_Omega]

Originally Posted by quakeroatmeal

I can't be the only one that finds it hard to believe someone going to an AD looking to spend 8k on a sub is walking out with a 25k-35k PM rolex just because they couldn't get the stainless steel model...

Maybe not from an AD but when the gap on the grey market for a steel vs two-tone piece is minimal then it gets people thinking.

[Wiener48]

Interesting, thanks for sharing the link

[Luther89]

Originally Posted by quakeroatmeal

I can't be the only one that finds it hard to believe someone going to an AD looking to spend 8k on a sub is walking out with a 25k-35k PM rolex just because they couldn't get the stainless steel model...

Exactly. Just can’t be right.

[marmite2005]

Could it also be the new high gold spot prices ? Are investors speculating on further rises in the price of gold and buying a nice tangible asset to wear in the mix ?
Buy a nice 118238 pre-owned for $15k today, Whats its resale price in 5 years ? Got to be higher if Rolex follow the last 5 year market plus further rises in gold spot.
Seems like a nice trade for a WIS, especially with the steel shortage.

[othertbone]

Originally Posted by Aefwd

This.

Wound up purchasing a WG OF Daytona because I couldn't get an LV or SS DaytonaC

Yes, thats exactly what happened to me, but I went for an AP Royal Oak 15500st

[Chewbacca]

Good thread OP.

There's MORE to this than simply gathering some data points from opt-in retailers on watches over $3k

"Because the data is proprietary, NPD provided dollar data to HODINKEE only for the full market, not for specific price segments." - Habookee

It's always easy to skew the numbers. All you need is to sell one masterpiece $250k - $500k + in a single state/zip code and there you have it. It can also mean punched warranty cards as a 'retail' sale but they're all going to one wholesaler who got 50% off twenty PM Zenith models. Or even a 'retail' reseller site like Jomashop putting their name on 1000 2T DJ's...

The more important question is this, WHERE are all these new PM Rolex members?

[pkincy]

Originally Posted by dtwer

I agree. Comparing to a $24K regular Daytona, a $16K TT Daytona looks very reasonable to me.

I just acted on this Friday, delivered Monday. Get a Daytona and save $8,000.

Also there is a long history of SS<SS/G<G<Pt. Just because people like a base metal more than a PM for a bit doesn't mean that relationship will continue.

[JohnGingerwood]

Originally Posted by quakeroatmeal

I can't be the only one that finds it hard to believe someone going to an AD looking to spend 8k on a sub is walking out with a 25k-35k PM rolex just because they couldn't get the stainless steel model...

Yes, exactly.

[GradyPhilpott]

So, because steel Rolex watches are priced way out of proportion to their value, people are buying precious metal Rolex watches that depreciate more than steel in a normal market.

I can see a certain logic to that. Eventually, when the market for steel goes back to normal, those who bought PM will actually have lost less to depreciation.

Anyone who's been around long enough knows that what goes up must go down and the eventual price decline of steel watches will burn a lot of speculators and it will have next to zero effect on manufacturers.

[123Blueface]

Originally Posted by quakeroatmeal

I can't be the only one that finds it hard to believe someone going to an AD looking to spend 8k on a sub is walking out with a 25k-35k PM rolex just because they couldn't get the stainless steel model...

But I would gladly buy a TT Daytona at half the price of an SS.
This sums it up.

[Pimpsy]

It has to be said that many people are buying SS watches at retail and then flipping into PM pieces that they could otherwise not afford.

[ademarco]

Every AD I walk into has a healthy selection of TT and PM pieces. Those watches are the only ones you get to try on since the others are scooped up once delivered. Really close to picking up a YG sub with nice blue dial, but came to my senses knowing the grey dealers have it at a 20% discount and no tax.

Even considered getting rid of a few watches to consolidate to PM, but I like more variety.

[schoolboy]

.

[DasKptl]

The main cause is: bundling.


ADs will get a SS watch for customers only when they buy PM watches.

[bonovox]

Originally Posted by illiguy

A rising tide lifts all boats.

THIS

[Nikrnic]

Originally Posted by 123Blueface

But I would gladly buy a TT Daytona at half the price of an SS.

This sums it up.

This should makes sense for a Daytona or TT fan. I'm not but it caught my attention.

Sent from my SM-G970U using Tapatalk

[bradyb]

SS shortages are part of the reason for my interest in PM, which I now realize is where all the fun is anyway.

[s14roller]

+ASP = win for those watch companies

[Spartacus]

I’m looking at PM models due to shortage and demand.

I really like the full yellow gold sports models.

[TempoKing]

Originally Posted by 123Blueface

But I would gladly buy a TT Daytona at half the price of an SS.
This sums it up.

25 years ago I helped many friends change their 16523 2T Daytona
Into a super popular 16520 Steel Daytona.

Today you can do the same,..
.buy a very nice pre owned 2T 116523 for around 10-12k
and turn it into a ceramic looking 116500 for a fraction of the crazy
Black market prices that exist with the Rolex company blessings.
...you only need the desire to do so.

[JayHantz]

I think there are a lot of contributing factors to this. The first is that, as we all know here, the SS market is insane. Seeing waiting lists for Explorers and DJs is the new normal. Since this rising tide (love that analogy), I think more people are looking at what other options are there? The Daytona example hits the nail on the head. And those who are looking for an AP RO, SS PP, etc. Why would I spend XX on the grey market for a SS piece, when I can get a PM for almost the same price?

I think that another factor could be those who do bundle in hopes of getting a desirable model of said brand. I know it helps and when someone wants a Rolex Day-Date and they see that if they get one, they can also get a GMT while they're at it. I know that would be a valid option for most who could afford it.
What this SS crisis is doing is causing the discounts that could be had to slowly trickle away. Yellow Gold Subs, Day-Dates, etc are now going for less of a discount than years past; you can see it in the for sale section and at the ADs themselves.

There are still a lot of good deals to be had in this craziness. Take the TT Sky-Dweller. You get an amazing watch, some PM, a killer movement for less than MSRP and WAY less than their SS counterparts.