AD closings forced by Rolex HQ.

[ScarletFire]

I recently watched this podcast with the CEO of Lange talking about moving to a Boutiques only model, and I think this makes a ton of sense for watchmakers. https://youtu.be/EfK52CB6z3k?si=Q7P419Ld8vwXVHZ_

1) They get data on who is buying the watches instead of wholesaling
2) They get retail margins instead of wholesaling
3) Less locations means they can have more watches available to see in person at point of sale.
4) They have an easier time enforcing their policies since they own all the points of sale.


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[BillA]

Originally Posted by PhilAviate

I can see why Rolex are doing this in general, the last few years have been terrible for long term customers, and many AD are the cause of this.
The fact that most inventory ends up on the grey market, and stores are unwilling to just sell to regular customers in many cases, has really soured the brand.

Unfortunately the good dealers will get dragged down with the bad ones; but when EVERY single watch is easily available NIB from multiple grey dealers, often with a card dated less than a month or two ago, there clearly is still a problem of artificially hoarded scarcity.

Rolex are smart enough to know that their long term success is based on long term customers, not the hype driven ones of the last few years.

The hype has mainly died, and the normal watch enthusiasts are reentering the market en masse, but many are still annoyed with how they have been treated as a whole.

The grey days are done, and the market is getting back to normal, despite their last gasp efforts to keep up the pretence of shortages. Rolex et al know that the ones that matter in the end are the ones who were buying watches when any and all were available for walk in. The hype and fashion people come and go, and right now are mainly going away.


As much as I like my dealers that I've dealt with for over 25 years, I'd rather just have Rolex owned boutiques with rigorously controlled inventory that does not slip out the back door.

The ADs, by many of them supporting the grey dealers, have bought this on themselves. Doing stupid things like selling one grey dealer 20 of the same GMT on the same day, which he then tries to flip in bulk lots, helps no one long term.

This makes no sense.
A small AD is more likely to know its clientele must better than a Rolex boutique. Every time I go into the Bucherer near me, there are different sales people. They write my wish list on a piece of paper and then wipe their arse with it. I think that AD’s selling out the back door to greys is way overblown. Why do they have to do this when inside the store, the line is out the door for customers who are willing to buy at msrp.
There is sometimes so much BS going on this forum, we start to believe it ourself.

[njlam]

In my experience, it is the independent jewelry store ADs that are the most condescending and who expect/require a lot of non-Rolex purchases to be taken seriously.

It is my hope these are the ADs that lose their access.

That being said, in my town (small city), we have two Ben Bridge locations and an independent jewelry store (that recently invested a ton to be a Rolex only boutique). Neither has called me for the watch I want...Of course this will change as I just went grey...

[BillA]

Originally Posted by Fleetlord

I fully anticipate most family owned single point Rolex AD locations in USA to be eliminated over the next 5yrs. There may be a few left in strategic locations that can keep up the image, but I kinda think those are going to end up dumped too at some point.

I know of plenty of smaller "affluent" enclaves that had Rolex AD eliminated in the last few years. People there are like "we're wealthy" why would they take Rolex from us!

Well, those locations are actually irrelevant. Selling Rolex to them is simply a waste of supply that is needed elsewhere. Rolex wants to partner with big chains to nicely consolidate all their marketing/operations and big chains need bigger supply to feed big clients in big cities. The people who WANT Rolex will absolutely travel a few hours to obtain ROLEX. The brand is well, well worth it and Rolex knows that.

So, the independent dealers need to plan for a life without Rolex. It's inevitable .

This would be a shame after the dealer spent tons of money to turn the store into a Rolex boutique section.

[111forza]

Rolex recently pulled the plug on local AD and this is only 3yrs since the AD purchased an adjoining property to extend their existing store to fit it out as their in-house Rolex boutique. Seems to have been quite a swift move from Rolex not sure if there was an issue between Rolex and AD but just seems quite brutal after such a major refit by AD.

[buffetwarren]

Originally Posted by ScarletFire

I recently watched this podcast with the CEO of Lange talking about moving to a Boutiques only model, and I think this makes a ton of sense for watchmakers. https://youtu.be/EfK52CB6z3k?si=Q7P419Ld8vwXVHZ_

1) They get data on who is buying the watches instead of wholesaling
2) They get retail margins instead of wholesaling
3) Less locations means they can have more watches available to see in person at point of sale.
4) They have an easier time enforcing their policies since they own all the points of sale.


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This doesn’t apply to Rolex since Rolex only owned one of its stores before the Bucherer deal.

However if Rolex rolled this approach out (centralized data collection) they could ensure a more equitable distribution of its watches. Fact is they don’t care about the customer experience. They have their foot on the necks of ADs to amplify their brand.

[Goupax]

I think some of those small mom and pop dealers supply will go to Rolex Bucherer owned stores, why funnel highly desired pieces to these independant retailers when you can sell them all through your own network of stores and pocket the extra 32.5% margin?

[harvey]

Originally Posted by 111forza

Rolex recently pulled the plug on local AD and this is only 3yrs since the AD purchased an adjoining property to extend their existing store to fit it out as their in-house Rolex boutique. Seems to have been quite a swift move from Rolex not sure if there was an issue between Rolex and AD but just seems quite brutal after such a major refit by AD.

I spoke to Dan a few days ago about this. I am shocked how ruthless Rolex was. Less than 24 hours before they came to take down the signage outside the building…

[111forza]

Originally Posted by harvey

I spoke to Dan a few days ago about this. I am shocked how ruthless Rolex was. Less than 24 hours before they came to take down the signage outside the building…

Certainly a swift move from Rolex I’m wondering if there was some sort of issue

[Olive Drab]

Is the end game to build more torneau stores and kill these little guys off? I cant say Id miss Reed's in Richmond, VA, but I've purchased from Henne in Pittsburgh and they just finished a 7 figure remodel to accomodate the Rolex boutique. That would be beyond unfortunate for them to lose their AD status in the next few years.

[INC]

I did not think that what I wrote would come true so quickly:

https://www.rolexforums.com/showpost...1&postcount=67

Copy+paste:

Originally Posted by INC

[...]Their seriousness.

In this case, Rolex does not cause a competitive disadvantage in the watch market, but only creates its own sales policy. In such a case, it is by default silly to refer to the rules of competition law. In this case the AD's are working like to be in a franchise, so it is more then silly if the EU wants to dictate the rules for the franchise owner. Usually, such an idioting judgement will lead to very bad things for the end customers at the end:

Rolex can simply end this AD model and become the sole seller. They have plenty of money for that. In this case, moreover, they would be able to completely control their market and the price, with which they would otherwise be able to double their profit without any problems. In fact, it would be completely stupid of them not to do this after the insane fine. Less and less physical shops, more profit for Swiss, less for the EU countries - why would it be good for us?

Thank you EU! Thank you France! Please protect more the customers and the EU related companies!

[Fleetlord]

Originally Posted by BillA

This would be a shame after the dealer spent tons of money to turn the store into a Rolex boutique section.

That's why these AD / jewelers need to make very HARD decisions NOW.

Doing the buildout doesn't ensure keeping the line at all. Many examples of paying into buildout, but then getting dropped.

Moving on from Rolex on your own terms may be a better choice. It's a terrible, terrible loss as Rolex is absolutely and totally the dominant brand in the watch space, but if you're not a huge, multi store high end chain, it just isn't in the cards anymore. Adapt and change on your schedule...

[njlam]

Originally Posted by BillA

This makes no sense.
I think that AD’s selling out the back door to greys is way overblown. Why do they have to do this when inside the store, the line is out the door for customers who are willing to buy at msrp.
There is sometimes so much BS going on this forum, we start to believe it ourself.

I think they split the profits with the greys so it is more profitable to sell to greys...they only get MSRP if they sell in store...

It would be great if Rolexes are easier to get after they kill all the small independent ADs. However I am not going to hold my breath.

I wonder how these changes are going to affect retailers like Ben Bridge?

[Notepad12]

Originally Posted by njlam

I think they split the profits with the greys so it is more profitable to sell to greys...they only get MSRP if they sell in store...



It would be great if Rolexes are easier to get after they kill all the small independent ADs. However I am not going to hold my breath.



I wonder how these changes are going to affect retailers like Ben Bridge?

And the department stores such as Harrod's and Selfridge's

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[Dave O]

Originally Posted by Goupax

I think some of those small mom and pop dealers supply will go to Rolex Bucherer owned stores, why funnel highly desired pieces to these independant retailers when you can sell them all through your own network of stores and pocket the extra 32.5% margin?

I don't think Rolex can funnel all of their watches through Bucherer. Let me explain. My numbers may be off by a bit, but I believe Rolex has around 1800 AD's. Bucherer only has around 100 stores and out of those 100 only half sell Rolex. Think about it. Bucherer only makes up about 2.5% of the overall AD network. How much of an impact could this impart on the other 1750 AD's?

Think of it another way. Rolex reportedly makes around one million watches a year. That means on average each of the 1800 AD's receive about 555 watches a year. If they only supplied Bucherer at it's 50 Rolex AD's that means they would receive 20,000 Rolex's a year, or 55 a day. I don't think Bucherer could keep up at that rate.

Is Rolex trying to weed out some of their AD's? Sure. But will they reduce them dramatically? Not likely. With the amount of volume Rolex produces, and the new factory scheduled in the near future, they will need these AD's to get the product out.

[Rollieo]

Originally Posted by Dave O

I don't think Rolex can funnel all of their watches through Bucherer. Let me explain. My numbers may be off by a bit, but I believe Rolex has around 1800 AD's. Bucherer only has around 100 stores and out of those 100 only half sell Rolex. Think about it. Bucherer only makes up about 2.5% of the overall AD network. How much of an impact could this impart on the other 1750 AD's?

Think of it another way. Rolex reportedly makes around one million watches a year. That means on average each of the 1800 AD's receive about 555 watches a year. If they only supplied Bucherer at it's 50 Rolex AD's that means they would receive 20,000 Rolex's a year, or 55 a day. I don't think Bucherer could keep up at that rate.

Is Rolex trying to weed out some of their AD's? Sure. But will they reduce them dramatically? Not likely. With the amount of volume Rolex produces, and the new factory scheduled in the near future, they will need these AD's to get the product out.

Lot of truth in this.

There was a good video/thread on this exact thing. Rolex won’t go to their own stores for a long time if ever. Not enough major chains to support the number of sales Rolex needs.

https://m.youtube.com/watch?si=Wm2-v...ature=youtu.be

https://www.rolexforums.com/showthread.php?t=926087

[Dave O]

Originally Posted by Rollieo

Lot of truth in this.

There was a good video/thread on this exact thing. Rolex won’t go to their own stores for a long time if ever. Not enough major chains to support the number of sales Rolex needs.

https://m.youtube.com/watch?si=Wm2-v...ature=youtu.be

https://www.rolexforums.com/showthread.php?t=926087

Thanks for sharing. I had watched this video but couldn't find the link.

[MovieGuy]

Originally Posted by willie55912

I do my Rolex business in Rochester, Mn. at a jewelry store that has sold Rolex for over 60 years exclusively. NO other watch brands are sold here. When you buy a new Rolex, the lady manager of the watch sales, immediately removes the tags,or you can but it is done in her presence, and she immediately fills out the card. She adheres to what Rolex expects to keep watches with a real owner and not get to the grey market. She was notified 2 weeks ago that Rolex is stopping the relationship, all watches had to be pulled immediately, as well as any Rolex branding displays in the store or advertisements. She was in shock and still very upset about this. She said they got a letter, but first a call from the Rolex HQ when they opened and got the bad news. Rolex stated that they are going to focus on Rolex Boutiques and starting to close independent sellers. It is so shocking that Rochester, Mn. is home to so many wealthy doctors at Mayo, and the city has an income level that is the highest of most cities in the US because of the professional people in that city. Does not make sense. Guess that one now has to travel long distances now to a Rolex dealer and put up with many of the salespeople snobs in the boutiques. Sad, sad, sad.

That really stinks to hear. I've been to Rochester several times and always enjoyed visiting Laskers while I was there.

[Tortoise99]

Originally Posted by 111forza

Rolex recently pulled the plug on local AD and this is only 3yrs since the AD purchased an adjoining property to extend their existing store to fit it out as their in-house Rolex boutique. Seems to have been quite a swift move from Rolex not sure if there was an issue between Rolex and AD but just seems quite brutal after such a major refit by AD.

Where was this?

[azhiker54]

Originally Posted by Oystersteel92

It isn't that far off what USED to happen. The first AD lost in my area occurred back about a decade ago and while they pulled the Rolex signage the watches were theirs to sell. They sold off their inventory at at 25% discount and even took out a newspaper ad. By the time I caught wind of it all that was left were ladies models and a couple 36mm DD and 36mm diamond DJ.

Its funny, I reported that the sales lady at Jared in Mesa, told me that exact thing, only she stated 50% ( which seemed extreme, but I didnt want to question her) . I was basically called a liar by several of our upstanding TRF members.

I believe your story, just as I believe what I was told. She told me they sold DOZENS to pawn shops at that price, and their inventory was gone basically in a week.
AD’s ( supported by customers who feel privileged) are going to continue to ruin it for-the common guy/ gal. One of our own members made the comment that he liked the way AD’s were operating as it ‘kept the unwashed masses’ from owning a Rolex.

Like me, though Im not unwashed haha

But, I had to save 3 months to but my DJ. I dont buy anything I cant afford ( 2 later model cars paid for) so I guess Im probably in his category. Unwashed, deplorable, working guy, family man.

Yeah, Ill take that!

I hope everyone, even the snobs on here have a SAFE AND HAPPY NEW YEAR! Good luck finding/ acquiring, and Incoming your next watch!

[Dirt]

It sounds like they are making way for them to open their own boutique after the dust settles.

[RKunz]

Originally Posted by njlam

Given the amount of watches available from greys, I suspect many, many ADs are complicit in supplying these markets with new watches to the detriment of MSRP retail buyers. Profits are most likely shared with the ADs.

If Rolex is ending AD relationships to crack down on this practice, I am all for it, but it will be interesting to see if MSRP availability of sought-after Rolexes will improve. Somehow I doubt it. If you want a sought-after model, greys are really the main option for those whose time is worth more than money.

It is possible that Rolex boutiques that are not directly owned by Rolex will continue the practice of supplying the greys.

Those of us who live in smaller cities/towns who want the chance at MSRP purchases will have to travel to get access and the big city dealers like Bucherer, WOS, Ben Bridge and 1916 will control more of the inventory.

The Rolex CPO market will keep prices high for models/inventory older than 3 years.

I agree with those who have stated that availability of the more sought-after models will only improve with a serious economic downturn.

The whole thing is a huge turn off.

You really don’t know what you’re talking about! Most all the closures are part of a master plan conceived in Geneva not New York. The majority of the ADs that are being closed are extremely diligent, honest, and abide by the terms of the contract. Most often they frightened to death with the idea of losing the line so they are very cautious with whom they sell. So you’re just clueless. Absolutely clueless.

[RKunz]

Originally Posted by 111forza

Rolex recently pulled the plug on local AD and this is only 3yrs since the AD purchased an adjoining property to extend their existing store to fit it out as their in-house Rolex boutique. Seems to have been quite a swift move from Rolex not sure if there was an issue between Rolex and AD but just seems quite brutal after such a major refit by AD.

If an AD is making a big investment in buildout that’s a real fear. Usually with a boutique you can get a 5 yr contract instead of the 1 year contracts most ADs sign. This allow the opportunity to recoup the cost involved with building out the store.

[RKunz]

The transition to boutiques is a big adjustment for most independents. You almost feel like you’re working for the watch company. Under a microscope. Receive constant calls and emails. Also a watch company can now collect ALL the data! Client names & addresses, purchases, repairs etc etc.

[achenator]

Originally Posted by RKunz

You really don’t know what you’re talking about! Most all the closures are part of a master plan conceived in Geneva not New York. The majority of the ADs that are being closed are extremely diligent, honest, and abide by the terms of the contract. Most often they frightened to death with the idea of losing the line so they are very cautious with whom they sell. So you’re just clueless. Absolutely clueless.

Well all these grey watches are coming from SOMEWHERE and I doubt it's from the big chain stores LOL!

[Goupax]

Originally Posted by Dave O

I don't think Rolex can funnel all of their watches through Bucherer. Let me explain. My numbers may be off by a bit, but I believe Rolex has around 1800 AD's. Bucherer only has around 100 stores and out of those 100 only half sell Rolex. Think about it. Bucherer only makes up about 2.5% of the overall AD network. How much of an impact could this impart on the other 1750 AD's?

Think of it another way. Rolex reportedly makes around one million watches a year. That means on average each of the 1800 AD's receive about 555 watches a year. If they only supplied Bucherer at it's 50 Rolex AD's that means they would receive 20,000 Rolex's a year, or 55 a day. I don't think Bucherer could keep up at that rate.

Is Rolex trying to weed out some of their AD's? Sure. But will they reduce them dramatically? Not likely. With the amount of volume Rolex produces, and the new factory scheduled in the near future, they will need these AD's to get the product out.

Obviously Bucherer alone can't, meaning that big chains like Watches of Switzerland, Wempe, Ben Bridge, etc. are here to stay. It's the small individual locations that should fear for their livelihood right now, it took them years before Rolex decided to put a foot in their store and gave them the golden goose. It's cut throat business from Rolex but the power dynamic is swinging hard in their direction. Just don't feel too sorry for these mom and pop jewellery stores, despite the heavy expenses in buildout and such, they have made quite the bag in the last few years where everything was flying out of the shelves without even trying.

[illiguy]

Originally Posted by MovieGuy

That really stinks to hear. I've been to Rochester several times and always enjoyed visiting Laskers while I was there.

Anyone from Laskers or close to the situation care to opine here? I would guess they refused the build out. If they’re only a single location and they don’t also, for example, carry Tudor, that spelled trouble.

[LJubel328]

Originally Posted by Goupax

Obviously Bucherer alone can't, meaning that big chains like Watches of Switzerland, Wempe, Ben Bridge, etc. are here to stay. It's the small individual locations that should fear for their livelihood right now, it took them years before Rolex decided to put a foot in their store and gave them the golden goose. It's cut throat business from Rolex but the power dynamic is swinging hard in their direction. Just don't feel too sorry for these mom and pop jewellery stores, despite the heavy expenses in buildout and such, they have made quite the bag in the last few years where everything was flying out of the shelves without even trying.

I don’t think that is a fair statement. Just because multiple external factors contributed to a business’s performance, should not equate to a business needing to suffer financially. These small retailers had no influence of monetary easing, zero interest rates, or stimulus checks, they were merely beneficiaries.

I, for one, empathize with many of these mom and pop stores because, for many of them, it is their life’s work. Rolex is most likely a major function of why their businesses are still in operation, and without the brand, many of them will probably not survive in the long-run.

And sure, there have certainly been bad apples, but there are also good ones that have been there for many buyers (AND for Rolex) for years.


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[Mathematoxic]

Originally Posted by Goupax

Obviously Bucherer alone can't, meaning that big chains like Watches of Switzerland, Wempe, Ben Bridge, etc. are here to stay. It's the small individual locations that should fear for their livelihood right now, it took them years before Rolex decided to put a foot in their store and gave them the golden goose. It's cut throat business from Rolex but the power dynamic is swinging hard in their direction. Just don't feel too sorry for these mom and pop jewellery stores, despite the heavy expenses in buildout and such, they have made quite the bag in the last few years where everything was flying out of the shelves without even trying.

Maybe rolex wants to consolidate and eventually buy out every big retailer. Just a wild guess

[Wrathchild]

Originally Posted by Olive Drab

Is the end game to build more torneau stores and kill these little guys off? I cant say Id miss Reed's in Richmond, VA, but I've purchased from Henne in Pittsburgh and they just finished a 7 figure remodel to accomodate the Rolex boutique. That would be beyond unfortunate for them to lose their AD status in the next few years.

Bro! I been to Henne a couple months back when working in Pittsburgh.
They are incredibly polite and respectful to their customers, such a great group of people there.
Rolex best not think of closing them down!