Rolex AD's dropping like flies

[pickettt]

Originally Posted by tyler1980

maybe they have been putting off making AD's upgrade stores until now. Most AD's i have been in over the past year have had some sort of Rolex remodel. I doubt they can be that demanding all the time and in a different and slower watch market.

If that was their plan, I'd say it backfired. It would appear that a number of ADs would rather have Rolex drop them as opposed to comply with their demands. OR Rolex is dropping them....either way, they don't get their upgraded stores.

[RTG]

Originally Posted by GeorgeA7

Rolex is changing their image. There are way to many ADs and some, in the wrong locations. This was in part of expansion, getting people to buy the brand and expanding at a rapid rate. IMO Rolex is protecting their image and making their watches an item of exclusivity, and will only to continue to move in this direction. Why would Rolex want their watches to be available to just anyone? For profits? Nah, if everyone had a Rolex the exclusivity of owning something “special” will not be there. People want what they can’t have and this works from a marketing perspective and will keep demand high while protecting their image for the long term. Other brands have been known for producing large numbers of watches and getting them out to as many ADs as possible for the sake of driving short term profits. This has resulted in ADs sitting on large inventory, resulting in ADs selling watches at a discount (sometimes large) to off load product, which ultimately devalues the brand. I might sound rude for saying this, but as a buyer of a luxury item, I would prefer not to see Rolex watches being mass produced to the point that they are as common as seeing LV bag on every women walking around NYC. That is just my opinion, and I understand many on this forum are all about increasing production on certain SS models so that everyone can get one, but I can say that I appreciate having an item that someone can’t easily get, think it protects the brand from a exclusivity stand point and protect the consumer from a value perspective. Long story short - ADs will most likely continue to close down and Rolex watches will continue (SS at least) to be scarce.

Well said. I agree completely. If every rolex watch was available on demand not many would pursue more than one.

[tyler1980]

Originally Posted by pickettt

If that was their plan, I'd say it backfired. It would appear that a number of ADs would rather have Rolex drop them as opposed to comply with their demands. OR Rolex is dropping them....either way, they don't get their upgraded stores.

they do look nicer. Im not sure it would convince me to buy a Rolex if i wasn't otherwise so i have no idea if its effective. Looks wise, every one i have seen it looks like the most high end brand the store carries ... even when it's not.

[oldman2005]

Originally Posted by Harland

A very long time AD in Mississippi just lost their Rolex AD. One of their salespeople stated that they felt they were much better off not being an AD, because Rolex was so much trouble to deal with and a headache. He said 1/3 of the product did not sell, 1/3 of the product sold only a small amount and the product that did sell they could not get from Rolex (steel Subs, GMTs, Daytonsa, etc.). They are happy selling Omegas, Breitlings, etc.). Too much headache to sell Rolex’s!

IMO this sounds like a failing business model for Rolex, if I owned retail business with products and supply issues like that I would be in trouble.

Maybe Rolex is struggling itself and a new Rolex USA boss is an indication. Who knows.

[SoTaxLaw]

My AD also has Tudor. I noticed during my last visit that the Tudor display wall had changed. The sales staff said their Tudor Rep came in and changed the display wall. The sales staff seemed to have not known it would happen. The Rolex display was the same but I noticed the store watchmaker was visiting with every customer and came over and actually supported my reasons for wanting the stickers to stay on. These seemed like significant changes to me. I had never seen the watchmaker before. I also noticed they had a discreet Everest display near the customer lounge. They said they aren’t advertising Everest to avoid a conflict with Rolex. I guess even when your AD stays, the AD’s relationship with Rolex/Tudor is complicated.

[klenboy]

I noticed one mall-located AD dropped off the list in SF. Visited that location once - just crickets and tumbleweeds there.

[Playinwittime]

Los Angeles does not appear to have ADs folding... yet. While the coffers are empty of Rolex steel sport models, all the ADs that I know sell multiple brands. Are they hurting? They must be. My local AD has Tudor, Breitling, IWC, Patek, Cartier, Jaeger LeCoultre and Panerei, even though I believe Rolex was their primary source of income by far. After telling me they could sell pre-owned, but probably wouldn’t just months ago, they’re selling pre-owned too and their pre-owned Rolexes are skyhigh pricewise, but some are serious vintages.

[calh22a]

Originally Posted by klenboy

I noticed one mall-located AD dropped off the list in SF. Visited that location once - just crickets and tumbleweeds there.

Which one was that one? I didn’t notice on the website. There is an AD 1 hour north of SF that fell off in January. Been there a few times with empty cases and many DJs.

[Zakalwe]

Originally Posted by oldman2005

IMO this sounds like a failing business model for Rolex, if I owned retail business with products and supply issues like that I would be in trouble.

Maybe Rolex is struggling itself and a new Rolex USA boss is an indication. Who knows.

I realise you’re talking about a different territory, but what evidence there is suggests the opposite.

The U.K. subsidiary of Rolex SA, the Rolex Watch Company Ltd, posted a 100% increase in profits year on year at the end of 2017 (the last year figures are available). The date is notable as being the first full year of trading after the Brexit vote and the year that a major SS Professional watch shortage became really noticeable in Britain.

I suspect Rolex are doing fine, even if many AD’s aren’t.

[dtwer]

If true, thumb up to Rolex for culling the herd.

It is evident that Rolex is moving upmarket with the new found demand worldwide. Would not be a surprise that this evolution will create downstream effects; the ADs that can’t keep up will drop out. It’s Darwinism at its finest.

Also in my experience some ADs simply need to be dropped. The indifferent and unknowledgeable sales force, the antiquated store space, the coexistence with other discount brands, etc.; these things make up marketing exceedingly difficult. It’s a good thing to part ways with these ADs and let the truly upscale ones carry Rolex from now on.

[JR16]

Originally Posted by oldman2005

IMO this sounds like a failing business model for Rolex, if I owned retail business with products and supply issues like that I would be in trouble.

Maybe Rolex is struggling itself and a new Rolex USA boss is an indication. Who knows.

I think Rolex’s failing business plan was letting their distribution network get out of control- they are simply reversing that, and thinning the heard. While going boutique-only (Rolex owned) or internet direct sale would be a mistake, shrinking the number of ADs does make sense from their perspective. My 2 cents.


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[AK797]

Also some ADs are getting punished for being too lax in stopping flippers, esp those isolated stores with lower footfall.

[HogwldFLTR]

Lack of supply will hurt profitability for certain. Hard to justify square footage whey there's nothing to sell!!!

[mmbiker]

Yup, Saskatoon Canada dropped its only Rolex AD...

[Duey]

Mall's are soon to be a thing of the past. There has been a lot of financial articles on this lately and perhaps Rolex is reading them and is trying to stay in flow with this changing world. Many places are trying to change their malls into condos and such. So Rolex moving away from the mall seen is just a sign of the times.

[pickettt]

Originally Posted by RTG

Well said. I agree completely. If every rolex watch was available on demand not many would pursue more than one.

But couldn’t they have done that by just raising the price?

[eb641]

I used to be a dedicated Rolex owner/buyer..For the last 10 years,however, Rolex has driven we away with their phony shortages,wating lists and insane price hikes. I guess I just cannot understand why a company can sell more product by not having it available. $9250 for a stainless GMT that you must pay double from a grey to actually get. Why not just send a few hundred of 'em to your AD's and make a few friends.

[Wahlberg]

Originally Posted by AK797

Also some ADs are getting punished for being too lax in stopping flippers, esp those isolated stores with lower footfall.

I was looking for this post.

Of the ADs that are being cut, I hope those are the ones who have been selling their stock to greys. Buh bye.

[Gotgolf52]

Originally Posted by Flyfisher

From a retailers standpoint, having expensive real estate to showcase nothing but empty cases is a losing proposition.

I know on this board, it is always assumed that Rolex drops AD’s and not the other way around.

But I am not so sure.

This is very true, I don’t get the idea of Rolex dropping AD? As suppplier I would love to distribute my merchandise to various locations to increase my sales. Demand for Rolex might be off the roof the last couple years but prior to that they barely move sport professional line watches except for Daytona. When demand decreases, Rolex wish these AD still selling their products. Everything come in cycle up and down. I’ve been to some fancy AD in expensive part of town for property rentals with nothing in the case. Personally I wouldn’t invest million dollar storefront with no supplies. I rather buy Starbuck chain and sell water for money.

[05carbondrz]

They deserve it,End of Thread/

[rodneygt3]

I am in lucky to be an affluent area and I know of at least 3 AD's that lost their Rolex license. One was in the Greenwich, Stamford mall and the other was in my town of Darien. The local one in my town was a big blow because I had a really good relationship with the AD and was able to secure multiple Rolex watches. His business was pretty good and more of Rolex's way to control the dealers/supply. That said there was still plenty of local AD's in the area, but I really miss my local dealer.

[Gotgolf52]

Originally Posted by Duey

Mall's are soon to be a thing of the past. There has been a lot of financial articles on this lately and perhaps Rolex is reading them and is trying to stay in flow with this changing world. Many places are trying to change their malls into condos and such. So Rolex moving away from the mall seen is just a sign of the times.

I blame my wife for stop shopping at the mall and buying everything online late into the night. She need to go mall and support the shopping center, so I can keep buying Rolex

[Goin2drt]

Originally Posted by 05carbondrz

They deserve it,End of Thread/

Yeah great. Close all the AD's and just give the grey's all the stock so you can pay 20% + mark up over MSRP

[strafer_kid]

Originally Posted by eb641

I used to be a dedicated Rolex owner/buyer..For the last 10 years,however, Rolex has driven we away with their phony shortages,wating lists and insane price hikes. I guess I just cannot understand why a company can sell more product by not having it available. $9250 for a stainless GMT that you must pay double from a grey to actually get. Why not just send a few hundred of 'em to your AD's and make a few friends.

Fair point!

[77T]

Originally Posted by eb641

.For the last 10 years,however, Rolex has driven we away with their phony shortages,wating lists and insane price hikes.

Here in US the demand is the issue rather than any other item you mentioned. Supply & Price haven’t dampened demand.


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[dkg1616]

I can see mall ADs losing status because of slow daily traffic.

[reeder1]

We lost our AD in Tallahassee, Florida recently. The Gem Collection. Very nice place with great CS, and the store is still going strong, but sadly with no Rolex. Such a change from the beginning of 2017-my first visit to the store: they had every single Rolex sports and dress model in stock, from different Daytonas to every iteration of Submariner- Hulks, 2 tone, gold, etc. They had a solid gold, freshly serviced used Daytona for 10K. MSRPs on everything. I could have spent 25k that day and saved a lot of money in the long run!

[rlx123]

Originally Posted by rodneygt3

I am in lucky to be an affluent area and I know of at least 3 AD's that lost their Rolex license. One was in the Greenwich, Stamford mall and the other was in my town of Darien. The local one in my town was a big blow because I had a really good relationship with the AD and was able to secure multiple Rolex watches. His business was pretty good and more of Rolex's way to control the dealers/supply. That said there was still plenty of local AD's in the area, but I really miss my local dealer.

How does it help the average joe trying to buy his first and only Rolex when there are many more whales in these affluent areas who are on top of the vip list? How does it help you?

[samson66]

Originally Posted by Duey

Mall's are soon to be a thing of the past. There has been a lot of financial articles on this lately and perhaps Rolex is reading them and is trying to stay in flow with this changing world. Many places are trying to change their malls into condos and such. So Rolex moving away from the mall seen is just a sign of the times.

I don't disagree in general but I will tell you that these two malls are VERY successful. Both are always crowded, in relatively affluent areas, and both have expanded in the last decade. I just think these stores, which pay high rent to be in these malls, can't make any money selling a watch brand that doesn't send them any stock. How do you constantly greet your walk-in customers with empty cases? I just wonder if these are cases of Rolex dropping the retailer or the retailer dropping Rolex? I think the latter in these cases

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[johnnyjazz]

The Seddiqi AD in Dubai is in a mall, but then again it is pure Rolex, even the air con.
That store looks like the future blueprint that Rolex have in mind.