Chicago Lawsuit Filed by Rolex AD Former Employee

[chiscott_29]

It is my sincere hope CDP loses their AD status for both Rolex and Patek and they are used as a warning to others.

There is a lot wrong with this industry, but selling hot models out the back door has gotten out of hand. More AD’s do it than don’t. This is not sustainable and nobody can coherently argue that it is.

Take control of the sales channel, or sell direct to consumer and end this. I’ll gladly wait for something I want if the commitment is backed by the company and not some jackass AD.


Sent from my iPad using Tapatalk

[RyanJ]

Or....what Rolex will do...They will discipline this AD because they have to, turn a blind eye to others where they have no proof slamming them in the face, and go about selling their watches.

Rolex is here to protect the brand, not to sell everyone a watch that wants one. ADs are great for plausible deniability...

Not saying I agree with that but that is how I think they see it.

[Joshua_J0]

Originally Posted by RyanJ

Or....what Rolex will do...They will discipline this AD because they have to, turn a blind eye to others where they have no proof slamming them in the face, and go about selling their watches.

Rolex is here to protect the brand, not to sell everyone a watch that wants one. ADs are great for plausible deniability...

Not saying I agree with that but that is how I think they see it.

Agreed, Rolex is also very quick to act when it comes to protecting the brand, and Patek even more-so. I'm very surprised that their AD status hasn't gotten pulled from either brand and makes me pessimistic that it will eventually get pulled.

The unfortunate reality out there is that the general public that are either buying a TT DJ to celebrate a promotion, retirement, etc. or are trying to find a SS model because they saw one on Instagram are not at all aware of lawsuits like this that to us seem like a huge deal. I garuntee people will still walk into CDP to shop for watches, especially with their reputation of being the oldest AD / jewelry store in the Chicagoland area

[Andad]

Originally Posted by casadecamporolex

As a long time buyer of Rolex watches all over the USA, I’ve been introduced several times to the owner of CDP. We have attended private social functions in Chicago, New York and Los Angeles. This man always struck me as a braggart and loved to exclaim how big a Rolex AD he was. The top management of this company also acted entitled.
"The Rolex Way? Hardly.
Rolex could care less. Purely hypocritical.
I feel sorry for the ADs with honor who are punished by the arrogance of Holtzman and Co.
He originally owned credit jewelry stores and bought Gruen’s assets.
Can’t buy class or honor.

You lost me here.

What does this mean??

[TheVTCGuy]

Originally Posted by dannyp

Yea, but consider how many pay grey prices anyways, in order to get coveted timepieces. You think anyone who'd be willing to do that would think twice before accepting one at MSRP from an AD, any AD? So far all I've seen for sure is that their labor practices (which salespeople have "access" to Rolexes) are shady, and that the lesson to the consumer is that even within the same dealer, different salespeople may have access to different inventory.
.

Uhm.... I have no idea what you mean...

Yea, people pay high gray prices to get the watch they want, and yes if they had the opportunity to buy it for less (MSRP) from an AD then surely they would.. Sooo..... what?

I have no idea about the sales policy or whatever else you referred to, my point was we all know this practice is commonplace (selling out the back door to Grays). If the results from this lawsuit are that happens less, even a little bit, that means there would be more watches available at the AD at MSRP price for us to have access, (and buy).

[poker]

It is exceedingly frustrating to the on the 'queue' and never get a single call.

I guessed this could be the reason why.

[Knappo 1307]

Originally Posted by Andad

You lost me here.

What does this mean??

Eddie, I cringed at this also....

[brandrea]

Originally Posted by Andad

You lost me here.

What does this mean??

Originally Posted by Knappo 1307

Eddie, I cringed at this also....

Me too, I’m as daft as the two of you

[BroncoOne]

The only interesting part is the quote of a clause in the Rolex distribution contract that states that an AD may only sell a limited availability Rolex to a known customer.

There is no shortage. There is only a limited channel in which to obtain a hot Rolex at MSRP.
All models are very available at above MSRP market price from a grey seller.

[aczaja10]

I don't think Rolex cares. If anything, these AD games have been good for the brand. Until sales drop low enough that Rolex loses money, nothing will change. That will take a massive coordinated boycott or a tremendously bad economy. I think the latter is more likely, if at all. Rolex may slap CDP on the wrist, but I doubt they will pull their AD status. The sales people have a right to be aggravated, but I don't think that is Rolex's fault or problem.

[trippinjimmy]

Just some food for thought...if Rolex truly cared about the "shortage," why would they alter the warranty cards by removing the individual's name who purchased the timepiece?

Think about that for a minute. Initially, the only thing stopping me from going grey was I wanted my name on the warranty card (not to mention the name on the card allows for tracking of so called flippers). Now, that no longer detracts me from purchasing grey if I so choose. With its absence on the new version, I think it really shows the company's true colors.

The thing is though, the impossibility of getting a Rolex has allowed me to find other watches that are equally, if not more, interesting and fun to wear. It almost feels like trailblazing, finding the next "hot" watch before anyone else knows it exists. Actually walking into ADs and trying on watches, only buying the ones I love.

Just my $.02...YMMV.

[321Forever]

In any case, it’s up to each of us to decide whether we care and/or have the resources to buy from scalper/profiteers, AKA “grey dealers’” given that the mfr and ADs don’t do anything about this.

[Alex369]

Could Rolex be selling directly (or through means unrelated to the AD network...) to grey market dealers as well?

[Alex369]

Originally Posted by Alex369

Could Rolex be selling directly (or through means unrelated to the AD network...) to grey market dealers as well?

I know that sounds farfetched, but I also hadn't fully supposed, until a few days ago, that my SA was just straight up purchasing watches with their own credit card (from their own dealership) and then selling them for a premium right out the back door, so...

[dmb359]

I would guess they'll lose their AD status, and probably settle out of court with the accusers.

This lawsuit is a wrongful termination lawsuit, not a lawsuit for selling watches to gray dealers. I don't think they were doing anything "illegal" in how they were selling or who they were selling to, unless maybe there was like tax evasion or things like that going on, just depends on if they are breaking any sort of agreement with Rolex, in which Rolex may "punish" them.

[drfrankenstein]

Originally Posted by dmb359

I would guess they'll lose their AD status, and probably settle out of court with the accusers.

This lawsuit is a wrongful termination lawsuit, not a lawsuit for selling watches to gray dealers. I don't think they were doing anything "illegal" in how they were selling or who they were selling to, unless maybe there was like tax evasion or things like that going on, just depends on if they are breaking any sort of agreement with Rolex, in which Rolex may "punish" them.

I did not read the full complaint but it also seems there are definitely accusations of tax fraud, money laundering etc. I don't think it is just wrongful termination because it was filed in federal court. Someone please correct me if I am wrong here.

[Mifune]

The answer... (from a consumer perspective)... is for Rolex to move to a vertical integrate structure. this means, that in addition to making all their own raw materials and managing their own watch production, they move to a corporate owned retail location and 'ONLINE' order fulfillment model.

This also means, as orders are made and paid for, buyers are 'qued' in line and given an approximate date of delivery directly from Rolex corporate.

This gives Rolex tighter control over where and who buys the products, a better understanding of the market dynamics based on real time sales data, immutable watches in terms of reducing fakes by knowing who has purchsed the pieces and a MUCH HIGHER rate of return on a cost basis because Rolex would now get 100% of the retail (MSRP) cost of a piece. they could also reap some benefits for controlling reducing (sale) pricing on less than desirable pieces.

IF... Rolex was a new company trying to gain market share, then this model would be problematic because a developing company needs exposure and needs to build a reputation via a dealer network...

ROLEX doesn't need any of the dealer networks!

[Goin2drt]

Originally Posted by Mifune

The answer... (from a consumer perspective)... is for Rolex to move to a vertical integrate structure. this means, that in addition to making all their own raw materials and managing their own watch production, they move to a corporate owned retail location and 'ONLINE' order fulfillment model.

This also means, as orders are made and paid for, buyers are 'qued' in line and given an approximate date of delivery directly from Rolex corporate.

This gives Rolex tighter control over where and who buys the products, a better understanding of the market dynamics based on real time sales data, immutable watches in terms of reducing fakes by knowing who has purchsed the pieces and a MUCH HIGHER rate of return on a cost basis because Rolex would now get 100% of the retail (MSRP) cost of a piece. they could also reap some benefits for controlling reducing (sale) pricing on less than desirable pieces.

IF... Rolex was a new company trying to gain market share, then this model would be problematic because a developing company needs exposure and needs to build a reputation via a dealer network...

ROLEX doesn't need any of the dealer networks!

Stop it with your common sense solution. No one wants that because then the grays could not exist and the few that get theirs for MSRP couldn't brag about it and tell everyone how easy it is to get the hard to get models.

[Thug]

I mean, it’s also a lot of initial expense for Rolex and a bunch of headaches. Rather than having ADs deal directly with end consumer they need to now hire customer service reps, a team to handle logistics of online orders, and also dealing with returns.

A corporate owned location would be significantly more expensive with rent and an actual team in store. Assuming they want quality people, it won’t come cheap, plus benefits, payroll taxes, having to have their corporate team navigate local government rules and regulations. Where would you even decide where to open a corporate owned location? HK / somewhere in Asia? London? Paris? NYC? LA? How much more in profit would it actually bring versus current AD model?

[Calatrava r]

FWIW a lot of re-sellers say on utube videos they get most of their Rolex inventory directly from the dealers. This would tend to corroborate that.

[Etschell]

Originally Posted by Thug

I mean, it’s also a lot of initial expense for Rolex and a bunch of headaches. Rather than having ADs deal directly with end consumer they need to now hire customer service reps, a team to handle logistics of online orders, and also dealing with returns.

A corporate owned location would be significantly more expensive with rent and an actual team in store. Assuming they want quality people, it won’t come cheap, plus benefits, payroll taxes, having to have their corporate team navigate local government rules and regulations. Where would you even decide where to open a corporate owned location? HK / somewhere in Asia? London? Paris? NYC? LA? How much more in profit would it actually bring versus current AD model?

Rolex could actually get the owner to pay their rent if they leveraged it correctly. Of course these kind of out ot the box thinking exercises are probably too new for such a mature brand.

The AD should lose their status but who knows if they will. They will prob blame it all on the one sales lady.

[JodyHighroller]

Originally Posted by trippinjimmy

Just some food for thought...if Rolex truly cared about the "shortage," why would they alter the warranty cards by removing the individual's name who purchased the timepiece?

Think about that for a minute. Initially, the only thing stopping me from going grey was I wanted my name on the warranty card (not to mention the name on the card allows for tracking of so called flippers). Now, that no longer detracts me from purchasing grey if I so choose. With its absence on the new version, I think it really shows the company's true colors.

The thing is though, the impossibility of getting a Rolex has allowed me to find other watches that are equally, if not more, interesting and fun to wear. It almost feels like trailblazing, finding the next "hot" watch before anyone else knows it exists. Actually walking into ADs and trying on watches, only buying the ones I love.

Just my $.02...YMMV.

It was mentioned on here shortly after the new cards were announced that the change was due to some privacy laws in the EU. Can’t confirm 100%, but I wouldn’t be surprised. In the same post it also mentioned that another reason for the change was because a lot of people were calling the original selling AD on the card to help authenticate. They’d ask if they sold this watch on x date to client xyz? No one likes receiving those kind of calls.

[Thug]

Originally Posted by Etschell

Rolex could actually get the owner to pay their rent if they leveraged it correctly. Of course these kind of out ot the box thinking exercises are probably too new for such a mature brand.

The AD should lose their status but who knows if they will. They will prob blame it all on the one sales lady.

Maybe I’m reading it wrong but I’m not seeing how a landlord would be willing to forgo rent on a commercial space, especially from a brand like Rolex.

[JediRolex]

Well this explains why I have been on "a list" at CDP for over a year. LOL.
Every time I would inquire about the status of where I stood on the "list" they would take down my information again as if it was the first time.

CDP showing no love or goodies for the common man like myself.

[XtraCrispy]

WOW! I bought my Bluesy and Tudor 1926 from their Woodfield Mall store. I stopped in there last weekend to talk to my guy there about getting a turquoise OP. He was acting very strange and wouldn't give me a straight answer as to how long it would take. After pressing him for a time frame, he finally told me "about 2 years" and he can't even take my name. This is very strange as this store will always put your name on the list with a 50% deposit. Of course their showcase was 98% empty - only a couple of Cellinis and a handful of DJs no one wants.

[DLRIDES]

These “back door” sales have been discussed and quite evident for years, and Rolex doesn’t care !

Rolex could change this practice in the US and Europe in two days if they wanted. Representatives could buy advertised “new” watches from many different reputable “gray” dealers, trace the serial #’s to affiliated AD, any watch that was sold direct to “gray” from an AD would immediately have their franchise pulled and Rolex property removed ................ problem solved, let the chips fall where they may !

The corrective action is normally simple, fallout and cleanup can be messy.

[rambo99]

it's a win win situation for rolex and gray dealers, why would they change it? the only one who suffer is the other luxury watch brands, not even the customers.

[Joshua_J0]

Originally Posted by XtraCrispy

WOW! I bought my Bluesy and Tudor 1926 from their Woodfield Mall store. I stopped in there last weekend to talk to my guy there about getting a turquoise OP. He was acting very strange and wouldn't give me a straight answer as to how long it would take. After pressing him for a time frame, he finally told me "about 2 years" and he can't even take my name. This is very strange as this store will always put your name on the list with a 50% deposit. Of course their showcase was 98% empty - only a couple of Cellinis and a handful of DJs no one wants.

That's very surprising, just a couple weeks ago they were able to put my name on a "list" for the Cermit which is arguably as hard if not harder to get than the Turquoise OP, wonder if they're worried that their AD status might get pulled? Very worrying, might have to start looking for a new AD

[dannyp]

Originally Posted by drfrankenstein

I did not read the full complaint but it also seems there are definitely accusations of tax fraud, money laundering etc. I don't think it is just wrongful termination because it was filed in federal court. Someone please correct me if I am wrong here.

I think you're looking at this backwards: This wasn't filed in federal court because of alleged money laundering and immigration fraud. Rather, those were the justifications for filing a wrongful termination lawsuit that, on its merits, probably belongs in state court, in federal court under RICO, with the plaintiffs classified as whistleblowers.

[SMD]

Originally Posted by dannyp

I think you're looking at this backwards: This wasn't filed in federal court because of alleged money laundering and immigration fraud. Rather, those were the justifications for filing a wrongful termination lawsuit that, on its merits, probably belongs in state court, in federal court under RICO, with the plaintiffs classified as whistleblowers.

Correct. And the first motion will be to remove to state court as there is no federal jurisdiction here unless the plaintiff and the defendant have what is referred to as diversity jurisdiction. And if they had that they would have pleaded it in the complaint.