25% Allocation Cut?

[ScarletFire]

Just spoke to an AD that said Rolex has notified them that all dealers will be receiving 25% less inventory this year due to about a 25-30% cut in production.

Has anyone else heard this?


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[Wobbly]

If the factories were closed for 3 months, then I guess production would be less this year by 25%.

Your AD maybe correct.

[ArtNouveau]

Haven’t asked mine but sounds logical.

[Calatrava r]

Its what I heard. Cannot allocate watches which do not exist.

[planemad]

Won’t really change availability as there will most likely be a drop in demand at the same time due to economic climate.

[Etschell]

it would be shocking if allocation remained unchanged.

[Oxfordian]

Wow, 25% less availability of zero availability.



People are struggling to get the popular SS watches now, what is a reduction in retail availability going to do to the grey market prices?

[Speedfreek28]

My AD told me something in that realm. Basically, all the watches coming in now were already queued for shipping out even before COVID and shutdowns happened. So after these shipments, supply will be less due to social distancing and other health precautions at the factories.

[drrd]

Heard similar from AD recently. Not 25%, more that they should not expect to have the allocation fulfilled this year. Which sounds worse!

[ScarletFire]

Originally Posted by Calatrava r

Its what I heard. Cannot allocate watches which do not exist.

I guess my thoughts before were that supply was artificially reduced – in that they could always make more watches but choose not to. If that was true then they could just ramp production up once factories opened to offset the production loss.

The fact that this is not what’s happening seems to either mean that they are actually topped out at what they could produce (demand legit outstrips supply) or are choosing to take a 30% cut in their bottom line this year as to not flood the market amidst potentially lower demand.


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[Hollie_Rollie]

Originally Posted by Oxfordian

Wow, 25% less availability of zero availability.



People are struggling to get the popular SS watches now, what is a reduction in retail availability going to do to the grey market prices?

Pepsi for 20k+ meanwhile you’ll be able spend 8 more grand and get a DD40...makes no sense

[PatrickGu]

Seems like it’s very convenient for Rolex to to reduce allocation at an economic crisis. They will make sure supply will never meet demand. It is getting ridiculous!

[Xenon]

Stopped reading at "Just spoke to an AD"

[PatrickGu]

Surely with them limiting supply even more , the grey will thrive on if. Aren’t they meant to fight the grey market?

[drrd]

Originally Posted by Xenon

Stopped reading at "Just spoke to an AD"

You have your own lines of communication with Rolex?

[Ranger67]

I believe there will come a time when the business model Rolex adapt will start to alienate people, also people willing to pay excessive grey prices will diminish over time.

[watchmaker]

Originally Posted by Xenon

Stopped reading at "Just spoke to an AD"

A broken clock is right twice a day

[watchmaker]

Originally Posted by Ranger67

I believe there will come a time when the business model Rolex adapt will start to alienate people, also people willing to pay excessive grey prices will diminish over time.

Arguably that would be a good thing. (An enviable problem for a business to have - too many willing customers).

Too many people want to buy Rolex watches, leading to them being perpetually out of stock, and a willingness by some to pay a premium.

If a certain percentage of people become alienated or otherwise lose interest in the brand, the problem is solved.

[Event Horizon]

Originally Posted by Oxfordian

Wow, 25% less availability of zero availability.



People are struggling to get the popular SS watches now, what is a reduction in retail availability going to do to the grey market prices?

[AJMarcus]

What’s 25% of zero?!

[Parapraxis]

Originally Posted by Ranger67

I believe there will come a time when the business model Rolex adapt will start to alienate people, also people willing to pay excessive grey prices will diminish over time.

You're dreaming if you believe that.

The reality is that this pandemic has allowed them to accelerate their plan to limit supply and better position the brand alongside AP and PP. Tudor can then move up and fill in the gap that Rolex left behind. The pandemic is the best thing that could have happened to Rolex.

[pav333hp]

Spoke to one of mu ADs over the weekend and was told similar story.

1. Rolex shutting down the factory reduced # of watches produced
2. Even with recent re-opening, due to health pre-cautions, production is not back to 100% capacity so less watches are still being produced
3. Both of above = ADs getting smaller allocations

[TellingTime]

Originally Posted by Parapraxis

You're dreaming if you believe that.

The reality is that this pandemic has allowed them to accelerate their plan to limit supply and better position the brand alongside AP and PP. Tudor can then move up and fill in the gap that Rolex left behind. The pandemic is the best thing that could have happened to Rolex.

The pandemic affected the Rolex supply....period.

Rolex is not planning to position their brand alongside AP and PP. Apples and Oranges.

Rolex is content operating in their own “sweet spot”.

[JR16]

Originally Posted by TellingTime

The pandemic affected the Rolex supply....period.



Rolex is not planning to position their brand alongside AP and PP. Apples and Oranges.



Rolex is content operating in their own “sweet spot”.

Agree with all 3 points . And don’t know why anyone would be surprised that there is 3 months worth of less inventory given the shut downs. It’s not like Rolex was immune .


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[DoctorA]

Or they could be trying to cut production moving forward to further escalate themselves up the Horology world like Patek and AP!

[Chewbacca]

That memo was dated 2016.

They’ve been reissuing it.

[Harry-57]

I visited my AD today to put the dead Z-Blue in to be fixed. It was by appointment and I met with their Rolex buyer. He said that last month (when they were closed) they sold a greater value of Rolex watches than in any of the previous twelve. The shop was closed but the money was coming in, and now the goods are going out.

He also told me that Rolex had notified them that the 2020 allocation had been reduced. This is apparently across the board and is to do with the production facilities being closed. Obviously, he doesn't have a crystal ball, but he believes that the grey market will soften. this year, even if the expected allocation decrease slows supply. We will see.

Despite the proposed allocation reduction they have recently received a decent shipment. He offered me a BLNR. I must say that it is far more beautiful on the wrist with the light moving over it than I imagined. I liked it a lot. But I passed. It was a kind offer which I greatly appreciated. It will be in another home who will properly appreciate it by now. I did, at long last get put on their BLRO list. It's a long list and they intend to revise it. I expect I'll be waiting years not months, and that will be fine.

The fun didn't end there. When the Z-Blue comes back it will be going into my wife's collection. She has fallen in love with it big time and she will wear it far more than I do. I was thinking about buying another Classic style watch to balance my collection and fill the Z-Blue gap with another long hand, coronet at 12 and baton look. After the cleverness of my SS Black Sky Dweller and the cheeky fun of the Z-Blue, an OP or DJ just would not have got it done. The next watch out of the AD safe was a TT white Sky Dweller. It would have been rude not to!

My subjective take home is that ADs will receive less this year. While strategically, this might dove tail with the three month lock down in the UK and the closure of the factory, my AD has been trading at good levels with existing inventory and in the short term at least, is still receiving good stuff. That may well change. Then again, the allocation forecast might be revised upwards - this is Rolex after all.

[Hollie_Rollie]

Originally Posted by DoctorA

Or they could be trying to cut production moving forward to further escalate themselves up the Horology world like Patek and AP!

They have to do better than changing the color of the dial for that to happen(assuming they release the blue dial sub in SS). Or adding red text and a cyclops to the SD. To me, nothing about Rolex seems “haute horology”. Rolex is like the Mercedes/BMW of the watch world. Even with the “shortage” everyone has one. Mercedes/BMW are not trying to be like Ferrari.

[Chester01]

Thats not likely to cause much trouble as the cut in output will be offset by the decline in interest. Research indicated even people with the dough to buy are sitting on the sidelines.

[Nikrnic]

I've heard nothing but i haven't talked to my AD lately. That certainly makes sense to me being this has been the weirdest year I can remember.

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