Current state of affairs from a prominent NY AD.

[Frank McKay]

I spoke with an AD in NY yesterday who I have a solid relationship with for many years now. While the boutique(s) may be closed, the inquiries, calls and emails have increased. Those who were previously on the list or inquiring on the hot pieces are under the impression that due to the current economic conditions, the watches may be easier to source right now. AD stated that he doesn’t see anything changing in the near future in terms of wait times. He believes that it will only take longer to acquire sought after pieces. Rolex supply will take a while to ramp up with the closing of the facilities overseas.

[173rdabn]

Absolutely logical. Bargain hunters will be disappointed. Current economic situation may reduce some prices on the gray market, but that's only a maybe.

[Mystro]

I initially thought this Covid crap may change the market but after thinking about it and watching what and who still have a healthy income, I see very little change in the market. Many incomes have actually increased a lot for various reasons. This may be a record year for my wife and myself as certain professions and skills are in extreme demand. Factor in no one is going on vacations or spending money going out so it makes the income grow even more. It’s a buyers market now with luxury goods like cars and real estate and anyone with a sold income is sniffing out the deals and making a move. Luxury watches are small ticket items in comparison and there is still plenty of people with even more disposable income that will keep the market stable.

[Bosscheto]

Market in Switzerland is already changing, also the so called shortage during the stopped production will be felt in the next two years, not now, and concerns the new models that we have not seen yet. The stock for now has been produced last year, or 2018, it may have a delay due logistics, but not so much. AD is trying to play tough, they are not tough, they are bleeding more than the grey dealers. They have higher fixed costs.

Rolex is still unsure when to announce the new models because they do not want to announce without not having the stock to back it up. This is what Rolex is producing now, not SS Daytonas and Pepsis.

ADs are playing tough over the phone, walk into a boutique with cash in hand and it is a different conversation. Here the so called rare OMEGA 321 movement for 14k that should have command a super premium and compete with the Daytona is on command. You pay now, you get your watch after 3 max 4 months. They do not ask how many watches you own, who r u etc. I do not know for how long it will last, but this is the new reality. This happened to me yesterday, not a story of a friend of a friend.

USA is 2-3 weeks behind, you closed 2-3 weeks behind etc. Wait till it is open, we will see a different conversation. Also all across the board the prices have dropped massively, Rolex, Patek, AP and FP Journe are holding to some extend, but the overall drop in consumption of luxury goods is staggering.

The only company with real balls is Richard Mille - he increased prices with 20%.

[Calatrava r]

I do not see any change in the scarcity of hot models anytime soon. As a poster above so wisely observed, no one is spending money on travel and leisure at the moment and many people may actually have more funds freed up to buy nice watches. Not to mention all the time on hand to ponder the next watch. Several big used watch dealers have said on-line their business is actually robust and increasing.

[RoscoPico]

I don't think we've actually experienced what is likely to happen in the market, a healthy recession. That may eliminate a lot of buyers who are on the fringe of affording these watches. But I think we'll only see slightly less demand. And obviously Rolex has an answer for that. My guess is a 20% drop in prices for some brands, and less of a drop if any for Rolex. my two cents

[Bigblu10]

You guys are living in a watch forum bubble. As those who lose their jobs and businesses and struggle to keep food and a roof over their head many less will be interested in buying a 10K SS watch that they really don't need. Just as the US economy has contracted due to this pandemic, the watch market will do the same. I would venture to say the TS on this forum are not moving many pieces and are sitting on them.

[Bigblu10]

Originally Posted by Mystro

I initially thought this Covid crap may change the market but after thinking about it and watching what and who still have a healthy income, I see very little change in the market. Many incomes have actually increased a lot for various reasons. This may be a record year for my wife and myself as certain professions and skills are in extreme demand. Factor in no one is going on vacations or spending money going out so it makes the income grow even more. It’s a buyers market now with luxury goods like cars and real estate and anyone with a sold income is sniffing out the deals and making a move. Luxury watches are small ticket items in comparison and there is still plenty of people with even more disposable income that will keep the market stable.

I couldn't disagree with you more. I am happy you and your spouse are financially flourishing during these hard times, but tens of millions aren't. It is delusional to think that staying home from a family vacation will equate to spending 10K on a luxury watch. I don't buy that for one second

[Marcjvr]

Originally Posted by bigblu10

i couldn't disagree with you more. I am happy you and your spouse are financially flourishing during these hard times, but tens of millions aren't. It is delusional to think that staying home from a family vacation will equate to spending 10k on a luxury watch. I don't buy that for one second

+1

[Marcjvr]

ADs don’t survive just on selling hot model Rolexes to WIS folk.

They survive selling datejusts, Pm pieces, omegas, Tudors, Tag Heuer, gold/diamond jewelry, etc. to non WIS folk. Those are the vast majority of their customers.

Those customers are drying up fast

[superpop]

Changes like this do not happen overnight, it takes time. Right now a lot of people in the USA are still hanging on. Give it another 60 days and things will get interesting. Right now most are covered by frozen house payments and other relief. Banks will go from friend to foe once the government isnt looking. All the over leveraged dummies that follow the adage of "I don't pay off anything, I want my money working for me" will be the first to go. As Buffett would say, we will see who is wearing swim trunks when the tide goes out. A lot of these youtube financial gurus who think over leveraging and flipping stuff is a source of sustainable income are going to get their bells rung.

[Xerxes77]

Originally Posted by Bigblu10

You guys are living in a watch forum bubble. As those who lose their jobs and businesses and struggle to keep food and a roof over their head many less will be interested in buying a 10K SS watch that they really don't need. Just as the US economy has contracted due to this pandemic, the watch market will do the same. I would venture to say the TS on this forum are not moving many pieces and are sitting on them.

Agree with you.
We don’t see the effects of the coronavirus crisis yet.
Also coronavirus crisis it’s not ended!!! This is very important!
I think the watch market will be hit like other industries segments.
Rolex it’s a giant. But they need to sell......

[LJubel328]

Originally Posted by Bigblu10

I couldn't disagree with you more. I am happy you and your spouse are financially flourishing during these hard times, but tens of millions aren't. It is delusional to think that staying home from a family vacation will equate to spending 10K on a luxury watch. I don't buy that for one second

+1

Sure the .1% will remain able to purchase these watches (just as they were in '08-09), but the vast majority of individuals who were purchasing luxury goods will pullback on such purchases. Look back at the last recession, there was not a premium paid for any model 1-2 years in to the Great Recession. This pullback in demand will be even more amplified given many in the last 1-2 years have purchased on pure expectation of price appreciation (e.g. I purchase this watch and can sell it for x multiple). Just my $0.02

There is a delay in economic numbers, and they will get worse. Just look at yesterdays retail sales numbers. This is the first sign of what is happening to consumer purchase preference. Those horrific numbers were reflective of March (when the U.S. was on lock-down for only half of the month). April will be much worse given nearly the entire U.S. was on lock-down for the whole month. Couple this lock-down with huge spikes in unemployment and it will be detrimental.

Though, I do agree that this time has resulted in certain individuals benefiting greatly, however, the few that have benefited does not come any where near to offsetting the individuals who have suffered. This is yet another occurrence that will cause a larger divergence in income distribution.

[Bosscheto]

Originally Posted by superpop

Changes like this do not happen overnight, it takes time. Right now a lot of people in the USA are still hanging on. Give it another 60 days and things will get interesting. Right now most are covered by frozen house payments and other relief. Banks will go from friend to foe once the government isnt looking. All the over leveraged dummies that follow the adage of "I don't pay off anything, I want my money working for me" will be the first to go. As Buffett would say, we will see who is wearing swim trunks when the tide goes out. A lot of these youtube financial gurus who think over leveraging and flipping stuff is a source of sustainable income are going to get their bells rung.

I agree with you. My fear is, that certain industries here are hit massively, and there is no hope for them till next season. Tourism had an incredible hit, for March and April the hotels had worked at 3-5% capacity. The ones in Geneva are used to be full for the first 4 months because of SIHH and more importantly the Auto Salon, which were canceled. The airlines are on intensive care, they are trying to buy them out, and there is slim hope for some capacity to open late summer, but Swiss Air has 6 000 employees. Geneva is hit very very hard, also the watch industry - they talk as if it has been a war. A lot of small brands, suppliers, small shops will simply not make it. This create a snowball effect. Also around the lake, we have the Fesitval season - Cully Jazz, Montreux Jazz, which are huge events - dead. No EURO either.

There are big questions, will people travel that much, on top of this the Swiss Franc is too strong, which impacts the export. I got lucky, we started working virtual, and we will most likely have a 40% drop in revenue max, but we are save even if God Forbid we have a second lock down, which I think will not happen, even if there is a second wave.

Saying all this, the hot watches are still relatively hot, but the rest none is touching with a stick, and this is the problem. People do not want to buy a watch, unless is one of the top 5 models, where the risk is smaller.

[Mystro]

Originally Posted by Bigblu10

I couldn't disagree with you more. I am happy you and your spouse are financially flourishing during these hard times, but tens of millions aren't. It is delusional to think that staying home from a family vacation will equate to spending 10K on a luxury watch. I don't buy that for one second

Why not? We spend more than that for one vacation alone. Add up the mini weekend vacations and there is a lot of disposable money not being spent. Then not going out on weekends, concerts, car events, etc... Pretty much all our entertainment budget isn’t being spent for the year. For example, my wife is spending more money this year on other expenses like landscaping projects, etc..
A lot of people are out of work but how many of them were even in the demographic of buying a luxury watch to begin with?

Neighbors of mine are buying new cars because of the deals everywhere. New pools, home improvement construction is everywhere in my middle class section of the state. Contractors are booked out 2 years in advance now. There is disposable money out there being spent.
It’s not all doom and gloom as the media likes reporting everywhere. Empathic platitudes are more socially acceptable than accurate media reporting.

Our county is the size of Rhode Island and has had a total of 14 reported Covid cases. Neighboring county about the same size has had 1 Covid case. I am sure thousands have probably had it and recovered without complications. It will never be reported and we just now finding out this has been the case all around the country since December.
I am pretty sure my entire family had it back in February. Thank goodness our area is finally opening back up.
A very common view point in my area is this entire Pandemic lacks accurate reporting and perspective from more than just North East metropolitan areas. No denying there are many hard-hit areas but more areas of the USA are not hit hard.

[LJubel328]

One more thing, you are speaking with an AD. What did you think they'd tell you?

"Yes, our business is struggling right now. Would you like to buy this ss daytona?"

It is delusional to think that of all the businesses hurting from this pandemic that ADs are thriving.

[LJubel328]

Originally Posted by Mystro

Why not? We spend more than that for one vacation alone. Add up the mini weekend vacations and there is a lot of disposable money not being spent. Then not going out on weekends, concerts, car events, etc... Pretty much all our entertainment budget isn’t being spent for the year. For example, my wife is spending more money this year on other expenses like landscaping projects, etc..
A lot of people are out of work but how many of them were even in the demographic of buying a luxury watch to begin with?

Neighbors of mine are buying new cars because of the deals everywhere. New pools, home improvement construction is everywhere in my middle class section of the state. Contractors are booked out 2 years in advance now. There is disposable money out there being spent.
It’s not all doom and gloom as the media likes reporting everywhere. Empathic platitudes are more socially acceptable than accurate media reporting.

Our county is the size of Rhode Island and has had a total of 14 Covid cases. Neighboring county about the same size has had 1 Covid case. Thank goodness we are finally opening back up.
What this entire Pandemic lacks is accurate reporting and perspective from more than just North East metropolitan areas. No denying there are many hard-hit areas but more areas of the USA are not hit hard.

You are correct that certain areas have not been hit hard, but to think that because there is not many cases now that you will remain unaffected. I grew up in a small Midwestern city and then moved to NYC. I've always found the things in vogue in the large metropolitan areas would hit the smaller areas 1-2 years later. I suspect it won't be different here.

I could go on and on about this, but lets rather wait it out to see how it all unfolds. At the end of the day I never wish people to lose jobs, struggle to pay mortgage payments, et cetera; however, I also have to be realistic.

[maveric]

Maybe Rolex is different, but its competitors don't sound optimistic.

[swish77]

Originally Posted by Bigblu10

I couldn't disagree with you more. I am happy you and your spouse are financially flourishing during these hard times, but tens of millions aren't. It is delusional to think that staying home from a family vacation will equate to spending 10K on a luxury watch. I don't buy that for one second

Perhaps you're right, but I'm not so sure. The folks who had enough disposable income to buy Rolexes in the first place will be the last to really feel the pinch, if at all. (And there are indeed plenty of businesses that haven't felt the pandemic effects at all, and in some cases business is booming. Online shopping is at Christmas-like highs right now. I work in the art gallery/photo world. Business is good.)

Sadly, like most economic downturns, the people with the least amount of money to begin with are usually the hardest hit. I'm not sure that includes the dude who has a half-dozen Rolexes in his watch box.

[htrap2294]

Originally Posted by Mystro

Why not? We spend more than that for one vacation alone. Add up the mini weekend vacations and there is a lot of disposable money not being spent. Then not going out on weekends, concerts, car events, etc... Pretty much all our entertainment budget isn’t being spent for the year. For example, my wife is spending more money this year on other expenses like landscaping projects, etc..
A lot of people are out of work but how many of them were even in the demographic of buying a luxury watch to begin with?

Neighbors of mine are buying new cars because of the deals everywhere. New pools, home improvement construction is everywhere in my middle class section of the state. Contractors are booked out 2 years in advance now. There is disposable money out there being spent.
It’s not all doom and gloom as the media likes reporting everywhere. Empathic platitudes are more socially acceptable than accurate media reporting.

Our county is the size of Rhode Island and has had a total of 14 reported Covid cases. Neighboring county about the same size has had 1 Covid case. I am sure thousands have probably had it and recovered without complications. I am pretty sure my entire family had it back in February. Thank goodness we are finally opening back up.
A very common view point in my area is this entire Pandemic lacks accurate reporting and perspective from more than just North East metropolitan areas. No denying there are many hard-hit areas but more areas of the USA are not hit hard.

I'm going to guess that you're in State College or near State College?

[mongrelnomoad]

Originally Posted by Mystro

Why not? We spend more than that for one vacation alone. Add up the mini weekend vacations and there is a lot of disposable money not being spent. Then not going out on weekends, concerts, car events, etc... Pretty much all our entertainment budget isn’t being spent for the year. For example, my wife is spending more money this year on other expenses like landscaping projects, etc..
A lot of people are out of work but how many of them were even in the demographic of buying a luxury watch to begin with?

Neighbors of mine are buying new cars because of the deals everywhere. New pools, home improvement construction is everywhere in my middle class section of the state. Contractors are booked out 2 years in advance now. There is disposable money out there being spent.
It’s not all doom and gloom as the media likes reporting everywhere. Empathic platitudes are more socially acceptable than accurate media reporting.

Our county is the size of Rhode Island and has had a total of 14 reported Covid cases. Neighboring county about the same size has had 1 Covid case. I am sure thousands have probably had it and recovered without complications. It will never be reported and we just now finding out this has been the case all around the country since December.
I am pretty sure my entire family had it back in February. Thank goodness our area is finally opening back up.
A very common view point in my area is this entire Pandemic lacks accurate reporting and perspective from more than just North East metropolitan areas. No denying there are many hard-hit areas but more areas of the USA are not hit hard.

I'm not sure it's wise to extrapolate from your own personal experiences, and treat it as universal.

[Etschell]

The Richemont report was very telling.

The Swiss watch market is going through a very tough time that wont end soon. Some projections are showing it is worse than the Quartz crisis. Many brands will go bust. Some estimates are up to 25 percent of Swiss brands.

The exports of Swiss watches under 3k are way way down. Rolex, Patek and AP prices have fallen from their 2019 highs.

Now will a SS BLRO or SS Daytona remain inflated? Yes. Part of this has to due with the price increase thar ocurred just 4.5 short months ago. Part of it has to due with the fact that these three waches are the most sought after. But the overall price increase saved Rolex prices from further drops.

Even a 2019 SS jubilee BLNR is now closing in on retail. Wait until there is more stock.

If I were an AD I would be deeply concerned. Rent is a killer and say what you will about bundling but good luck getting people to do it when you do not have that hot watch in the safe. An AD is a businessman or businesswoman. Showing weakness is a terrible play to customers.

[-Ally-]

It must be that some of the 36M unemployed Americans are looking to spend their final salary payments on Rolex.

[Xenon]

This will essentially be a repeat of 2008 and maybe worse so picture bankruptcies, foreclosures, zombie houses, people on unemployment insurance for 3-4 years, low GDP, and slow economic recovery.

[ArtNouveau]

I don’t think we’ll really know how hard or not Rolex sales will be affected until several months from now, any predictions now are mere guesses. Going only on US facts, RolexUSA’s headquarters and warehouse in New York City have been closed for two months now and have not been supplying US dealers. The Rolex factory has now been closed almost as long so no new shipments from them to RolexUSA.
A few dealers have managed to stay “open” by remotely keeping in touch with their clients and just in the last couple of weeks some are now opening their doors. The most important thing to remember is they’re only working from the inventory they had on hand when shipments stopped. Sure a few of them “opened the vaults” but high volume dealers like mine have only scraps right now.
When shipments return and they start calling their preferred clients surely some of them will take a pass but the idea that ALL of them will say no is absurd. High demand pieces going straight to the case for first come/first serve is wishful thinking I believe. Reevaluate by Christmas to see if their sales really plummet.

[Mystro]

Originally Posted by htrap2294

I'm going to guess that you're in State College or near State College?

Yea, between State College and Williamsport. My wife is a district PostMaster and obviously has not closed any Post Offices. Employees have been working overtime 7 days a week. Many carriers have reported not feeling the best with a few days of fever and flu like symptoms and recovered at home and are now back on the job. Many of these carriers did get tested later and was confirmed of having Covid and recovered. It seems to have moved though her post offices in February. Totally normal attendance now with very few sick leave since April. These carriers were/are at a high risk of exposure and probably why it moved through so fast and early. The internal position is it probably has done this across the country with USPS carriers as well as UPS & FedEx. Aka herd immunity is now a possibility.

[padi56]

Originally Posted by Bigblu10

You guys are living in a watch forum bubble. As those who lose their jobs and businesses and struggle to keep food and a roof over their head many less will be interested in buying a 10K SS watch that they really don't need. Just as the US economy has contracted due to this pandemic, the watch market will do the same. I would venture to say the TS on this forum are not moving many pieces and are sitting on them.

Have to agree many today live on Rolex watch fantasy island instead of the real world of today.

[Mystro]

Originally Posted by mongrelnomoad

I'm not sure it's wise to extrapolate from your own personal experiences, and treat it as universal.

I am not, but certainly giving a snap shot of a popular perspective that isn’t being reported on. If the news isn’t negative, then it isn’t reported. Fear is being weaponized and exploited by the media.

[mongrelnomoad]

Originally Posted by Mystro

I am not, but certainly giving a snap shot of a popular perspective that isn’t being reported on. If the news isn’t negative, then it isn’t reported. Fear is being weaponized and exploited by the media and their angle of reporting.

Just because it's popular *with you and your circle* does not mean it is either true or widespread.

And your reply to my assertion demonstrates eloquently where you stand on a myriad of issues. Unfortunate, though predictable.

[Gwai]

Originally Posted by mongrelnomoad

Just because it's popular *with you and your circle* does not mean it is either true or widespread.

And your reply to my assertion demonstrates eloquently where you stand on a myriad of issues. Unfortunate, though predictable.

Not my skirmish at all but I don't think you are being fair here. Mystro's post is much more differentiated than your response makes it appear.

Cheers
Marc