Today, I happened to notice that Jomashop is selling a large number of Rolex references, many at a discount relative to the official price. My subjective impression is that this does not happen very frequently, so I wanted to more formally tease out some implications of this development. I assembled a spreadsheet of the listings and ran some numbers.
For this discussion, I will focus on the references which Jomashop identifies as "Men's" (due to the fact that I am unfamiliar with the other references which are listed). Jomashop lists 197 references for sale at a discount relative to list. This is a remarkable variety of watches on the grey market, expecially considering that Rolex contracts likely penalize ADs who resell through third party dealers. The average discount across these references is 10% with a minimum discount of 1% (mostly 36mm Datejusts in precious metals with unique dials) and a maximum discount of 31% (Cellini Pink Dial Automatic Men's 18kt Everose Gold Watch ref 50705RBR). Please note that the average I'm reporting is not weighted by the inventory of each reference (in fact, nothing here will involve such weighting since Jomashop doesn't reveal its stock numbers).
I was curious if the discount was constant across all price points. Scatterplot of Jomashop Rolex discounts. The answer is no. Discounts are typically higher for higher priced references, as shown by the figure here. I ran the numbers and, for every $10k increase in price, Jomashop increases its discount by .46% (approximately half of one percent, this result is statistically significant).
Next, I was curious if the discounted references were connected to materials, in some way. The answer is yes. Approximately 85% of the discounted references (168) were in gold or platinum.
Finally, let's turn to the topic of which models are discounted and by how much. Discount amount by model. Approximately 91% of the discounted references were one of three models. There were 22 Cellini references, 55 Datejust references, and 102 Day-Date references. The Cellini had the highest discount, at 14.2%. As the figure shows, the Day-Date has the widest range of discounts, with an average of roughly 11.6%. The Datejust had the lowest average discount, at 5.4%.
In summary, these listings on Jomashop suggest that buyers should carefully consider whether they are willing to pay full retail for certain references. At higher price points, they should likely expect a lower price from sellers. I'll also note that the overrepresentation of precious metal references in these discounted listings is consistent with my last piece, where I noted that Rolex' costly foundry may not presently generate the type of revenue the brand expects (hence gold reaching its tendrils into the Explorer 1 design, in a coming piece I will share feedback I received suggesting this may not be the case).
News recently broke that watch brand Rolex was on the receiving end of a €91 million fine levied by French authorities. A view of Rolex's offices in France. Source: Google Maps. Generally, the headlines ascribed this fine to Rolex's alleged practice of prohibiting online sales of its watches. However, I've looked closely at the situation and I don't think those headlines are completely accurate (although they're probably what French authorities would want you to believe). I came to this conclusion after reading a Google translation of a 134 page report issued by the French Competition Authority on December 19, 2023. Generally speaking, such documents do not make for engaging reading. However, for those who know how successful Rolex has been at maintaining a comparatively high level of corporate secrecy, the French report provides a compelling and rare insight into some specific aspects of the brand's business. It is these insights which lead me to conclu...
The other day, I was poking around in Swiss business registries (as one does on a weekend) when I noticed that Jörg Bucherer was still listed as the "president and delegate" of luxury watch retailer Bucherer, AG. A Rolex clock in front of an AD in New England. Since Bucherer, the man, passed away on November 8, 2023, this clearly raises some questions. More curious was the fact that Rolex ownership of Bucherer, the business, was not indicated in Bucherer's commercial registration and Rolex's own business registrations did not indicate a lash-up with Bucherer. News of Rolex's intent to acquire Bucherer broke roughly eight months ago. Now, I will admit that I do not understand or know all the nuances involved in Swiss business registration. I do know that registrations are administered by the Swiss cantons (roughly equivalent to states in the US) so perhaps this was simply a matter of delay in updating the registrations across cantons (Rolex is registered in G...
There's a quip in the world of finance: "nobody rings a bell at the top or bottom of the market." AI generated image of someone looking for the bottom of a chasm. If you're on a trading floor, you know it is the start of the day because of the "opening bell." But, if you reach the low point for prices, there is no bell. Everyone just has to do their best to figure out if prices are finally going to start increasing again. This is certainly true of watches. According to Chrono24's Chronopulse index of watch prices (full disclosure, I've contributed to this index), we've just begun the third year of a "bear market" for preowned watches. Chronopulse overall index of late. The rate of decrease in prices has certainly slowed, but there hasn't been an overall turnaround in prices just yet. It is hard to say if we're at the bottom or if we're just on a gentle downslope that will continue for the near term. Right or wron...
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