What time is it? Watches and horology

That's not the structure though, they are not hiding ownership. They don't answer to shareholders who would demand higher profit margins or carry debt on the balance sheet that is funding expansion. They can massage profits but it's a requirement of their status that a percentage still goes to charity.

Also not sure what that has to do with anything

I don't think they are limiting supply artificially. Personally I think their steel models are too cheap at rrp and the market seems to agree. I base that on a comparison with other brands prices.

Rolex are not interested in making steel models, they want to deal in high end stones and metals. Why would they not, they are competing at the cutting edge of horology in terms of technique and reputation. Same with PP, visit their museum in Geneva, they have handwritten ledgers from the beginning of the company detailing the individual watches they made and the customers etc. They have never been volume producers, in fact they probably couldn't find the skilled labour to increase production to a point where demand was filled.

So what it has to do with anything is - they don't artificially limit supply and the proof is the number of very complicated high end extensively hand built items they produce every year.

Money laundering is certainly a thing, it was quite a problem in auctions for a while, especially the art market, and I think I heard the Swiss authorities started clamping down on it.

But there are other things too, you could see it as essentially a capital gains free investment, which is what a lot of the current hoovering up of any and all Rolex at retail looks like. And of course there is also the ability to wear an easily liquidated high-value watch across a border rather than carry large amounts of cash. But I really don’t know what is and isn’t happening, I’m just assuming if it’s plausible then it’s probably going on.

In case anyone interested - half price at £699.

[https://www.tkmaxx.com/uk/en/men/accessories/watches+jewellery/watches/silver-tone+khaki-automatic-watch/p/76504668?]

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Yeah, I agree. The statement they made a couple of months back was really unusual for Rolex. But they are at pains to point out that they can’t just turn the tap on and make 2x the watches they currently do.

And even if they could…why would they? Flood the market, demand drops, residuals drop, and you’ve just invested probably billions of CHF in a factory and employees that you no longer need.

I really don’t think they have deliberately acted to manipulate the market to the point where their own boutiques are literally empty. They just aren’t acting to counter it, either. Ultimately I think they are fundamentally ultra Swiss and conservative and simply do not want to change course from what has kept them at the top for so long. And as you point out, they don’t have shareholders screaming at them to increase production. Not that I think many shareholders would have much of a problem with the way things are going at Rolex right now.

Regarding Rolly prices, I suppose low interest rates + pent up post-Covid shopping urges + boomer money from all those no mortage people = squillions to splash out. And maybe these people are not buying classic cars so much because of gas guzzler shame, so they spaff the Aston Martin budget on something which gives them a boasting opportunity when they wear it at the golf club. Eta: and of course the endless stream of stories about Rolex shortages and Paul Newmans and Chinese millionaires.

Had a smart lunch with the fam today so my Lord Marvel got a wear. I really do love it.

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Yesss, super watch.

I tried on something different yesterday.

Although I absolutely love the look of my Seamaster, the lack of a date indication does bother me on occasion. Something I wasn’t expecting actually but yet, here we are.

Initially I was keen on the Speedmaster 57 which I still think is absolutely gorgeous but not so much a do-it-all watch.

As I do expect to travel quite often again next year, I figured I’d have a look at a GMT. I was especially keen to understand the actual height and size difference compared to the Seamaster, which is substantial. It wears smaller than expected as the case and lugs hug the wrist nicely. The height wouldn’t bother me much, I don’t wear shirts that often.

Definitely a different beast and a statement piece in my opinion.

Didn’t buy anything, just wanted to see and try in real life.

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Aren't Rolex at the limit of their factory? Would be a hell a risk to invest to expand only for demand to drop off because all the crypto bros lost their shirts

“they are competing at the cutting edge of horology in terms of technique and reputation. Same with PP, visit their museum in Geneva,”

I disagree, Rolex are not sat at the top table with the Haute Horology masters. They churn out sports watches, some of them use precious stones/metals and that’s it.

I haven’t been to the PP museum but I have been to the manufacture (along with AP and JLC) the work they do is on another level compared to Rolex.
I shot several Hybris Mechanica pieces at JLC, Patek Split seconds chronograph, L&S datograph etc etc and a Daytona looks like it popped out of a cracker in comparison.

Had this on last couple days. One of my first autos a few years back.

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I agree Rolex are sensible not to increase output; I find it odd that they don’t raise prices for sports models a bit more though, as they are clearly significantly under priced in authorised dealerships.

I was being generous to Rolex. It pretty obvious they don't compete on complex movements and they are like the tractors of the upper end of watch making. However they are pretty decent tractors, reliable and will take a licking and keep on ticking. Where they are competitive is in their production methods, handling of jewels, metal processing etc. They do also innovate in the movements although they don't really like risk.

I doesn't help their reputation that they make steel sports watches but it does mean they get a lot more watches out there than PP, which is apparently what the people want.

I remember when I was looking to buy my first Rolex. Alternatives like Omega were priced well below, Tudor was ugly, AP was niche, Blancpain had just been revived. All those brands and more were cheaper or similar prices. I couldn't get a Daytona from a dealer, nor could I afford a second hand Nautilus for £15k.

These days it seems like all those brands are the same rrp as a Rolex (which you can't buy) or vastly more. How can it make sense not to just raise the rrp until you can keep some in the window. They've fallen behind a lot of brands by price that were never in the same league. It's no wonder they sell so well. A Fifty Fathoms is £12k now!

Tbh I think the same with as with a lot of asset classes. There is more wealth than ever before and not enough traditional investment vehicles for it (eg gold) so people have looked to other items of scarcity, which are relatively easy to purchase, store etc. and also use to avoid paying taxes. (See farmland/woodland also)
It’s one of the reasons that NFTs have kind of gone crazy (but also more money launderyesque stuff too). My guess is that with them no longer making the 5711 and it already holding cult status and being scarce, this has just kicked things up a notch.

Don't forget unprecedented low interest rates. Physical gold would have been a better bet if it wasn't manipulated so badly through the paper trade.

And printing shit loads of money

You can set your watch by a Rolex price rise, it just turned out that everyone else has raised double or triple what Rolex were raising. Rolex RRP basically goes up 5% a year plus whatever’s happening to the Swiss franc. A 36mm Oyster perpetual looks like an absolute steal at 4.4k even though they were 3.9k two years ago, given that a 38mm Aqua Terra that was 4k two years ago (and already rather rich at that) is now 4.9k.

People used to complain about Rolex price rises!

Have we done a Hive mind on the production cost of a submariner or similar Rolex? Just to understand how much “profit” is being given charity wise / laundered.

Brands like Omega/Longine have a similar build quality and quantity control with less of the investor value. They still must make a solid manufacturing profit

I just wonder how much, base cost, parts and labour it is to make a Rolex submariner these days, when they retail at £7k if you can get one?

Yes, they are really falling behind. Surely there's a discussion within the company about selling the watches for nearer the price the market is already sustaining. Unless it would just cause them problems dealing with the extra income!

Again, I think they’re just being very, very conservative and slow moving.

Looks that way. I do admire that, reminds me of a Swiss friend.

You can’t compare Longines build quality to Rolex. Not even close. Loads of heritage and nice enough watches but they aren’t in the same ballpark in terms of absolute integrity and unflappability. The feel, the finish, even the basic materials. I have a friend who had lume fall off the dial of his Conquest Heritage. Another whose bracelet clasp failed after a few months.

Omega are a lot closer but still aren’t as refined, especially their bracelets. But compare RRP, Omegas generally match or exceed Rolex prices these days.

You can imagine them thinking, not to worry, soon people will stop buying our watches. We just need to be patient and hold our nerve.