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How will the factory shutdown affect the crazed stainless steel market?

  1. wbfondren Mar 25, 2020

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    I know we’ve seen a slow down in the ‘hyped’ watches like the Daytona and GMT. But I have to think that the factory shutdowns will have an effect at some point. Any thoughts?
     
  2. vicsdca Mar 25, 2020

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    Currently, supply and demand are both low (people not in the mood to buy watches and ADs closed anyway). If the demand is high again when factories reopen, it will be like nothing happened. Buying euphoria can be expected when things go back to normal.
     
    Edited Mar 25, 2020
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  3. Evitzee Mar 25, 2020

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    Overall little effect in the long run. The Rolex SS sport watch situation is not going to change dramatically, desirable watches will always be in demand and if demand exceeds supply we know what happens.
     
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  4. valkyrie_rider Mar 25, 2020

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    My 2cs: if the economy (specially in the USA) goes into a deep dive (no pun intended) like in 2008/2009, I would expect a price correction on overinflated prices for SS diver watches.
     
  5. wbfondren Mar 25, 2020

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    We’ve definitely seen slight corrections to ‘hype’ watches even in a week. 5711 and 5712 models have dipped in value anywhere from 10-20% and you can see slightly lower price corrections for Rolex stainless sports models.

    I know lots of grey market dealers that are sitting on large inventories of ‘hype’ watches are probably hurting, I’m just wondering if anyone thinks the factories will be shut down long enough to bring the bubble back up?
     
  6. Alphasports Mar 25, 2020

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    Once we get thru this mess don't discount the possibility of "revenge" purchases creating a supply/demand anomaly (I shouldn't use the term "discount" in a Rolex thread 'cause I don't think we're going to see any). I wouldn't be surprised if we see a higher number than usual of Incomings down the road.
     
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  7. wbfondren Mar 25, 2020

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    Fair point. I’ve always wondered if I should sell my 116500LN but this little episode has solidified it in my collection. Better to not worry about timing or opportunity cost etc. and just enjoy the watch for years and years to come.
     
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  8. To the moon Mar 26, 2020

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    I would say that due to the time frame this year for new purchases, if you can manage to buy a 2020 piece they will be that little bit more special like in history anything slightly quirky makes a great topic. How about a Corona Daytona? :whistling:
     
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  9. wbfondren Mar 26, 2020

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    Maybe Omega will release an LE.. But in seriousness it is a remarkable year for a number of unfortunate reasons. We should celebrate the small things and be thankful for what we can enjoy! That’s why I appreciate OF and watches so much as they provide a great distraction for us all.
     
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  10. Evitzee Mar 26, 2020

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    Other than Corona beer which is an established brand, I don't think the word 'Corona' attached to a product will be viewed as a positive in the future.
     
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  11. MTROIS Mar 26, 2020

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    To answer OP’s question, one would need to factor in the duration of the plant shutdown... which is going to be heavily influenced by how quickly France is able to overcome this virus as many Rolex employees cross the border into Switzerland every day.

    I don’t have a crystal ball, but I bet that Rolex plants won’t reopen by Easter time... so this will certainly not help the overall situation (given that they were working overtime before this, once could also suggest that the two elements will balance each other).

    At the same time, many ADs are shut down across Europe and parts of the US right now, so this MAY lead some other parts of the world to see a temporary uptick??

    Once the points of sale re-open though, then as some mentioned above, revenge purchases may make things even worse?
    It is really anybody’s guess… as usual with the “crown”. :whistling:
     
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  12. ClarendonVintage Mar 26, 2020

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    Business as usual, now online.
     
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  13. wbfondren Mar 27, 2020

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    My AD in town now is just about bone dry on stock and has delivered all of his waitlisted watches to customers. It’ll be interesting to see what happens for sure.
     
  14. asrnj77 Mar 27, 2020

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    A brief search of watchrecon shows grey market is down. Batman’s that had asking prices of $14200 are now in the high $12,000s. Daytona’s that were asking $24,000 are now down to $20,000.

    Sure, everything could rebound but I’m going to think that things will get worse (for the sellers market) before they get better. Of course, lower prices are always better for the buyer. Even though the factory isn’t producing watches right now I’m sure there are thousands that are waiting for the ADs to reopen. Once they re-open there will be a ton of available watches for purchase that will flood the resale market and further drop prices.
     
  15. Foo2rama Keeps his worms in a ball instead of a can. Mar 27, 2020

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    It’s just going to slow the trend of the flipper market returning to MSRP. Demand is lower so restriction of manufacture has loiter effect on end price.

    car production will be much more impacted, are you worried about new cars going up in price?
     
  16. To the moon Mar 28, 2020

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    If you're buying at retail then it's still a win, win situation. Sure the profit margin is down but, the prices were over inflated anyway. Compare the pre owned market prices today to 18 months ago and they are still up.
     
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  17. Evitzee Mar 28, 2020

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    Rolex's watch production, and others, will probably be down at least 20% for the year. Thus, retail pricing will be kept strong once production is resumed. For Rolex, taking 200,000 units off the production line for the year will really pinch the retailers as to what they will get. Forget SS sport models, their bread and butter DJ lines will be really curtailed, especially going into the fall and Christmas season. I don't see how this really depresses the grey market at all. Some poorly capitalized flippers will have to liquidate stock but it will all find a home, either with another grey marketer or a new retail buyer. It may be a bit soft now because people aren't buying, but once the coast is clear and the economy starts up again pent up demand will be strong. Desirable Rolex models will always be desirable, and the price will reflect that.
     
  18. JohnLy Mar 28, 2020

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    I was a grey market dealer of Pateks during the 2008-2009. My own experiences were selling my existing inventory for large discounts. The prices dropped dramatically and on some models never came back, the 3970, 5970, and 5050 are great examples. It was a business decision to sell at a loss and buy back in at the new adjusted prices. I can also remember going to IWJG shows and seeing trays of Daytonas that were not moving at very good prices. Are we in a similar situation I really don't know but I don't seeing the market coming back soon. The big question, will it and if so when. I quit being a dealer several years ago so I really don't have a pulse on todays market, maybe one of the dealers on the forum could chime in.
    Just my 2Ccs worth...
     
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  19. wbfondren Mar 30, 2020

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    Could be a great take in the long run as it makes a lot of sense. I think this could certainly happen for the most desirable models, but will fail for those that were only desirable because people couldn’t get what they really wanted? Just a thought, but it’s hard to imagine that the entire secondary market (for new SS watches) will return back to what it used to be 3-4 months ago.
     
  20. watch3s Mar 30, 2020

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    My opinion? Likely nothing. If the economy continues to tank, eventually greys will buckle and lower their prices to move stock. ADs will likely be making the telephone rounds and suddenly, that "list" clears up. People who have truly wanted to buy the steel sports models will have kept their powder dry and are ready to grab. The demand will be satisfied and the market corrected. Who knew such a black swan scenario would unfold.
     
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