Forums Latest Auctions Members

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

  1. wbfondren

    wbfondren Mar 25, 2020 11:14am

    Posts
    143
    Likes
    80
    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

    vicsdca Mar 25, 2020 11:27am

    Posts
    235
    Likes
    512
    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 11:39am
    watch3s and wbfondren like this.
  3. Evitzee

    Evitzee Mar 25, 2020 11:33am

    Posts
    1,933
    Likes
    2,908
    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.
     
    wbfondren likes this.
  4. valkyrie_rider

    valkyrie_rider Mar 25, 2020 1:49pm

    Posts
    331
    Likes
    403
    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.
     
    watch3s and Motik like this.
  5. wbfondren

    wbfondren Mar 25, 2020 4:04pm

    Posts
    143
    Likes
    80
    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

    Alphasports Mar 25, 2020 4:48pm

    Posts
    230
    Likes
    541
    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.
     
    wbfondren likes this.
  7. wbfondren

    wbfondren Mar 25, 2020 6:16pm

    Posts
    143
    Likes
    80
    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.
     
    Adorjr likes this.
  8. To the moon

    To the moon Mar 26, 2020 2:38pm

    Posts
    351
    Likes
    436
    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:
     
    apsm100 and wbfondren like this.
  9. wbfondren

    wbfondren Mar 26, 2020 3:47pm

    Posts
    143
    Likes
    80
    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.
     
    lando and Lonestar like this.
  10. Evitzee

    Evitzee Mar 26, 2020 4:36pm

    Posts
    1,933
    Likes
    2,908
    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.
     
  11. MTROIS

    MTROIS Mar 26, 2020 8:23pm

    Posts
    883
    Likes
    2,853
    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:
     
    wbfondren likes this.
  12. ClarendonVintage

    ClarendonVintage Mar 26, 2020 10:14pm

    Posts
    703
    Likes
    700
    Business as usual, now online.
     
    wbfondren likes this.
  13. wbfondren

    wbfondren Mar 27, 2020 4:47pm

    Posts
    143
    Likes
    80
    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

    asrnj77 Mar 27, 2020 10:24pm

    Posts
    688
    Likes
    781
    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

    Foo2rama Keeps his worms in a ball instead of a can. Mar 27, 2020 10:50pm

    Posts
    12,271
    Likes
    16,828
    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

    To the moon Mar 28, 2020 1:36pm

    Posts
    351
    Likes
    436
    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.
     
  17. Evitzee

    Evitzee Mar 28, 2020 2:15pm

    Posts
    1,933
    Likes
    2,908
    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.
     
    rafabond, OmeGez and To the moon like this.
  18. JohnLy

    JohnLy Mar 28, 2020 2:46pm

    Posts
    236
    Likes
    265
    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...
     
    asrnj77 and MTROIS like this.