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

R
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Another variable is the weakening currencies from all the government spending to occur. If this results in inflation, MSRP on Rolex will rise again and again and again. We got a big breather from the relentless price hikes over the past few years, until just lately, but perhaps look for two hikes a year to be the norm for a while.
 
R
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JohnLy JohnLy
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...
Watches are luxury goods, which as you personally found out, are very sensitive to the health of the economy. In severe downturns, the last thing most people want are watches, at any price.
 
Observer
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We can be sure that supply will snap back, but demand is far more complex. To what degree were buyers buying with credit, and are they possibly maxing out available credit during a time of limited or zero income? Not to mention that, if this thing drags on much longer, the used market may get flooded with recent purchases.

It’s going to be interesting to observe.
 
harrymai86
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watch3s watch3s
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.
Oh my god maybe it is my chance to buy the pepsi jubilee at retail price 😁😁 if that list you mention clears up, as I remember I have been waitlisting around 8 months
 
Ninja2789
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To further comment about the demand side of the equation, I would argue that it’s not just people being able to afford the watch during a recession (eg. fear of losing job, looking at loss in retirement fund). I also think there are two other factors.

Changing Perception of Rolex as Stable Value
Many young collectors have only seen a bull market when it comes to watches and Rolex has been leading the charge. When never see prices fall, you can justify paying a premium to access those perceived “stabilized” prices.

However, it’s obvious secondary prices have declined. Even if it’s just 10-15%. IMO, this starts cutting out a lot of the demand since buyers now have additional risk. Will prices stabilize above MSRP? Will it stabilize below? The additional uncertainty should inherently causes a discount.

Increased Opportunity Cost of a Marginal $1
Ive always felt the stock market was a bit too frothy/overvalued ever since 2019. As a result, I felt more comfortable putting an extra +$1 into watches because the opportunity cost was low.

However, with the large correction in the equities market there is an opportunity to invest at a more reasonable valuation. Now that opportunity cost of putting money into watches is much much higher and the value of putting +$1 into the market looks much better than it did just 2 months ago.

As a result, I also think you’ll see declining demand for these watches because there are more investment opportunities in the market. Always easy to keep some powder available.
 
jhross98
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My pure speculation is that a market crash like this the quality always rises

Spread between true A vintage and mediocre will expand as never before

I think modern watches are in big trouble
 
S.H.
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jhross98 jhross98
My pure speculation is that a market crash like this the quality always rises

Spread between true A vintage and mediocre will expand as never before

I think modern watches are in big trouble


Yes, somehow I get the impression too that really nice vintage may correct but stay, crappy vintage and most watches post 1990s - even Rolex, well, the bottom may just fall out.
 
Nobel Prize
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On a side note I sent a watch to service to Rolex on the first week of March. I assume it will come back somewhere next year
 
Evitzee
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S.H. S.H.
.........most watches post 1990s - even Rolex, well, the bottom may just fall out.

Very,very unlikely to happen, especially with Rolex. There may well be some price corrections until the supply/demand situation balances out, but desirable watches pre-virus will be just as desirable post-virus.
 
OmeGez
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Agreed - any Rolex that’s discontinued will be ‘pretty’ safe.
 
To the moon
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This is just an excuse to kick Rolex again but, unfortunately for those who try The crown is way bigger and more powerful than your size 9. As I see it, it's only the few that can't get the piece they want, kick, scream and whine. Whereas I'm happy, sure the market is slow at the moment but so what, the only ones who need to worry is the ones that couldn't build a relationship with the dealers and paid double bubble just to look important with the latest piece on there wrist in front of people who also had no idea.
 
R
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Great comment about new Rolex collectors have only seen a bull market. Rolex like everything else is cyclical and this could be a prolonged bear market. The bear market actually started late last summer in watches. Prices peaked on the used market and have been declining steadily.
I suspect a lot of folks will move on if they realize they will actually lose money on the purchase of a luxury steel sports watch.
 
steelfish
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Sadly (for people wanting to buy) when lockdown is over and factories are back up I’m sure it will be same old story again - possibly a very slight downturn or pause in grey prices as people might focus on saving goals initially.

However the public seem to have very short memories so I’m sure we’ll soon see the current levels of IG fuelled consumerism, living above means soon after we’re all back. Possibly for a short window of opportunity, people who haven’t gone bust or changed focus might be able to take those AD calls and hoover up some good stuff.

Personally IF I actually get an AD call I’m sticking with my principles - ‘sorry mate you treated me like dirt pre-epidemic - I don’t need or want the stock you’re trying to shift now your ‘list’ has dried up’.
Edited:
 
OmeGez
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The only thing separating Omega and Rolex is the price retention of Rolex.

I’d imagine Omega sales to be up if Rolex lost its enticing price retention. As there’s nothing else separating them. It would go back to choosing one or the other for the pure fact that you prefer the looks/finish etc.

No date Sub ceramic is £6,300
Omega no date ceramic Seamaster is £6,500’ish..?
 
harrymai86
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There are numerous threads on TRF stating the price has fallen down on major SS sport model such as the Daytona hulk batman pepsi... they even are keeping track of the sold prices on a basis, and well it is true that hyped models starting to fall down, with dealers offering prices as low as msrp now to private sellers.
 
Amg786s
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Ss models will always be desirable. Eventually and probably not that far in the future we may well see the hype scenario return (love it or loathe it).
 
larryganz
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harrymai86 harrymai86
There are numerous threads on TRF stating the price has fallen down on major SS sport model such as the Daytona hulk batman pepsi... they even are keeping track of the sold prices on a basis, and well it is true that hyped models starting to fall down, with dealers offering prices as low as msrp now to private sellers.

Since I don't plan to ever sell my Hulk or Pepsi GMT II Mk2 I'm not too worried about the value dropping, but it's good for those who have not been so fortunate to find one that they can afford. And they still hold value better than most of my Omegas.

If I ever get in a financial bind and have to sell something, I might be better off selling a couple of Rolex than 5-6 Omega for the same amount of cheddar. I'd get peanuts for my ceramic SMP chronograph, or Ti Planet Ocean 8500, or X-33 Solar Impulse vs what I paid new.

But my Speedmaster Pro's hold their value better, since I bought many of them used and they've been regularly serviced. If I didn't need that much money I could sell 2-3 of them and not lose much of anything in the process. Maybe my POLMLE has held it's value, but it's one of the last Omegas that I'd sell along with my Speedy Tuesday ST1 or Ti Planet Ocean 9300 (or WatchCo SM300).
 
Martin_J_N
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I won't be rushing to buy any watch in the immediate future, whilst the money is there and can be spent I have realised that there is more to life than a box full of obsolete trinkets, even though these trinkets are stunning gorgeous and totally mesmerising.



Oh okay, I will buy once things settle down, who can resist 🙄
 
wbfondren
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jhross98 jhross98
it doesn't really look to me like SS prices are down at all based on this. maybe patek sees different trend than rolex ?

these are incredibly strong #s and pre-covid prices

https://www.sothebys.com/en/buy/auction/2020/watches-weekly-patek-philippe?locale=en

I’d say new SS Patek’s have come down considerably. Buyers of 5711s and 5167s etc have dried up a lot and they’re moving 15-30% lower than what they were 2-3 months ago. This is just coming from what I’ve seen watches offered (either to me or to friends) over the past few weeks. But a few of those Sotheby’s watches were surprises for sure.
 
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