Without claiming to know anything about Rolex's business, as a former bean counter I can say the term "constraining production" is an amorphous term. Does it mean not adding a shift or not investing in more plant? If they are at or near full capacity of their existing plant and staff they are not constraining production even if they don't expand.
Some of you might remember the "Cabbage Patch" doll phenomenon of 30 years ago. There was huge demand, re-sellers were getting way more than retail. Coleco invested on increasing production facilities for dolls at a time their cash flow was short due to video game investments. The bubble burst and Coleco suffered bankruptcy. Of course iconic brands like Rolex shouldn't be as volatile as a toy but the same principle applies.
IMHO Rolex knows their business. They are doing something right. Being organized as a not for profit can't be too bad either.
Click to expand...