This civil lawsuit is the least of CD Peacock's problems. Even raising the ire of Rolex or Patek Philippe is not their biggest problem. Their biggest problem is the IRS, an entity that has extraordinary power to investigate and cripple a business and personal citizens. If the allegations prove true then you can probably assume these sorts of practices also occur in their traditional lines of jewelry and precious stones, it's an endemic way of doing business with this firm. Bottom line, Peacock probably generates a lot more income then they report on their corporate state and federal income tax returns. That's a juicy bone the IRS thrives on.

In the mid-90's there was the case of Francis X. Vitale of Spring Lake, NJ who was the largest fine antique clock dealer in the US (Vitale & Vitale). He had a purpose built gallery in Spring Lake stocked with ultra rare clocks by Breguet, Janvier, Jump and other top European makers, many in the $400,000+ range. I've got five clocks that I bought from him, he was the classic 'nice guy', he really was passionate about antique European clocks. The problem was he built the business by embezzling $12.5 million from his employer over eight years or so through fake invoices which he was allowed to approve. One snuck through when he was away and his boss confronted him and the whole show came tumbling down. The company was insured for the loss and they did not want to prosecute, but the IRS did. They nailed him on wire fraud and tax evasion, he never declared the money and evaded the tax due. I think he went to prison for 2+ years and made restitution by selling all the clocks at auction which recouped most of the money which went back to his ex-employer. The IRS will be all over this company going through their past tax situations looking for evasion.

 

Gosh, it might be easier to determine if you’re going to love a watch by... getting to see it, in person, at an AD, before buying lol

I sent two local ADs an email inquiring about getting on a waitlist for a stainless Rolex. I’m a vintage guy, I’ve never bought a new watch in my life (aside from an SKX). I own a Datejust and a 1680 Red MK1. They didn’t even bother to respond. And I totally get it, Rolex is insane right now and you don’t know me from Adam. But if you can’t bother to respond to an email, even if it’s just to say “sorry, we’re full, it’s not realistic” I can’t bother to open my wallet for you. This won’t last forever, and you should be treating your local customer a little better than that.

 

Agree completely - the watch nerd segment is very small in comparison to the prestige buyers. Alienating the nerds won't matter if the others are still clamouring for the watches.

The only thing I might take issue with is describing the people willing to pay massive premiums for these watches as "normal"...

 

With another sentence I might have made a distinction between the larger group of prestige buyer proper, and the far larger group of people who wish they were something like prestige buyers.

It’s all them together, vs those of us paying massive premiums instead for a watch case that isnt even polished!

 

Dude on another forum posting about the premium on a new Daytona being totally worth it...

"As you wear it, you are recognized and celebrated as someone with a $30,000 watch."

Initially it was funny, but then turned a bit sad when he said this:

"I don't expect you to understand everyday life as a Rolex Ceramic Daytona owner."

Yikes.

 

Scotty doesn’t know.......

 

It’s not the Daytona.

 

I'm familiar with the parties involved. Have been to these stores and spoken with GMs. Sad but true story.

 

Well... which part of the story is “true”?

 

Probably shouldn't say "true" but have friends that have had dealings and negative experiences, even beyond Rolex. So the allegations don't surprise me.

 

No worries... probably another example of a human being (me) who is too self-centered anyway.

I will honestly challenge the premise that it is only at the fringes of nerd watch people. Anybody who has the means, who would like to buy a Rolex SS professional model these days and walks into an ADs before being laughed at because he has no clue of the current situation may also display some “negative perception” after such experience. Are we, watch nerds, even more susceptible to this because we re-hash it in a thread like this one? Surely! But come on, we surely are not the only ones.

Normal people will clamor no matter what and, yes, even more when there is this scarcity because it must be proof that Rolex is the best.

I will certainly not challenge this, all the more since we do all know that the scarcity of the SS models has driven the sales of all other models, including PM ones where their margin is higher... but still wonder if they would not make more money by increasing their prices.

While I understand your example, I will challenge it to an extent: yes, Rolex’s value lays a lot in their brand. But not exclusively IMO. If they have no product to sell, then what do they become? An idea? A concept? So, as much as they are sitting on billions of CHF and can probably live of off their reserves for the rest of times, if they just become a financial institution (which I am sure they already are), if they want to remain relevant as a manufacturer of Swiss watches, I am imagining that they need to sell some watches REGARDLESS of the brand image, no?
To take an example: would Ferrari be as strong as a brand if they would ONLY compete in automobile racing and no longer sell road cars?? One can wonder but it seems to me that as much as Enzo HAD TO get into that business of road car manufacturing to finance the needs of his racing Scuderia, today both sides of the business are probably as important to one another’s perennity.

I think we take some things for granted, including the fact that a brand will always exist. While it takes a lot of efforts over a long period of time to cultivate a brand to cult-status level, and while a brand that would have achieved such high level may seem indestructible, it is not impossible to kill such a brand if (grossly) mismanaged. We shall see what Rolex will be in a generation or two... and I honestly wish them the best. Truly.

 

Seymour Holtzman owner extraordinaire, he has a plethora of slathering press and friends that would swear on a stack of Bibles the claims are all ridiculous.
Guess we will see if it disappears with a confidential settlement with non disclosure agreements.

At least the judge is not a Ronald Reagan appointee

 

That is an old Daytona, the experience does not count.

 

The Rolex AD is under pressure to reach sales goals. They receive certain watches by allotment based on sales volumes. In turn they sell multiple watches to the same buyers because these buyers will buy everything to get the opportunity to buy all the steel sports. No shortage of supply of Rolex steel sports, there are hundreds of Daytonas , or GMT, etc, for sale everyday on the secondary market. You too, can get a Daytona at retail but first you just have to buy every watch they offer to you. So if the AD has a limited supply of certain high demand references, then the AD will sell to premium client before a guy who just wants one watch. I have no idea what they were doing at CDPeacock, but certainly they were selling multiple pieces to the same client. In the state, out of the state I don't know, I just know that every AD wants every piece out of the store, let the secondary market deal with holding the inventory.

 

It’s a good question, and an economist (or any number of other experts) could surely do a better job than me at making analogies or explaining the model.

Would you rather sell 10 oranges today, or ensure that you can sell 2 oranges a week for the rest of the year?

The point as I understand it is this: while of course the company needs its commodity to sell, it’s only a commodity: there are as many suppliers of oranges as there is a demand for oranges, and for the most part - fundamentally - any orange will do to prevent scurvy.

Just the same, the ugly truth is: if someone needs to tell the time for day-to-day purposes (as opposed to scientific, etc.), almost any watch (or cell phone) will do. Most of them very cheap.

So in a world full of a commodity that are fit for purpose, how does Rolex sell its watches first, and for the best price?

It’s the Rolex brand. And broadly construed, that “brand” is the universe of little lies we tell ourselves about how superior a Rolex orange tastes, it’s luscious orange skin, it’s exclusivity - cost no object. Forget that all we really need to do is prevent scurvy/tell time.

But again, I don’t purport to be an expert at economics or marketing by any stretch; instead, only that I’m just aware enough that Rolex is not fundamentally in the business of selling oranges, so much as it’s in the business of being viewed as the the place to buy oranges.

Perfecting the latter business model may entail at time’s not selling the maximum number of oranges for maximum price today. Anyone can sell 10 oranges today. The Rolex brand is what ensures the company can sell 2 oranges a week for eternity (so long as they maintain the brand).

If Rolex went to sell the company, the sales price would have relatively zero relation to the underlying book value of watch inventory or watch-making tools included in the sale. It would instead relate primarily to the good will and brand power included in the sale.

That’s all I meant.

But I’ve had a winter’s cocktail or two, and should type less ... a picture in penance

 

@cvalue13, like you, I decided to save on oranges costs, got some mandarins instead, and also splurged on a Rolex with the change...