Major Rolex AD Accused Of Racketeering And Selling Directly To Grey Market

Rolex is all about the brand. People get annoyed that they can’t buy the brand they want by walking into a shop and walking away with a Daytona. It’s chicken and egg, if everyone who wanted a Rolex could buy one then the brand would be as strong and they wouldn’t want it (generally speaking).

you can’t have it both ways, either is want to feel special or you want easy accessibility.

It's a bit weird Rolex seems to have nailed this strategy for their models, but with Tudor, if you can wait 6-12 months after release, even the desired models can be had easily.

Or would this be on purpose?

They sort of managed it with the Black Bay 58, especially the black but it comes down to brand recognition again. The Tudor brand just doesn’t have the same allure even if on the face of it they make very fine watches.

I tend to agree but also disagree here since I think there is also a maximum amount that people are willing to pay as a premium. Price elasticity has its limits. When I see a guy with a new pepsi on a social event I ask him how the hack did you get that piece. My judgement will be positively : he is or very well connected! Or negatively: a complete wanker that paid 10k over list. Thats not envy but thats a real honest thought. At a sudden point you get a maximum to the spread of grey market price versus retail.

But there are other reasons too. Some of my clients and some collectors I have spoken to are actually selling their modern as well as vintage rolex pieces. Some due to the big increase here in The Netherlands of robberies. Others who are old school collectors who tell me that for them a 5513 is just a 3k watch and they don't give a sh*t about all the little differences anymore. A bit been there done that also. But they then tell me that also some of the fun is out of the hobby, bit of nostalgia.

What @Rado63 say here makes really sense

I ve heard from an AD about last year sales. He told me it were the national clients that saved 2020. They always sold the majority of their stock to tourists from Asia. Now they serve their local clientele whom they actually neglected and find quite troublesome since they all are a bit time consuming... (they all want to drink champagne). It took them 6 weeks instead of 4 to sell all their stock. It would not surprise me that the majority of this precious metal stock is sold to grey dealers and flippers cause their aren't that many people over here that wear gold models. All these basket buyers will drop their pieces on the international market and they will find their way to a new home anyways.

Big questions is this whole lawsuit is if Rolex cares and should get even more control on their distribution; as a brand should you tolerate or even stimulate basket buyers since this is a major trigger for the grey market. Some say they don't care about the grey market cause they sell out anyways. I dare to think different since Rolex is in it for the long run. These kind of events can be a tipping point since it reveals to a wider more mainstream public what all the watch insiders already knew for ages. It gives some inside in how some of the bad ADs work and that's not in line with the brand image. Rolex is not like Richemont whose shareholders deman high short term ROI. They are more like PP with the Stern family who just say we don't want the hype for the SS 5711, let's do something different (although the hype with the nautilus successor will even get bigger of course). It's their way to make a point that the PP Crown Jewels are complicated watches and that they don't want to rely on the same kind of posts from instafamous bloggers or traders and flippers. I can't belief that if you are working as top manager for Rolex and you arrive at an airport in Geneva, then walk to the Rolex store on a A1 location and you see no items in the windows, that you will be very proud of it. Fact is that there are a lot of pieces available on the open market but they are not available on places where Rolex is in control. Lets hope that this little lawsuit episode should be a bit of wake up call for Rolex cause when shit hits the fan..

Any news?

https://dockets.justia.com/docket/illinois/ilndce/1:2021cv00775/396016


here is an updated chronology for those with spare time

Read a couple articles that provide the view that the plaintiff is just out for a quick buck with her outrageous claims. CD Peacock is fine well respected watch merchant. Impeccable standards and pure as the new driven snow. However the defense was quick to demand the plaintiffs complaint was sealed lest the supporting information related to the allegations see the light of day.

Presumable yes. Given the volume of info revealed to the public due to this case, seems there is a fair share of spilled milk already.

Nasty plaintiff... Such claims can't be true ... right?😁

From official Rolex Jeweler Agreement. This kinda indicates they cannot sell to anyone they please. Just my feeble interpretation

3. RETAIL SALES ONLY. Jewelers will sell Rolex products only to
ultimate consumers, at the retail level, in transactions that
originate over-the-counter at its authorized location(s). All
other methods of the sale (except for Rolex-approved
corporate/presentation sales) are considered transshipping. Rolex
is the sole distributor of Rolex watches in the United States.
Rolex has not authorized any ORJ or any other person to act as a
wholesaler or subdistributor; therefore, any transshipment of
Rolex watches, even if unintentional, is prohibited. ORJs may not
sell watches to customers referred from outside their local
market area (unless the sale is transacted in person at an
authorized location), nor may they pay a feel for any referrals.