Presented without comment, Swatch stated this in their half yearly report "Uncompromising action against grey market dealers, especially in Europe, the Middle East, Eastern Europe and South America, at the expense of a short-term negative impact on sales in the first half year in the triple-digit millions. In the long term, this will lead to positive effects, especially in the major markets." "Inventories increased slightly from the beginning of the year by 2.6% to approximately CHF 7.1 billion. The increase occurred in finished products and can be attributed to suspension of deliveries to grey market dealers. " https://www.swatchgroup.com/sites/default/files/media-files/pr_halfyear_report_2019_en.pdf
Although this hurts those who like to save money, hopefully it will help all of us in sustained long-term resale values of our watches (for those of us who like to shake up our personal inventory occasionally). For example, compare the resale of Rolex to Breitling. One actively discourages discounting, the other (apparently) does nothing. Current shortages aside, natch, since the Rolex market has gone absolutely nutty.
Yeah, good luck with that. God forbid that Omega adopts Rolex’s marketing strategies. I, for one, would not look forward to being on a waiting list for a year for the privilege of paying full retail price to an Omega AD.
Well, you can't argue with Rolex's sales numbers. I would not be surprised if Swatch execs had been watching with interest.
do we actually know rolex sales numbers? do they report any true numbers in detail? thought it was always a "guesstimate" of about 1mil per year...
And that is stock valued at the lower of cost or NRV, add AD margin on and it’s more like €13billion of watches in stock
Anyone outside of the Rolex inner circle that thinks they know how they operate or believes their numbers is having a lend There is no way in the world they are selling as many subs as normal if nearly everyone on this forum hasn’t seen one in a Boutique or AD for nearly 2 years
25 years or so ago Audemars Piguet was getting clobbered by grey market sales. They had AD's all over the place and much of the stock was being diverted to the grey market at deeply discounted prices. They sucked it up, pulled most of the AD's, reduced production and got control of the situation. Now they are very powerful with relatively little discounting in their main lines and very few AD's in most markets, and a lot of product is sold at the boutiques. It can be done but you have to be prepared for some pain. Unfortunately many manufacturers are dependent on the cash flow and don't pay as much attention to rampant discounting that hurts the brand long term. Maybe Omega is getting religion.
Exactly what type of "action" (and on what legal basis) could Omega take against any seller who acquires a piece of property legally? At most, I imagine they could take some "action" against ADs who supply grey market sellers; but there's nothing they can do to anybody else. Grey market dealers aren't violating any laws by buying from ADs who choose to supply them.
i have been hearing that Swatch group is all about sales target and numbers. As long as this is their strategy it would be difficult for control Grey Market. I believe that a shift in their core policy is required.
They can do whatever they want, but the only way they'll increase prices is by reducing supply. They're not going to magically increase the number of people willing to pay $8,000 for a Seamaster the market is pricing below $5,000..
Rolex is making as many watches as ever, and selling all they can make. If you want to understand what's happening with Rolex, the best info comes from Rolex Forums (duh). "Just look on Chrono24 as an example. There's hundreds of "hard to get" pieces which are way overpriced." "Also the Grays are now in control of the market. Since getting a watch from an AD is a very slim chance and the Grays are buying up everything that comes on the market outside of the ADs. There is none at ADs, it's all in Gray hands. Which I think are weak hands if the sh*t hits the fan."
If they truly crack down on Grey, they will need to make a lot fewer watches. But with $7.1 B USD in inventory that looks to be almost 1 year 6 months of inventory. Am I reading this right? So how they really going to do this in the short term? I think this is just stuff they say to sound good for share holders. Who will tag this post and post an update in one year? There are 17 or so brands in their group, would be nice to see it broken down by brand, but we will never see it. I am not that familiar with the other brands, but on the Omega brand I think they need to make fewer watches if they want to avoid Grey. Grey happens when you need to off load "unpopular" watches or when you made way too many. It also happens when you have popular watches (and don't make many), but the latter is probably easier to address. And I am Omega Fanboy #1, but still not buying what they are saying about Grey.
Can anybody explain what it means to "crack down on" or "take action against" GM dealers? What authority does Omega have on someone with whom they have no contract and what, exactly, can they do to them? Thanks in advance.
