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Richemont destroys $539 million in watches

  1. Sgt_Bilko May 22, 2018

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  2. kov Trüffelschwein. May 22, 2018

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    You don't pay taxes on something you haven't sold ;)

    Precious metals are refurbished and reused, the movements usually are reused as well. Not everything goes into the trash bin but still ::screwloose::
     
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  3. ulackfocus May 22, 2018

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    Sooner or later, the whole market (not just watches, but EVERYTHING) has to realize that internet discounting is here to stay. Retailers and manufacturers need to reshape their thinking for the new world or go extinct.

    Unfortunately, the people buying off the internet cause two huge issues:

    1) If they want to see & try the product, they go to a store that carries it. Often they take pictures with their phones, and then go home and shop at their leisure in their pajamas. They simply don't realize that the stores will vanish if they don't give them a chance to get the business.

    2) Internet purchases often lead to internet returns. Most people think that's great! Besides, what do they care what happens to an item after they return it? They don't realize is that the last person said the same thing a few weeks ago, and the return went back in stock to go to the next person.

    There is grey market / internet commerce system in the new Wild West with no standardized policing.

    Yeah... maybe you don't understand how business write offs work. Sgt_Bilko wasn't talking about sale tax.
     
  4. Sgt_Bilko May 22, 2018

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    No but they had the expenses of producing the watches and then destroying them. That could be written off against profits from general sales.
     
  5. bonerp May 22, 2018

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    Saw this regarding Cartier too to stop discounts on unsold products. Guess a 20k watch has a parts value of less than 5% of that? Parts will be reused on more saleable models?
     
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  6. Foo2rama Keeps his worms in a ball instead of a can. May 22, 2018

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    Please, it was just 1 limited edition Panari that cost them 500 dollars to make.
     
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  7. kov Trüffelschwein. May 22, 2018

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    This was my misunderstanding :thumbsup: the rest is fine, thanks :)
     
  8. rcs914 May 22, 2018

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    So we know Cartier was one of the brands - I wonder what other ones? I assume and hope that no ALS were destroyed...
     
  9. cicindela Steve @ ΩF Staff Member May 22, 2018

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    Yep I had to destroy 5000 "Cicindela" watches last year 'cause I only sold 3 :(

    I understand Ulackfocus was in the same boat ::facepalm2::
    Merchants-Wines.jpg
     
  10. gostang9 May 22, 2018

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    Auto industry has tried to learn the painful lesson of matching production to sales with mixed results. Japanese OEM's strive to build only cars that consumers have purchased/ordered while American OEM's struggle with over-producing. In automotive they book manufactured cars as a 'sale' when they push them off to dealers. The dealers get incentives for taking cars into their inventory (with goal of selling of course) and the whole supply chain becomes a bit of a 'push' with the OEM's trying to force all produced vehicles into the market. The resulting effect is usually steep discounting that results in erosion of both new car sales price and also resale value when the eventual flood spills over to the used market. VW has ~300,000 cars stored in lots they recalled over the 'diesel-gate' scandal.
     
  11. Fatcat May 22, 2018

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    Also Richemont use Black Market for the lower price watches to make “new customer” and one day maybe they look for a more expensive one, regularly I have access to listing where the watches are simply sold at 50% all over the year , sometime other brand for the LV group .
     
  12. jason10mm May 22, 2018

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    Hang on, is "Black Market" the name of some sort of clearance house or are you referring to actual stolen goods? Or did you mean "grey market"?
     
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  13. thatonewatchdude May 22, 2018

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    This is a road that companies will have to go down, especially within luxury timepieces as they are attempting to now build on exclusivity. Some brands successfully practice this, such as Hermes being known to be a wasteful company but they are a highly exclusive brand and not just everyone shops there. This is the only way to battle the grey market, working at the boutique level, a lot happens combatting grey market dealers.
     
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  14. Fialetti May 22, 2018

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    Since Richemont purchased Yoox they are now in the grey/discount luxury market themselves - though not, at least as yet, for their own watches.
     
  15. ClarendonVintage May 22, 2018

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    This made me a little angry
     
  16. larryganz The cable guy May 22, 2018

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    I had to scroll up to see if this was an old article from April 1st.
     
  17. Archer Omega Qualified Watchmaker May 23, 2018

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    It's the same in the watch world - the manufacturer considers it "sold" when they sell it to a regional distributor...not even to the dealer level...
     
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  18. Sgt_Bilko May 23, 2018

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    All of this is a damn shame. I was looking forward to picking up a vintage NOS Cartier in a few years time for about £300.
     
  19. Archer Omega Qualified Watchmaker May 23, 2018

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    It's a poorly written opinion piece in my view. It mixes up too many things and is intentionally trying to fire people up.

    The one key thing they have said is that this is a common practice with luxury goods, because much of a brand's value is in the name and how it's protected. This shouldn't shock anyone really - companies that aren't even luxury brands often destroy perfectly good product for business reasons.

    But because it's watches, watch collectors get upset - as I've said before these are companies just like any other, but the widgets they make just happen to be watches. They are products, not sacred cows...
     
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  20. Edantony May 23, 2018

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    Grey Market is here to stay too, and an essential part of the watch business.
    Watch companies who don't blind themselves know when they are selling to wholesalers or distributors/retailers who are at risk of reselling those goods on the grey market.

    What watch companies need to do is develop an offer exclusive to their stores. Offline exclusive. Similar to the strategy most companies pursue in travel retail, where they develop travel retail exclusives (gift sets, value packs etc...).