Rolex has surprised the entire watch industry.
Rolex, the undisputed king of the high-end watch business, shocked the world of watch dealers, collectors, and Ebay aficionados launching its own brand-backed “Certified Pre-Owned” (CPO) program.
Until now, Rolex has largely stayed out of the used market, so its entry into this lucrative niche has been surprising, especially considering that demand for its new watches is strong and it has long waiting lists for watches. customers. In addition, the second-hand market for Rolex watches remains relatively strong, with several models even selling for more than new, despite the recent drop in prices.
Rolex’s move into second-hand comes just as prices for the most sought-after high-end watches in the secondary market, such as the Rolex Daytona, Patek Philippe Nautilus and Audemars Piguet Royal Oak, have fallen 17% in the last 6 months at pre-boom levels.
Rolex said the program will allow authorized retailers and dealers who belong to the brand’s “official distribution network” to sell authentic certified pre-owned models with a new two-year international warranty.
This basically means that Rolex will certify and guarantee the watches, something that “will add value to the existing supply of used Rolex watches”, in the words of the Swiss watchmaker himself. Rolex said that watches that are three years old or older will qualify for certification, but initially only Bucherer boutiques in six European countries (Switzerland, Austria, Germany, France, Denmark and the United Kingdom) will offer these services from this point on. month.
Experts welcome the initiative
“I’m still surprised that it happened, I think it’s a strong company facing all sorts of logistical challenges, but I think it’s a positive step for the secondary market for pre-owned watches,” said Paul Altieri, founder and CEO executive of Bob’s Watches, a used watch dealer. “It will be interesting to see how this huge project plays out and how the prices are set.”
For other people, like Eric Wind, a prominent collector and owner of the high-end used watch store Wind Vintage located in Palm Beach, Florida, the movement did not come out of nowhere.
“The beginning of the program ‘Certifed pre-owned’ de Rolex has been an open secret for quite some time, it wasn’t a surprise,” Wind said in an interview with Yahoo Finance.
Wind believes that the opening to pre-owned watches is intended to help authorized Rolex dealers and boost the brand. “It helps Rolex retailers have something else on their windows to sell, since new Rolex watches are essentially out of stock, and it also helps legitimize the secondary market for Rolex watches,” he said.
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The retail effect, authorized or not
Despite the recent drop in the prices of the most coveted pre-owned watches, the earnings from watch retailers such as Watches of Switzerland (WOSG. L) have been consistent, even with the headwinds of the global economy. Although Watches of Switzerland sells new watches (and is an authorized Rolex dealer), they also offer a large collection of pre-owned watches. The ability to offer pre-owned and certified Rolex models could provide another source of revenue for this market. (Watches of Switzerland declined to comment on this matter.)
There is some concern among collectors and industry veterans about Rolex’s entry into the pre-owned market. They fear it will drive prices down for those who buy and sell pre-owned Rolexes that are apparently not certified, creating something of a parallel market for watches of both kinds.
However, experts such as Wind and Altieri believe those fears are overstated, at least in the short term, since the largest distributors have been operating in this market for years, setting prices that other retailers use as a guide. Some retailers have their own version of a certified pre-owned watch program, which can increase their value.
“I don’t think there will be a dual market for used Rolex watches, at least not for some time,” Wind said. “The secondary market is very established and I don’t think customers are ready to buy certified pre-owned watches at this point, as it hasn’t been implemented yet. It is possible that in a few years some customers will prefer to buy a watch with that certified pre-owned label for the most modern second-hand models”.
Altieri also said that Rolex’s entry into the second-hand market will not harm the business prospects of unauthorized dealers. “Well, for Rolex to join the pre-owned watch market is an excellent support for those of us who have been doing it for more than 10 years,” he said.
However, Altieri added: “At the moment we don’t have any plans to become authorized dealers, but never say never.”