"All the other brands were just clutter"

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In 2015, The Rolex Watch Company Limited, reported sales of £190 million in the UK and Rhone Products (UK) Limited, the UK subsidiary of Patek Philippe, turned over £125 million. In the same year, Richemont reported UK sales of £73 million; LVMH Watch & Jewellery did £72 million and Swatch Group £70 million.
To summarise: the turnover of Rolex in the UK was almost equal to the combined total of every watch brand of LVMH, Swatch Group and Richemont combined. Patek Philippe and Rolex combined accounted for sales of £315 million in 2015, 50% more than LVMH, Swatch Group and Richemont’s collective turnover of £215, according to Companies House Accounts.
Apologies for this stream of mind-boggling figures, but they matter enormously to the choices made by Prestons, a chain of three luxury watch and jewellery boutiques with outlets in Wilmslow, Cheshire; Guildford, Surrey; and Leeds. This is a company that sells only Rolex (and its stablemate Tudor), and Patek Philippe. All other watch brands are just getting in the way of making more money with these mega brands.
“In the past we have tried most of the Swatch Group brands, the Richemont brands; Audemars Piguet, Richard Mille. I took a decision about three years ago that I would just focus on the two brands that generated 80% of the revenue, which were Rolex and Patek Philippe. All the other brands, without being disrespectful, were just clutter. They were tying up a lot of capital, but not getting the returns so I took the decision to delist them,” says Karl Massey, owner and managing director of Davane Holding Company, the parent organisation that owns the three Prestons boutiques and a handful of other smaller businesses.

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http://www.watchpro.com/retail-focus...ghbred-horses/

(I posted this because I think it will lead to an interesting discussion not because there is a particular angle I'm trying to push).

Quite right, and surely time we did the same with WT. It can be quite tedious sifting through the earnest and well-meaning posts that are really just clutter to get to the proper Rolex and Patek stuff.

Those figures look a bit dubious.

Take the Swatch group, a huge number of brands, Tissot, Hamilton, GO, Blancpain, Brequet, Rado, Longines etc as well as their mass market Swatch, CK etc.

Of course they have Omega as well.

Lets assume Omega represents half their alleged turnover i.e £35 million. Patek turn over about 4 times this allegedly. So what are the average prices of Omega's and Patek? Well lets say 3.5k against about 30K around eight times more..

Well to get those turnovers Patek would have to sell one watch for about every two Omega's sold in the UK. Clearly a load of bollocks.




Mitch

82.7% of statistics are made up on the spot.

60% of the time, it works every time!

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Originally Posted by Evanssprky

82.7% of statistics are made up on the spot.

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The other 43.5% aren't...

So half their sales are Rolex, half Tudor, and half PP.

Sent from my SM-A300FU using TZ-UK mobile app

69% of people have a dirty mind.

Seriously though, here are the stats from Europa Star Time Business magazine.

Global watch sales (brands) in 2016 (in millions of Swiss Francs)
Rolex - 4,700
Apple Watch - 4,000
Fitbit - 2,148
Omega - 1,880
Cartier - 1,450
Garmin - 1,350
Patek - 1,300
Longines - 1,210
Citizen - 1,100
Fossil - 1,050
Seiko - 1,000
Tissot - 940
AP - 850
TAG Heuer - 805
IWC - 765

Companies
Swatch Group - 6,600 Worldwide market share - 18.3%
Rolex - 4,900 wms 13.6%
Richemont - 4,800 wms 13.3%
Patek - 1,300 wms 3.6%

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Originally Posted by SimonK

Global watch sales (brands) in 2016 (in millions of Swiss Francs)
Rolex - 4,700
Apple Watch - 4,000
Fitbit - 2,148
Omega - 1,880
Cartier - 1,450
Garmin - 1,350
Patek - 1,300
Longines - 1,210
Citizen - 1,100
Fossil - 1,050
Seiko - 1,000
Tissot - 940
AP - 850
TAG Heuer - 805
IWC - 765

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Would love to know how that translates into number of watches sold?

Interesting that Cartier is above Patek and that Panerai does not feature.

Sent from my SM-G920F using TZ-UK mobile app

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Originally Posted by Mitch

Those figures look a bit dubious.

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I don't entirely disagree, as accounting is a black art.

However,

https://pelayant.sirv.com/Images/r1.JPG

https://pelayant.sirv.com/Images/r2.JPG

https://pelayant.sirv.com/Images/r3.JPG

Look at the difference in the gross profit margin of Rolex and the other two!

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Originally Posted by Robsmck

Interesting ... that Panerai does not feature.

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It's the top 15 - no JLC either. I suppose they are somewhere between 15 and 20.

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Originally Posted by Alansmithee

http://www.watchpro.com/retail-focus...ghbred-horses/

(I posted this because I think it will lead to an interesting discussion not because there is a particular angle I'm trying to push).

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Assuming this isn't a spoof . . . . .

I used to work with a Chairman who would have described this decision as "courageous"!

There are several factors to be considered here:
-- This is a course of action designed mainly to lower Prestons' cost of doing business (stock to be financed, infrastructure investment, supplier administration, etc.). It is entirely internally focused, and takes no account of the fact that customers (in general) are becoming increasingly choosy. The automotive industry yearns for the days when customers were pleased just to be able to get their hands on a black Model T, or any Trabant. However, this is no longer the case. Just look at the model proliferation in the product ranges of almost every "quality" car manufacturer over the last twenty years. Unfortunately, history has rarely been kind to companies which take decisions to the detriment of the consumer.
-- Again internally focused: the beneficiaries of any savings made will be the shareholders of Prestons (lower costs equate to increased profits), not the customer (presumably there is not going to be much passing on of cost savings to consumers via discounted prices on those brands). Customers will realise that their choice is being limited in the cause of increased profit.
-- Most businesses like to foster customer loyalty by giving a service which people wish to repeat, and making that repeat as easy as possible (the known and trusted option). However, what proportion of Prestons' customers are going to want a watch collection comprising only PP and Rolex? This policy must drive at least some customers into the arms of other ADs (who may turn out to give a service which is just as good). Most odd.
-- And, lastly, Prestons is "betting the farm" on the British public continuing with its peculiar predilection for Rolex products. Fashion is notoriously fickle.

"Courageous" indeed.

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Originally Posted by Yokel

However, what proportion of Prestons' customers are going to want a watch collection comprising only PP and Rolex?

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I bet the overall percentage of customers who have a collection is tiny to start with - I would think the vast majority of customers are one and done (or if not there are years between purchases).

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Originally Posted by Alansmithee

I bet the overall percentage of customers who have a collection is tiny to start with - I would think the vast majority of customers are one and done (or if not there are years between purchases).

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Fair point. In that case, repeat business is going to be less important -- like a circus hamburger stall :neutralskull:

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Originally Posted by steppy

60% of the time, it works every time!

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sex panther 😂😂😂

The £125m figure for Patek looks very high compared to Rolex's £190m. I wonder if some territorial booking is going on here?

Anyway, in the case of the Prestons decision, it seems clever enough if the data behind their analyses are sound. Fickle UK consumers or not, the two brands in question are enjoying a sort of veblen-reversion-to-the-base-option-when-the-base-option-is-actually-the-expensive-option uplift circle. Aided by the memes and tags of social media, Rolex and Patek remain for many the brands of their aspirations, creating a sort of centripetal demand. Besides, I imagine that Swatch Group and everyone else will be only too willing to re-establish supply, should they be asked.

How do they (Rolex) incur such high cost of sales, being essentially local distributor with no manufacturing and not that many owned boutiques I wonder.

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Originally Posted by Sparjar

How do they (Rolex) incur such high cost of sales, being essentially local distributor with no manufacturing and not that many owned boutiques I wonder.

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If they were a distributor, their top line would be limited to the distribution revenues.

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Originally Posted by JGJG

If they were a distributor, their top line would be limited to the distribution revenues.

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They do servicing too, which would be like manufacturing I guess but not on that scale. Also they list distribution costs outside of COS. I'm intrigued. Anyone have their detailed annual report?