Rolex Games! The Hunger Games?

[abraxas]

The Rolex Way | F@*#! You, We Don't Care
https://www.youtube.com/watch?v=I51p6HPuxMw

JustBlueFish Watch Reviews. The best way I've heard it said...

Enjoy or not.

[Wyvern971]

Ultimately what he is talking about is still anecdotal.

Even if true Rolex are no way going to admit this.

Overall sounds kind of like the diamond business, restrict supply to drive up "Value".

Ultimately the buyers keep this market going, and people should either accept they wait, pay the grey prices, or just do what the video suggests and spend the money elsewhere.

[snowman]

No one HAS to buy a Rolex...

You choose if you want to play the game.

M

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[jpjsavage]

A pretty selective reading of the situation in my opinion. Plenty of half-truths and quite patronising on occasions too. The Rolex ADs I know locally have done their best to help local customers who they know are going to value their purchases and not flip them.

[Owl1]

He knows nothing, his heads on upside down.

[Barrisimo]

I think there is a fair amount of truth in what hey says. Some ADs may well try their best to look after customers but Rolex are deciding what they can and can’t do. I think he failed to explain the interplay between Tudor and Rolex. To me it appears Rolex are trying to move the brand up-market and occupy the space previously held by Rolex with the Tudor brand. In theory it is a sound plan other than the fact Rolex are ten a penny. They are no way exclusive. Go on holiday to any middle class resort and 50% of the men or women around the pool have a Rolex. Rolex are BMW or Merc they are not a Lambo or Ferrari regardless of what they believe or want they are just too mass market making 750k+ watches a year. I will add I own 3 Rolex and have owned 5 BMWs so I don’t think that is a bad thing. Ultimately I think they will be able to push the price up but I think they will fail to be anything other that the BMW/Merc of the watch world long term.

[M4tt]

A pretty selective reading of the situation in my opinion. Plenty of half-truths and quite patronising on occasions too. The Rolex ADs I know locally have done their best to help local customers who they know are going to value their purchases and not flip them.

That sounds like you are saying that your anecdotal experience is similar to his: 'unavailable' watches are in fact available but in ways that make you feel a bit special when the dealer is able to sell you a watch they tell you is unavailable?

Now, the fact is that The Hans Wilsdorf Foundation (the foundation who wholly control Rolex) are in a unique position: to quote from their foundation document:

The Foundation has the following goals

a) To collect all relevant assets to ensure the protection, maintenance and profitability of the foundation, in accordance with the instructions and the wishes of the donor (Wilsdorf).

For all economic assets that accrue, including all shares, companies and rights as may be donated by the first founder and that accrue to him, the foundation has the primary mission to continuously monitor these assets to maintain their ongoing operations as a functioning whole and to ensure that their operation is in the spirit and traditions of their founder.

b) The primary purpose of all income and resources must be to maintain and develop the resources and properties belonging to the foundation.

In short, unlike any other organisation, Rolex is uniquely focussed on itself, first and foremost. it has no stockholders, is beholden, once Wilsdorf handed over control on August the first 1945, to no one but itself and it is, whatever else it is, is economically conservative in an extremely Swiss manner. It doesn't take risks and, I would imagine, and certainly infer, holds quite remarkable reserves. The fact is that Rolex's charter is clear - Rolex comes before charitable work:

c) When available, allocate money for yearly donations to charities and sponsorship...

The fact is that, in the Canton of Geneve, you can't walk a hundred yards without seeing evidence of Rolex's largesse over the years. Likewise their commitment to training and development is unmatched. In short, Rolex are in the rudest of health, comfortable enough to redistribute some of their their profits, and absolutely focused on staying that way. Even the seventies recessions, oil crisis and quartz crisis did them no harm, and it nearly killed all of its Swiss competitors in the sector it was in. I don't think it is too extreme to claim that Rolex, pretty well single-handedly until Hayak got his teeth into the problem, kept mid high mass market mechanical watchmaking alive and demonstrated it was still viable. In doing so, it left the field wide open for Rolex, or rather their long-time ad agency, J Walter Thompson, to get down to some seriously powerful myth making, some of it even true.

Rolex came of age in a crash, almost certainly got their fingers burned in and around the last crash, courtesy of Madoff and a billion Franc investment in what turned out to be a Ponzi scheme, but their response to it was interesting - they put prices up, as many have noted, the most likely economic model here is Veblen's - they bought back watches, cut back production and raised prices. They've been raising prices ever since, so clearly this is a model that works. As Veblen noted, marginal utility is irrelevant when you are aiming at conspicuous consumption, or as it is increasingly euphemistically called, collecting.

It's not exactly a secret that the last crash was never really resolved and mostly just got paid off by governments that are still in astonishing levels of debt, so few lessons were learned and a further correction, crash or worse is still more than a live option. I suspect Rolex are more acutely aware of this than most and their current strategy of a tightly controlled bubble and, in what feels to me to be a slightly unhealthy manner, they are building stronger relationships with clients. This all looks like a strategy that is planning for the next time the world economy goes belly up.

Wilsdorf was, without doubt, a genius and a genius who studied not just business but people. He's clearly set up an organisation that has transcended its humble origins and is thinking in terms of deep time. I suspect Rolex are as close to a permanent feature as a manufacturing company can be and are planning further ahead than most governments. In this case, what Rolex appear to be trying to do, is learn from previous bubbles and engineer a sustainable bubble that will float through any potential crash.