Why could it never happen here? The statement at the end seems applicable on a global scale.
The prices of second-hand luxury goods have fallen rapidly in China over recent months, as even the wealthy cut back on their discretionary spending and sell their Rolex watches and Hermès bags to raise cash.
More than a dozen popular brands of luxury watches and bags have lost between 20 per cent and 50 per cent of their value on the secondary market since Shanghai, China’s financial and commercial capital, imposed a strict lockdown in March to crush a Covid outbreak. The restrictions in Shanghai and dozens of other regions have dealt a heavy blow to small business owners, many of whom accumulated large collections of luxury goods in better times. But the repeated lockdowns have damaged their cash flows.
Last week tens of thousands of tourists in Hainan, an island province billed as “China’s Hawaii”, were prevented from returning home to stem an outbreak there. The government is promoting Hainan as a duty-free paradise where Chinese consumers can buy the same luxury goods they used to snap up in cities such as Paris, Rome and London before President Xi Jinping’s controversial zero-Covid policy made it practically impossible to travel abroad for short trips. Watcheco, an industry portal for used luxury watches, reported that the price of second-hand Rolex Submariners — a model coveted by connoisseurs and collectors — had fallen 46 per cent since March.
Luxury bag dealerships in Shanghai and Hangzhou have also cut prices of classics such as Hermès Birkin bags by up to a fifth over the same period. Pawnshops and other luxury goods resellers said there had been a big increase in customers, led by cash-strapped business owners who were struggling to raise capital to pay down debt and keep their operations afloat. “The boom time is over,” said James Wang, a seller of second-hand luxury watches in the eastern city of Nanjing. “We are entering a correction period that could last for a long time.”
Wang said he bought six Patek Philippe and 29 Rolex Submariner watches from distressed owners in July alone, compared with no Patek Philippes and five Rolex Submariners in the first quarter of this year. “Patek Philippe says you never actually own its watch, but merely look after it for the next generation,” said Wang. “That’s not the case in a business crisis.”
Chinese investors ditch property for jade in search of higher returns Shaun Rein at China Market Research, a Shanghai-based consultancy, said the sudden rise in supply and resulting price drops of second-hand luxury goods were evidence of “very weak consumer confidence”. “It’s probably the weakest I’ve seen in my 25 years in China,” he added. Some luxury goods investors argued that the recent price falls were inevitable after an unsustainable surge prior to March.
In the six months leading up to Shanghai’s lockdown, the price of second-hand Rolex Submariners rose by 240 per cent. The same bag dealerships that recently cut their asking prices in Shanghai and Hangzhou did so just months after raising prices at the start of the new year. Sam Xue, a watch investor who owns an electric heater factory in the eastern city of Wuxi, said the price rises were “pure speculation” and unsustainable.
“The weak economy can’t support a luxury boom,” Xue said, adding that he would not buy luxury watches again unless prices fell by another 30 per cent.
https://www.ft.com/content/3b6559e1-...d-0263da809191
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So in context it looks like prices still overall up but on a downward trend.
Thankfully it could never happen here!
Why could it never happen here? The statement at the end seems applicable on a global scale.
Considering it was this market that pushed prices up significantly ten years ago, I wonder if this strikes quite a blow to the watch industry for new sales.
I always liked the Patek Philippe marketing: You never actually own a PP...
Interesting article.
Especially this bit:
Thanks for sharing.“Patek Philippe says you never actually own its watch, but merely look after it for the next generation,” said Wang. “That’s not the case in a business crisis.”
From what I can gather speaking to AD's and witnessing recent footfall they are still inundated with lists to fulfil and fresh daily enquiries they are batting off so whilst there is definitely a slump in secondary values demand at RRP is still healthy
but no doubt those that have bought from 'greys' at top hype money will have overpaid and if they try to liquidate may have an unpleasant surprise.
Definitely. Those bought at list are always going to be safe, but paying top dollar for a must have clearly carries a risk. I’m guessing most that do this don’t care anyway, they want the watch today and the cost is probably loose change in the back pocket to them.
I did see an SD43 listed on a dealers site for under £12k this week and that did surprise me, are secondly prices starting to cool. I must admit I don’t follow them as much as I used to.
Wonder if availability of new sought-afters may start to rise in markets less-affected by those concerning CN?
Gotta dump 'em somewhere...
There is a big difference between a wealthy person cutting back on buying new goods and someone having to make a distressed purchase because they have hit hard times.
Those who have to sell should never have bought it in the first place when they have to sell at the first hiccup. These are the purchases that will flood the market and drive prices down. It all depends on how many of these people there are compared to those whose just cut back on the buying but don't have to sell.
It just shows that companies such as Rolex and PP etc need to be fussy who they sell to in order to protect their brand image.
In all these years of following watches I’m still yet to see anyone pop up and say ‘I paid £49,000 for a steel daytona’. I’ve seen people say they’ve paid 50% over RRP, maybe even 60/70%, but where are all the people that were supposedly paying 3x or 4x retail?
I’m sure there are trust fund people and city slickers with huge bonuses etc that have paid silly money, but I’d imagine they are very few and far between. Watch prices look like they’ve just gone back to 2021 prices, before that crazy boom at the end of last year and beginning of this year. Anyone that paid RRP iI’d imagine are very happy still - that’s if they even care about watch prices, which I know a lot of people don’t.
If you've no experience, then why add completely ill informed information to a thread?
There's many who bought an expensive watch may currently be uncomfortable having such an amount tied up, so could prudently decide to sell and release the equity for other things. hardly unlikely to flood the market.
You could do with educating yourself on economics.
You have demonstrated that there is no point in saying something unless you have experienced it first hand, this being despite the fact that dozens upon dozens of people have publicly stated that they will never buy a watch from Rolex again because they are treated like a second class citizen.
By the same token I have never seen people killed in a war because I have never seen it so am I wrong to comment on it. I could list many similar instances, so unless you think that the people who wrote in claiming Rolex treated them like dirt are liars or Walter Mitty's then you little outburst is totally unwrarranted.
Also I restricted my comments just about distress sales and caveated how many were down to this as it would affect the outcome. I respectfully suggest you learn to read before blasting.
You really have no idea what you are typing.
I haven't displayed any 'outburst', simply reacted to your troll like comments.
Yes, I do agree many have commented in reference to the Rolex acquisition procedure, but your post was about selling, not buying, so try not to drift...
What's a 'hiccup'?
How many constitutes a flood?
What percentage will prices be driven down?
How do they carry out 'fussy'?
Rolex PP AP et al may not request sight of balances, but they are studying purchase history fairly intently which in itself gives insight to customer spending power.
The market could be flooded with people wanting to sell at the moment with an easy 20+ sellers to 1 buyer.
What is preventing this currently is that those who want to sell have expectations of clawing back most of their last years purchase price, and that isnt happening.
This is what is holding back the floodgates, not the amount of people wanting to sell.
People who bought at RRP or not hugely inflated numbers above RRP are still okay. Those who splashed 50k on a turquoise OP etc.. less so.
Now, that really is an informed and useful post, so thank you.
Grey pricing has fallen and it is fair to expect most people to hope to get their money back, which is currently showing as unlikely. But I also don't see the floodgates opening because a gas bill has just landed, as lauded about by Daft Mick.
No, although this may be happening on the private market (forums, Ebay, etc) if people are worried so shedding watches to provide financial cushions in case of hard times ahead.
Baller buyers though who have been consuming regularly at the high end are not getting sweaty palms, yet.
The market is still moving though with buyers and sellers.
In all honesty, I cant so wont predict it.
But, from observation, summertime is always a slump and June-Aug are very quiet compared to the rest of the year because of holidays and associated spending, kids off school etc.
This happens annually so its not easy to assess whether this is an all round slow or seasonal which will pick up heading into autumn/winter.
What I'm seeing at the minute is a steady flow at lowered prices. There is still regular buying and selling going on so the downward price trajectory hasnt ground the market to a halt, for some, its a better time to buy than at the beginning of the year when people were priced out of what they wanted.
I suspect that there will be a further drop, but probably slower rather than off a cliff and will stabilise over RRP by several K.
I think the idea that wanted watches will be available pre owned at below RRP is forum fantasy-land at the minute.
Some watches have been hit harder than others. RM- steady, Rolex - steady, PP sports - steady ish although PM has taken a hit, AP very quiet but they had a massive bloat.
Why are so many taking my posts the wrong way? I am fully aware they interview. My response related to those who would be forced to sell because they couldn't afford it in the first place - thus intimating the AD would rummage through your personal finances in order to be considered.
They Do Not.
I suspect that Mick, in his rather clumsy way was highlighting that there are people on here and elsewhere who possibly stretch themselves a little further than they should when buying watches and when some big unexpected bill comes along like a major car repair or a new boiler etc, they immediately have to offload the watch to pay for it.
This has been going on for years and has nothing to do with price fluctuations or trends etc, just the way it is and ADs offering finance exacerbates the problem in some cases.
Whilst I laughed at that meme, I don't think Mick is a million miles from the truth. I think Rolex ADs take a slightly cut down version of the strategy from brands like Ferrari to keep things exclusive and limit those who purchase.
https://www.motorbiscuit.com/no-matt...a-new-ferrari/
That’s very true and even more truer today than ever - the amount of money that people were getting in lockdown with furlough, bounce back loans et al, was incredible. Lots of it spent on land, extensions, cars and …. Watches!
All very good until you have to pay it back!
Happy for prices to get battered back to RRP or even 20% less if it helps my allocation.
I've bought and sold a couple in the last few weeks but it's all relative. I didn't buy a Daytona for 50k or a Pepsi for 20 so I'm not prolapsed and yelping.
God help anyone who paid £20k or more for a "Hulk".
Had an offer from a member on here to buy their 41mm RO for £40k the other week. Not a chance and no, wasn't blue and wasn't even a chrono.
Up to them as to how they financed it (if it was even their money) and if they need the money or not looking forward.
I think anyone paying those kinds of sums is doing a financial Darwin but that's their business.
I think the reality is 99% of watches lose money and anyone who thought or thinks otherwise is about to buy a PhD in horological finance and the depths of depreciation.
What reality do I live in?
Whilst I realise you spend your entire life on this forum sh1t stirring at any opportunity you can and showing what a thoroughly unpleasant person you are, surely even you’re aware of some of the vast sums of money that people were getting?
As you like to twist things, to be clear, I never said everyone was getting a lot of money in lockdown, but a lot of people were. The huge amounts of £50,000 bounce back loans for starters that were handed out with the most minimal of checks. I could expand but I really don’t wish to spend anymore time in dialogue with you full stop.
Like who?
I'm pretty sure that whoever they are that you're referring to didn't represent any majority.
I think the general populace tried to make the best of it, that's the British spirit.
I don't think I'll ever forget Captain Tom, the 99-year-old army veteran who pledged to walk 100 lengths of his garden to raise over £10M for the NHS.
Do you really need examples? Loads of people benefited from it. So much so that many decided to reevaluate their lifestyles. Lots of self employed people loved it until the end of furlough especially those who’s companies employed family members. Let’s not fool ourselves and pretend that everybody suffered with the stiff upper lip crap. Online retail went through the roof as many were spending free money .
Sent from my iPad using Tapatalk
Last edited by Stilgoe1972; 13th August 2022 at 17:06.
Peoples businesses were kept afloat with furlough money-it did what it was supposed to do. There was excess money in the system due to no family holidays and no going out socialising.
The bounce back loan was certainly abused by a good number however I’m not sure much of it would be spent on a Rolex off a grey dealer-I feel that’s a bit of an urban myth.
I actually took the BBL as it made sense for a years interest free money. It shall all be paid back though and no Rolex was purchased off the back of it.
Promise
Bit touchy aren't you? I rest my case.
I had no idea that people were getting "vast sums of money". I knew people with businesses that had to close and welcomed the money to keep their family fed and a roof over their heads?
But you're saying lots of the recipients bought house extensions and Rolex with the money? Maybe a small minority of the feckless did. Otherwise, what you describe sounds very much like a Daily Fail or Torygraph headline.
And for many, there was some new disposable income with working from home and no commuting and not going out, but it wasn't the rosy picture you paint of people lining their pockets and living the high life.
You said, " – the amount of money that people were getting in lockdown with furlough, bounce back loans et al, was incredible." That sounds like you saying all people were getting incredible sums of money. But whatever. We'll never see eye to eye so have a nice weekend.
I stated the majority, not everyone.
GDP declined by 9.7% in 2020, the steepest drop since consistent records began in 1948 and UK GDP was 25% lower in April 2020 than it was only two months earlier in February.
What you've presented are generalisations or, probably more accurately, exaggerations.
I doubt Putin has had to sell his Blancpain yet