Rolex watch (pexels photo)
The corona crisis has caused quite a few economic crises, both at the political level and at the private level. In the upper decile sector, not many crises were recorded during this period, but another type of crisis reached them – a severe shortage of luxury watches. Rolex, the world-renowned luxury watch company, recently admitted that current production is unable to meet demand.
The announcement deepened the crisis which led to a boom in watch sales as part of auctions, and prices on collectibles sites soared worldwide. For example, in July, sales of Swiss-made watches grew by 48% in the United States compared to July last year and by 75% in China.
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The four major brands of luxury watches that are responsible for most sales are all privately owned, and they refuse to increase the pace of production at the expense of watch quality, despite high demand. According to a report published by analysts at Morgan Stanley to maintain their quality and exclusivity, Rolex sold just 810,000 watches last year.
The demand for luxury watches is expected to continue to increase, at least in the near future. As a result, prices in the second-hand watch market are experiencing an increase. For example, a Patek Phillip watch that sold for $ 35,000 sold at auction in July for $ 490,000. At the same time, the first-hand models are snatched up very quickly. “New models that do come to our site are sometimes sold out within 15 minutes,” Paul Altieri, CEO of watchmaker Bob’s watches, explained to Yahoo Finance.
Brolex, after a long silence, published a comment about 3 months ago, published on the Business Insider website, emphasizing: “We have no goal of reducing our inventory. Our current production quantity does not meet current demand, without lowering the quality of our watches, which is something That we refuse to do, because we will never compromise on the quality of our products. ” The company further explained that all the products are assembled manually in one of four facilities in Switzerland, a procedure that by definition “naturally limits the production capabilities”.
According to experts, behind the watch trend is a new generation of young collectors who buy and sell watches online. Social media also has a role to play, as more and more collectors enjoy displaying their Swiss status symbols on Instagram and Tiktok.
If you were wondering how the shortage in the market is affecting the image of Rolex among consumers, it turns out that it has only intensified. In the UK’s Superbrands’ annual ranking, Rolex took first place, followed by Lego, Visa, Dyson, Andrex, Apple, Mercedes, British Airways, Coca-Cola and Samsung.
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