Are we witnessing a Rolex Market Crash in 2023?

To be honest I was the same as you. I thought the watch giant that had the largest share of the luxury watch market can’t be stopped with its amazing marketing model of restricting the supply of certain models and placing individuals like myself on a list that had no guarantee of being offered the watch at no certain time.

However, in the past 6 months, we have been noticing a huge wave of prospecting Rolex owners that have been allocated new watches at retail, simply not coming forward to pick them up.

Firstly, we are in a cost-of-living crisis where fuel and food are at record highs which is placing people in uncertain positions to keep cash on hand in case things get worse.

Secondly, watch prices are going up in record percentages. This includes all the big swiss watch brands including Patek Phillipe, AP, and Omega.  We also saw multiple increases in the same year from Rolex. In the year 2022, we saw a 7% increase in January followed by a further 5% increase in September.

Thirdly the ability to flip/sell watches for silly profits is getting harder. Many people enter the game to buy and flip a watch for a quick buck. Now the profits are getting smaller as some smaller secondary market dealers are carrying too much inventory and are finding it hard to move less desirable pieces at a premium price.

Lastly, the availability of some models Is increasing after the opening and restarting of production at the Rolex factories in Switzerland. Accompanying this news is the story from WatchPro of a new Rolex factory opening in the near future. This would suggest that one extra factory joining the current three in operation would boost production by approximately 25%.

Now, arguably most of these watches that are being left in the hands of the authorized dealer are models such as the Date just 31, and 36. This is understandable as these are not the hottest watches to pick up.

If we look at Rolex’s younger brother Tudor who also has a few desirable pieces such as the Black Bay Chrono Panda & Reverse Panda, these once hot models were being sold £1,000 over retail and are now being placed into the window as the first come first purchase.

Typically, the authorized dealer’s way of keeping the flames alive for these desirable models would be to keep them out of sight and offer them to clients who might enquire. With these models being placed into the window, we can hazard a guess and say that they are struggling to shift them to new and prospecting owners.

Moving back to Rolex, and while we are not seeing Daytona’s, GMT’s, or Submariners popping into the front window displays we are noticing that the grey market dealers are offering less and less return on these models. With a 2021 Root beer, GMT in mint / unworn condition being offered at £14,500 (December 2022) Previously in February 2022 these watches were fetching close to £21,000 to a dealer and £25,000 on the open market.

Well, we would deem a ‘correction’ a mere 20% reduction from the highs we saw in early 2022. However, we are currently working on an average drop of around 30-40% across the professional sports range with a slightly lower drop on the classic watches. With this in mind, we would be inclined to label this occurrence as a market crash.

Well, it depends if you are a retail buyer or a resell buyer. For all those buying at retail, you are still quids in and the likely hood of watches dipping below retail on the secondary is unlikely.

If you are a resell buyer who has paid anything above retail, we recommend keeping hold of the watch and enjoying it for what It is worth. Yeah, you might have spent too much but if you were willing to pay £45,000 for a Daytona, you probably wanted it bad!

While it is hard to say, we would say it will probably get worse before it gets better.

With a 12–18-month recession on our hands, we can expect people to be more careful with their money, this would probably mean that collectors be more selective around the models they want and possibly let some models go from their current collection.

We would predict that this would bring the market down to a level we say back in 2018 with demand for certain models such as the Daytona being high but other sports models which were made from steel and gold (Bimetal) or solid gold to be placed in the windows of authorized dealers.