Secondhand Rolex sales surge in ‘underdeveloped’ US market
As stocks surge to all-time highs, demand in the luxury watch market continues to steady after a boom and bust in 2021-22. Especially in the US.
Watches of Switzerland, the UK-based jeweler with a growing retail presence in the US, last week said its US sales jumped 14% in its fiscal fourth quarter, powering the retailer to better-than-expected results.
Shares of the company rose 10% following this news.
Watches of Switzerland CEO Brian Duffy said US sales were “particularly strong” on a call with analysts, calling the US market “underdeveloped.”
David Hurley, deputy CEO and head of Americas at Watches of Switzerland, told Yahoo Finance in an interview its two retail locations in New York City, a market it didn’t enter until 2019, generated $100 million in revenue in the past year. The company posted $880 million in sales in the US in the same period.
A key driver for the company has been Rolex sales, particularly from its certified pre-owned (CPO) program. The company said total pre-owned and vintage revenue — including Rolex CPO — doubled in its fiscal fourth quarter versus a year ago.
Upbeat results from Watches of Switzerland come alongside continued softness in luxury watch prices, including Rolex. According to data from WatchCharts, which tracks secondary prices for Swiss luxury watches, Rolex prices are down nearly 10% over the last year; overall luxury watch prices are down 12% over the same period.
Luxury watch prices peaked in the spring of 2022.
What’s old is new again
Pre-owned watches are now Watches of Switzerland’s second biggest category.
CPO sales also help retailers alleviate a perpetual problem when it comes to Rolex sales in particular: supply.
Hurley said the Rolex CPO business has been “very successful” and said the company’s entry into the US market last year “100%” helped lift results across the industry.
“It just gives people that extra confidence and without a doubt is going to help to grow the overall secondary market,” Hurley said.
The company told analysts last week growth in the category has been “exponential” and said by the end of next year Rolex CPO sales could approach 20% of the company’s revenue.
Its CEO Duffy told analysts the company remains “happy with the support we’re getting for the projects that we’re doing and what’s happening within the market overall.”
Projects that, in particular, involve continued growth in the US market.
“When you’re looking at the wider watch market, the US is probably the most stable market out there,” Hurley said.
“I think all brands over the last five or six years have recognized the capacity and the ability for the US market to grow, and therefore, the retailers are investing, and all of the brands are investing behind that as well.”
Hurley also noted retailers like Watches of Switzerland who spend heavily on “monoblock” stores — for instance, its new standalone Rolex store in Atlanta — don’t make these investments without having some sense of “the support we’re going to get from our key timepiece partners.”
Suggesting Watches of Switzerland does have some indication of how many units it will receive for sale. Numbers the company will keep close to the vest.
And as Duffy told analysts, the company’s stance is “never be happy with the allocation” it gets from Rolex, adding: “demand continues to significantly exceed supply.”
Pras Subramanian is a reporter for Yahoo Finance. You can follow him on Twitter and on Instagram.
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