The current Rolex situation

Only a few days ago, someone posted this on the Rolex subreddit. The newly presented Rolex Daytona, now in yellow gold with the so-called Tiffany dial, the turquoise one, has hit the grey market with an incredible 450% price increase compared to its actual retail price. According to the latest Morgan Stanley report in collaboration with WatchCharts.com, secondary market prices fell representing the lowest quarterly rate of decline since the second quarter of 2022. And yeah, while this represents the lowest quarterly rate of decline in the second quarter of 2022, performance is now heavily based towards the big three. AP, Patek and Rolex, of course, which were among the strongest brands in the quarter, while pretty much everyone else underperformed. So what's really going on here? Is that the quiet before the storm and before kind of hits the fan? Or have we successfully dodged this bullet and things are finally looking up again on the watch market? In today's video, we are taking a very close look at the current Rolex situation. We are going to look at the exact numbers behind Rolex's outperformance this quarter. We will create a heat map of which models are hot and which are hurting. And something extremely important, many seem to gloss over the inside story on Rolex's certified pre-owned push and how it affects the margins. So let's get started. All right, let's zoom out and see where Rolex sits in the wider watch landscape. I have this WatchCharts report in collaboration with Morgan Stanley. I absolutely recommend getting an account there and then you can get this for free. So yeah, let's look at the heat map for the first quarter of 2025. Out of the 35 track brands, only two printed green though are squeaked out again. But Rolex are told to up 0.4% quarter on quarter while the average luxury name slipped almost 3%. For example, Omega, though they managed to stay within the top 10, makes it to the seventh place with a negative 0.1%. And a bit to my surprise, Swatch being second to the last with a negative 8.9% because I thought, to be honest, that the Moon Swatches, for example, had performed rather well on the secondary market. But it looks like I was absolutely wrong here. So overall, Rolex SA, you know, the group that owns both Rolex and Tudor, edged up 0.3% this quarter. And yeah, though they, you know, technically belong together, we will still look at them separately as this report does. So Tudor's number won't be, you know, modeling the results in the end because we solely want to focus on Rolex now. So yeah, the Rolex brand itself rose 0.4% thanks to steady demand. Secondhand prices for the Datejust climbed 0.8% and the Day-Date with 1%. While the Yacht-Master, Oyster Perpetual, and GMT-Master all inched up by less than a full percent. Some of that lift likely reflects seasonal buying ahead of, you know, the Spring Watches and Wonders show with all the rumors picking up the weeks prior to the biggest watch for individual collectors and, you know, just regular people and gray market dealers try to kind of bet on discontinuations like, you know, when the 39 millimeter Tiffany Oyster Perpetual got kicked out of the collection and many more such things. But yeah, this side of Rolex is still almost alone in the Swiss industry for posting gains across both its dressy, classic, and sporty professional ranges to the slip to 2%. But after a tough 2024, that result now places it in the middle of the field rather than at the bottom. And remember, that's price action in a soft market. A soft market is one in which buyers hold the upper hand, so you and me, because demand has thinned out or, you know, supply has grown, putting downward pressure on prices and giving purchasers like you and me more negotiation power. So in practical terms, it shows up as more inventory sitting unsold, you know, listings stay online longer, our showroom cases aren't turning over quickly, sellers trimming prices or offering extras to entice a sale, and you've got lower transaction volumes, fewer deals that actually close because shoppers feel no real urgency to it. And so in the watch world, a soft market means dealers and private sellers are willing to accept similar premiums or even discounts because plenty of stock is competing for a limited pool of buyers. The opposite is a, you know, would be a strong or some call it a tight market, sometimes even called a hard market, where demand outstrips supply, pieces move quickly, and sellers can hold firmer even, you know, really race prices, which we saw happening around 2022 with shocking price differences for the John Mayer Daytona, that one sell for a couple of hundreds of thousands, and it was, it was insane. We haven't seen that before, it was crazy. Equities wobbled, gold stalled, but the crown kind of still climbed here. So stretch the lines to a full year, and the story is even clearer. The Rolex secondary price index has outperformed the composite of Swatch, Le Chemin, and LVMH watch divisions by roughly three and a half percentage points. Right now the average Rolex trades 15% above retail, and that's the industry kind of high watermark by now. I mean, just ask any dealer, Rolex is liquidity, and not only for them, of course, the same goes for ADs as well too. I mean, Rolex is their bread and butter basically. So what's the bottom line here? Well, at a time when most Swiss watch brands are named on kind of nursing their markdowns, and that really sets the stage. But why does Rolex hold value better than anyone else? Let's break down the math with the latest numbers. The term value retention had had some kind of a difficult standing within the watch community for quite some time. For some, it has absolute priority and is the key factor when it comes to their decision making when buying a new watch. Others find nothing more deplorable than mixing a purchase decision with term value retention. Either way, value retention is first and foremost a way of categorizing watches. All watches have value retention. It's either good or bad. So how does value retention work? It's quite simple. Right, before we dive deeper into this, I want to quickly share something with you. I'm so happy to finally announce that our watch rolls are going to be back in stock very, very soon. We're at least close to hitting the start button on our production. But before doing so, I need your help. Yes, you right there sitting in front of your screen. We want our watch roll to be truly the best of the best. So I want to ask for your help and your input on this. Please click on the link in the pinned comment down below and share with me what's most important to you when it comes to watch rolls. Let me know what you want to see and what features are most important to you. It will only take 30 seconds, I promise, and it will truly help us make the best product on the market. So yeah, be on the lookout for the launch date. I will keep you updated here on YouTube and on Instagram. Make sure to follow me there. It is Jenny L spelled with an I, just like on YouTube here. And yeah, thank you so much. We're going to be going right back to the video. I will put up a little formula up here. So yeah, take the price of watch patches on the secondary market, divide by its official retail, subtract one. So for example, if a Submariner lists at 9,600 and sells pre-owned for 11,500, that's a plus 20% premium. So let's have a look at the leaderboard here. Rolex just edged past Patek at 15.0%. Audemars Piguet still sits at around 12 and Omega barely breaks even. Now the report shows two figures here. Headline value retention dipped two tenths of a point, but the like for like number rose the same amount. So when analysts report a change on a like for like basis, they freeze the comparison to the exact same items that existed in both periods. No new releases, no discontinued references, no makeshifts. That way the figure shows the pure movement. So price, sales margin, et cetera, for an unchanged shopping basket, you could say, rather than being distorted by what was added or, you know, removed from the Rolex catalog. Confusing? I get it. Let's unpack it together. Remember in January, Rolex discontinued 15 Oyster Perpetual references, including the Celebration Dial reference. Those, you know, cartoon colorful dials everyone flip for crazy premiums. Removing them from the sample really drags the overall average down. But if you track only the 128 references present in both periods, so without them, that's the like for like part that we were talking about, they actually gained 0.2 percentage points. And that's the pure price move. So the catalog change masks underlying strength. The same watches, higher prices, basically. That's what the plus 0.2 points like for like really means. And that sets up our next question, which lines are pulling the freight? So let's take a look at the true stars of the Rolex catalog right now. Right. So we have learned how Rolex has performed overall in secondary market context and what that kind of value retention means, not only, you know, in a broader context, but also specifically for Rolex as a watchmaker. Well, you know, this is super helpful in itself to understand the market and, you know, the pricing. It is even better to understand how specific lines perform to see what is actually, you know, driving those premiums and which Rolex watches are underperforming unexpectedly. So let's take a look. This chart that we're looking at right now is looking only at watches currently in production, which they list as 131, not including latest releases like the Landweller, for example, because that haven't really hit the market yet. First, the GMT-Master is king at plus 39.6 percent above retail. Badmans and Sprites just won't cool off, it seems. And I'm not sure where I have a little bit of a side fact, but I have seen someone cool than the airport hits. I don't know, just made me laugh. I don't know why. Apparently, those are slightly easier to get at those in airport locations, but I can't confirm that. Anyways, second comes the Daytona, still commanding a 38 and change premium. Ceramic or steel, it doesn't matter. And I honestly thought that the Daytona would have outperformed the GMT, but, you know, seems I was wrong here too. Third, the playful Oyster Perpetual, my all-time favorite Rolex line, sits roughly plus 30.6 percent. And I think it's pretty cool to see that, you know, some call it entry-level. I do it too. Rolex, outshine your more classic options like the Datejust, for example, with a bit less than 11.7 percent or the subs at 14.1 percent. By contrast, the gold-heavy Day-Date is slightly underwater at minus 2.3. Yeah, I think that was to be expected. And the Deepsea Sea-Dweller is our laggard down almost 15 percent. But yeah, the Sea-Dweller has always been kind of pretty niche, I would say, because of its sheer size. I mean, not everyone can pull this off. So that's not really surprising either, I would say. There are really a couple of takeaways here, but one thing really stands out. Notice the split. So we have the sport models that feed the hype and the precious metal pieces feel more macro headwind, so to speak. Keep that in mind when you would like to hunt for value. I'm not saying that you should or shouldn't do this. It is a trend and you can do with that information whatever you want. Just putting it out there. It is an interesting fact to see. In December of 2022, a new sort of player, let's call it that, has entered the pre-owned Rolex game and has since had an impact on the secondary market prices and therefore your watches of value retention. Rolex launched its Certified Pre-Owned Program, you know, CPO for short, the first large-scale program by a luxury watch brand. Rolex's Certified Pre-Owned Program lets only authorized retailers led by a Rolex-owned and partners such as Watches of Switzerland resell used Rolex watches that are at least three years old, so no super, super new watches. Each watch goes through an official inspection, is resealed in Rolex packaging, and comes with a new two-year international warranty plus a dated green swing tag that proves it is factory certified. Because buyers get authentication and fresh warranty directly, you know, backed by Rolex, these CPO prices typically command a premium of roughly 30 percent over identical non-certified watches on the open market. This whole entire program launched in late 2022 and, you know, now rolled out to more than 200 retail doors worldwide, which gives Rolex tighter control of its secondary market image and pricing while offering collectors a safer but costlier path into pre-owned models. So you'd think that this would be the end for flippers, so-called grey market dealers, but no, actually. Though it is definitely enticing for some to have some actual, you know, direct authentication from Rolex. The best price is still winning in most cases, which is definitely not through Rolex's CPO. The report from Sandy Morgan based on the data provided by WatchCharts even mentioned something that instantly got me, you know, sitting up a bit straighter and looking closer at my screen, because this actually doesn't sound great at all for the whole CPO program. According to this report, though they estimated an increase in partners, they actually recorded a decline of CPO partners with partners leaving the program and no new ones joining it. What's also really interesting to see is that though lines such as the GMT and Isofetuals are overall the strongest in terms of value retention, the stock held by Rolex CPO partners is mainly centered around Datejust and Daytonas. I'm not really sure what to make of that, you know, allocation or distribution, even if it matters or not, or if there is a correlation, but it was just something that stood out to me. So perhaps you can let me know in the comments if you have a theory as to why CPO partners have such a heavy stock focus on Datejust. And yes, I am aware that the best value retention doesn't necessarily indicate the most worn, most popular watches, but it is an interesting connection perhaps, and I'm not quite sure what the context here could be. So yeah, we'll have to take a closer look at that. But now it is time to look at the plumbing of the market, so to speak, how many Rolexes are actually for sale, and how fast do they move right now. First, the overall supply of listings has fallen for two quarters in a row, slipping another 0.2% quarter-on-quarter that leaves a total online inventory at its lowest level since January in 2024. Now, falling listings only matter if buyers still show up, so watch the next slide here. The absorption rate, that's the share of all the listed watches that change hands within 30 days. It just rose 1.8 percentage points versus the same quarter last year, signaling that pieces are selling faster even as supply shrinks. Think of it as shelves emptying quicker than sellers can restock them. And one caution flag pops up when we layer on inventory age. The median Rolex now sits online longer than it did during the 2021-22 boom. Dealers are still reluctant to slash prices, so watches are aging in the window even while headline supply falls. If macro-settlement turns south, that built-up age can flip from benign to painful in a hurry because stale stock usually means margin-cutting markdowns. So, what's the bottom line here? Fewer fresh Rolexes are entering the secondary market and the ones that do arrive are clearing slightly faster, but the growing age of what's left reminds us the market isn't steaming hot, just tighter. That balance between thinning supply and aging inventory is the tension to watch in the next quarter. So now we know that the shelves are thinning, yet the watches that remain are lingering longer. That push and pull tells us the market is neither roaring nor collapsing, just tightening in a very Rolex-specific way. The obvious next question is, what does that delicate balance actually mean for collectors, dealers, you and me, and the brand itself going into the rest of 2025? Well, to answer that, let's step back and lay out all the facts that we have so far. We've seen the numbers, the model-by-model heat map, the supply pipeline, so let's spell out what all of that really means for the rest of 2025. First, the market is continuing its flight to quality, you could say that. You know, when broader demand softens, collectors park money in assets they trust most. Rolex sits at the top of that list pretty much, and the 15% average premium we quoted earlier is the proof on paper, really. Even marginal references that would normally drift toward retail are staying afloat, because buyers would rather, you know, overpay for the crown than gamble on weaker brands. Secondly, the certified pre-owned program, the CPO, has become a protective moat of some sort. You know, by funneling pre-owned pieces through 214 hand-picked partners, and by, you know, charging roughly like a 30% premium for that green seal, Rolex has inserted itself between grey market sellers and the customer. That move does more than, you know, just raise margins. It also anchors secondary prices at a level that supports rather than undercuts, you know, brand equity on the primary side. And third, subtle catalog tweaks keep excitement high without, you know, just flooding the supply for no reason, as you can see. In January, Rolex rightly pulled the celebration dial, oyster perpetuals, and all these models that have been trading for huge premiums. And in March, it introduced the new land dweller. We've all been there. In a strictly limited allocations and discontinuations, remove the hype stock from circulation and new novelties redirect demand. And the overall effect is to tighten the scarcity while, you know, generating fresh buzz every spring of the year. And then you put those three levers together and you get today's picture. You've got prices that edge higher even in soft market, a secondary channel that now works for Rolex, you know, not against it, and a product today that feeds demand without loosening the spigot. For, you know, collectors, that means stable if, you know, still expensive entry points. For flippers, that's slimmer arbitrage unless they catch lightning in a bottle. And for Rolex, perhaps the strongest hand any Swiss brand has held since the 2021 peak. And that pretty much wraps up our update on the current Rolex situation. I love speculating about these kinds of stuff and talking about it. So yeah, also a big shout out again to watchjars.com. You can just sign up for free there and they release these annual and quarterly reports. They're great. Love that in collaboration with Morgan Stanley, as I said. And yeah, please make sure to fill out that quick survey in the pinned comment down below about the watch rolls and how we can improve them. Thank you so much. If you have enjoyed this video, make sure to give it a thumbs up and subscribe to my channel to not miss out on anything new that I post. And then I will see you in my next video. Bye