Supply shortage hits Rolex and other luxury brands amid rising demand.
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Rolex is currently facing a supply crisis, leaving shops all over the world with empty display cases including multinational retailers such as Watches of Switzerland?
Currently demand is outstripping supply not just with Rolex watches but other luxury brands too, some of which are Cartier, Audemars Piguet, Tudor and Patek Philippe.
According to the CEO of Watches of Switzerland, Brian Duffy, the company’s 171 UK and US stores can’t keep certain Cartier models as well as Rolex’s sister brand Tudor in stock.
In a statement to Yahoo Finance, Rolex addressed the issue of supply shortage.
“The scarcity of our products is not a strategy on our part. Our current production cannot meet the existing demand in an exhaustive way, at least not without reducing the quality of our watches — something we refuse to do as the quality of our products must never be compromised. This level of excellence requires time, and as we have always done, we will continue to take the necessary time to ensure that all our watches not only comply with our standards of excellence, but also meet the expectations of our customers in terms of quality, reliability and robustness. Rolex does not compromise on what it takes to produce exceptional watches.
“All Rolex watches are developed and produced in-house at our four sites in Switzerland. They are assembled by hand, with extreme care, to meet the brand’s unique and high-quality standards of quality, performance and aesthetics. Understandably, this naturally restricts our production capacities — which we continue to increase as much as possible and always according to our quality criteria.
“Finally, it should be noted that Rolex watches are available exclusively from official retailers, who independently manage the allocation of watches to customers.”
Rolex produces 1 million watches per year; with each piece needing intricate work and specific materials, the company cannot change their production rate every time there is a fluctuation in demand or supply.
While the shortage across the luxury watch market is new, Rolex’s scarcity goes as far back as 2016. Horological pundits (Horology refers to the art of making clocks and watches) believe Rolex’s real scarcity began with the release of the current generation of Rolex Daytona.
According to Joshua Ganjei, CEO of the watch retailer European Watch Company in Boston. “Watch collecting used to be something of a closed community made up of highly passionate people having small private meetups and events … But with the rise of internet blogs, forums dedicated solely to watches, and Instagram, the hobby has really been democratized.”
The availability of online platforms spurred speculative buying, with ‘flippers’ buying luxury watches and selling it for higher through the internet, increasing demand.
Another reason was the pandemic in 2020. Funds usually put away for travel and entertainment flowed to the purchase of luxury goods, exhausting the supply of high-end watches.
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