I recently wrote a small piece entitled ‘Save Money Buying Luxury Watches As British Pound Plunges‘ but only this month an article in WatchPro reported a steep hike in prices, as Rolex closed the gap by adding 10% on all UK prices across the board. So, you can forget about making money by leveraging the Pound against the Dollar, as Rolex joined many other Luxury brands to close the gap.
No Room For Investment.
So, the Luxury Watch market has decided to increase their prices and Rolex by a whopping 10% in the UK. But who cares about the UK right? I know 95% of my readers are across the ‘pond’ as we Brits like to say, even if we’re no longer located across the Atlantic. Living here, tucked away in the Mediterranean, I still use the phrase like an old dog that can’t learn a new trick. But less about me.
What Does It Mean To You In The USA?
Well, very little really. Apart from the fact you can no longer take advantage of any currency fluctuations and save a little cash, which seems a little unfair.
So What The #@*! Happened?
This was, in reality, a long time coming in terms of market reaction. Rolex informed its retailers late last month of the price rise coming into effect across the board, from November 1st, which is the first increase since 2012. It’s interesting to note, Rolex were the last of the Luxury brands to raise their prices in response to the volatile currency market brought about by the Brexit.
Well, it’s sad to say after the fact, that some people were able to take advantage of the situation and while others who didn’t pounce on the opportunity lost out. This is, of course, the way of all things, and we have all been there at some point or another. Wishing we took the chance when we had it, or just held on a little longer, or just sold a little sooner. No matter, these things come and these things go. The point is, there is always another opportunity if you can keep your eyes open and remain ready to take action.
But Why Close The Gap?
If you can put yourself in the position of the Luxury watch market you can start to see why this happened. I am by no means suggesting we should feel sorry for them but I am saying it makes sense. So let’s look at what was happening. My subheading here is Retail Wars – Chasing The Cash. While Rolex was holding out for the past two months before finally acquiescing to the pressure, major players in the market like China, the US, and Middle East with strong currencies connected to the Dollar where having a relatively difficult time. The converse was true of the UK with its weak Pound, it was luxuriating in the booming sales throughout the summer following the Brexit and taking full advantage of the Pounds low value.
The result was large numbers of visitors to the UK taking advantage or should say, taking ‘stock’ of the bargains available to them and buying up all the bargains they could. It’s true that sometime before Rolex acted, Richemont, LVMH, Breitling together with other independent retailers had already reacted to sure up the gap caused by currency fluctuations.
What Can We Make Of It?
You may be forgiven for being a little cynical when you know that Rolex waiting for two months before raising their prices. There are many questions if you’re looking for them. Why? What was the reason?
Were they taking advantage of the high number of sales due to the situation? Thinking of volume of sales over pricing structure? Where they using the situation to batter their competition? Were they just being helpful and offering value to their customers?
Whatever the reason I can tell you Rolex saw large numbers of sales relative to their competitors through this period so it’s anyone’s’ guess why it turned out this way and perhaps it doesn’t matter.
The Take Away
In my view, it doesn’t matter why they were slow to react. The point is, many people were given more time to take advantage of the situation and find themselves a bargain, and who can fault that? If the competitors of Rolex feel aggrieved they can look to themselves and ask why they need to close the gap so quickly, after all, sales are sales. Although the 10% increase may not fully compensate for the fall in the Pound against other major currencies, the UK should remain competitive while the pound remains low. But of course, nobody knows what’s happening next. Don’t forget there is a VAT rebate of 20% so, although you’re not making a killing you may still find a reason to give London a shot.
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