Pre-owned luxury watches, in particular Rolex watches, have circulated the grey market for years.
Many are happy to purchase authentic luxury watches through the grey market if it means they can get their hands on exclusive products in a fraction of the waiting time. However, there is a danger in this as grey market sellers risk undermining retailers by drawing buyers away from purchasing directly from luxury watchmakers.
Many watchmakers are confronted with the dilemma of whether to directly take action against the problem by certifying and reselling their own second hand products, or to ignore the issue and continue to allow their watch brands to be traded outside of their sphere of influence.
Richemont Group who have luxury watchmaking brands including Cartier, Piaget, IWC, Jaeger Le Coultre and Baume & Mercier amongst their portfolio were one of the first to be seen to acknowledge the grey market issue, when (in the Summer of 2018) they proceeded to buy Watchfinder, one of the biggest online platforms in the grey market. This allowed them to regain control of their brands across all markets, ultimately reducing their presence in the grey market significantly.
Other brands have chosen to invest huge amounts of money in buying back their own stock from grey market sellers, seemingly in an attempt to counteract its booming trade.
More effective measures have seen brands bringing the resale market in-house, offering their own services to ensure customers continue to purchase from them directly, at prices set by them. Such measures aim to knock buyer confidence in the grey market, as they begin to see second hand watches being sold directly by the brand themselves, giving them more confidence in their authenticity.
Seemingly, it now appears that Rolex have also seen the benefits of this course of action.
As one of the top watch manufacturers in the world, and one of the most expensive, Rolex have a huge presence in the grey market. In December of this year, Rolex announced the launch of The Certified Pre-Owned Programme, that will be fully underway in all official Rolex retailers by the Spring of 2023.
The programme vouches for the authenticity of its second-hand watch stock, offering a two-year warranty on all certified watches from the day of sale. All pre-owned watches will come with a dedicated Rolex Certified Pre-Owned plaque, that will attest to its authenticity and correct functioning, as well as a certificate presented in a branded pouch.
In true Rolex style, it would seem that even their second-hand watches will be dipped in luxury. Although pre-owned Rolex watches have been available to buy through the grey market or various retailers for a while, this is the first time Rolex have certified and issued them with a warranty; a factor that could make a lot of difference in the future as buyers look to purchase a second-hand Rolex.
So whilst we are yet to see the effect this will have on pricing both at Rolex retailers and the wider market, could this announcement be a sign that the Rolex bubble is bursting?