Will the Rolex Bubble Burst?

In uncertain times, has the Rolex bubble finally reached its limit?

The reason the Rolex brand is described as a ‘bubble’, is because of its progressive and trailblazing reputation. Rolex is constantly building and developing their products, and as a company are impressively self-sufficient. From design and assembly, right down to sourcing and smelting their own materials, Rolex do it all themselves.


29/07/2022    

With the cost of living on the rise, we once again find ourselves wavering on the borders of a possible recession. To pay the crippling energy and fuel prices, or to buy a flashy new accessory? Of course, this seems a straightforward choice and you would expect to see the likes of Rolex taking an almighty fall as a result. However, it is important to remember that Rolex is a globally renowned brand that has been around for some time, meaning they have seen their fair share of economic crashes and recessions in the past. They survived before and will most likely do so again, but this is not to say there haven’t been some changes.

 

What is the Rolex bubble?

 

The reason the Rolex brand is described as a ‘bubble’, is because of its progressive and trailblazing reputation. Rolex is constantly building and developing their products, and as a company are impressively self-sufficient. From design and assembly, right down to sourcing and smelting their own materials, Rolex do it all themselves.

 

Rolex are famed for their selection of high-end watches, often advertised by celebrities and public figures, and valued at tens of thousands of pounds. The likes of the GMT Master II ‘Pepsi’ and ‘Batman’ fall into this category. However, they are also one of the leading watch brands in the middle market, with Rolex watches being a global favourite when it comes to purchasing sentimental and celebration gifts.

Rolex PepsiAn 1972 Rolex GMT Master 'Pepsi'. Sold at Dawsons for £16,000.

 

So, whilst the Rolex brand is often seen as one great, overarching bubble, it may be better imagined as a brand that occupies several bubbles within the watch market purely because of their interactions with different markets and their clientele.

 

LOOKS LIKE Trouble in the high-end market

 

There is no denying Rolex have hit a few sleepers in their high-end sales in the UK market over the last few months with the impact of various global crises. In fact, the market has seen a dip of around twenty percent in the last four months. Reasons vary between reductions in transit from overseas, new VAT laws implemented in the UK for international buyers, and simply the fact that Rolex watches can be bought for less in other countries.

 

The high-end Rolex market in the UK is heavily reliant on international buyers who come from overseas to buy. Those buyers going elsewhere, either for VAT purposes or for lower prices, is undoubtedly deflating the high-end Rolex bubble slowly. It is nearly impossible for any company to completely dodge the fallout of a global crisis, and companies like Rolex must prepare for the possibility that demand for expensive jewellery and watches may be low for the foreseeable future.

 

Saved by the middle market

 

Luckily for Rolex though, they are armed with the money and confidence to allow for such dips. So, whilst the factors mentioned above have certainly stuck a pin in the high-end bubble, the middle and low market has by no means burst yet. As a brand that have the popularity and ability to franchise in any given country around the world, it is safe to say the funds and resources are in place for them to adapt their approach. This gives them a very powerful position on the board.

 

Rolex Oyster Perpetual Date Explorer

A 1982 Rolex Oyster Perpetual Date Explorer II. Sold at Dawsons for £25,000.

 

Their autonomy is so much, that they have been able to confidently manipulate the market through limiting their supply to increase demand. Such a move can only be made with bottomless funds and expert knowledge of the market, and this is not the only bold adjustment made to Rolex’s global-crisis sales approach. They have also cut their waiting list back by more than half, from five years to just two. The effect of this: those who can still afford to buy, most likely those buying in the middle market, will flock.

 

How is Rolex looking at Dawsons?

 

Ultimately, whilst the high-end bubble may have burst, the middle market, or gift market, seems highly unlikely to die. There is always a demand for Rolex gifts and we deal with a lot of these sorts of watches here. Enquiries about gold, dress watches are received often, both from a buying and selling perspective. With July 2022 seeing the sale of multiple Rolex watches, most memorably an unworn Rolex Day-Date 18038 in 18ct yellow gold for £11,000. As you can see, there is no sign of change here just yet.

 Yellow gold Rolex Daydate

An unworn Rolex Daydate in 18ct yellow gold. Sold at Dawsons for £11,000.

 

If you have decided it is time part with your Rolex, the specialist team at Dawsons would be pleased to assist you through the buying and selling journey. Even if you are still deciding, we can provide a thorough and professional appraisal with no obligation at all to sell.

 

You can choose to visit us in person or receive a valuation from the comfort of your own home via our online valuation service. Simply submit several photographs and some information relating to the provenance of your using our online form and get started with a free auction estimate.

 

Our valuations are complimentary, costing you nothing at all!

We're always keen to discover 'new to market' Rolex watches... there is a buoyant global audience of collectors who are eager to bid for the most desirable watches. Any submission you make will be analysed carefully and if we feel we can sell your watch, we will gladly offer you an auction estimate. Click here to see some of the many Rolex watches to have been sold by the team at Dawsons.

 

The expert team of Valuers at Dawsons are happy to help you get your Rolex valued and ready for auction.

Please do get in touch, we would love to hear from you:

0207 431 9445  /  info@dawsonsauctions.co.uk.