Economy News Shares

Rolex faces a severe shortage and market instability


Due to the new Covid-19 pandemic, the shortage of Swiss luxury Rolex watches is worsening. This is due to the severe disruption of international supply chains.

A watch can be bought for a great deal of profit, creating new demand that was not there before.

According to experts, Rolex is facing a “perfect storm” situation and needs to correct the market instability, for example, by introducing a “waiting list” system.

Over the past five years, demand for luxury watches has increased, but production is the same. Demand for luxury watches in Switzerland declined during last year’s pandemic, but has increased rapidly in recent years.

According to FHS, a Swiss watch industry research firm, Swiss watch sales were up 7.6% in July compared to 2019.

In high-income regions, however, sales growth is much higher, with July sales in the United States up 48.5 percent over 2019 and even 75 percent in China.

Yahoo Finance reports that the situation is more complicated for unlisted Rolex, whereas Swiss watch sales are booming.

Paul Altieri, CEO of online watch retailer Bobs Watches, said the shortage is a result of a process that has been ongoing for years.

Though the supply disruption was made worse by the plant’s closure due to COVID-19, Paul Altieri noted that “the (Rolex) supply disruption problem has remained since then.”

The global demand for goods has steadily increased over the past five years, but supply has not. The typical supply and demand situation continues, he explained.

Unlike what some have suggested, he said Rolex does not intentionally restrict supplies to maintain its luxury image. “The shortage of luxury watches and high prices are the result of excessive demand,” he said.

A journalist specializing in luxury watches, Eric Wind, told Yahoo Finance that demand for Rolex products is rising as well as supply constraints.

“Thanks to online sales, popular watches like the Rolex Daytona and Submariner are selling easily.”

As more and more consumers are looking to make a profit, the price of Rolex watches is skyrocketing online.

Supply and demand have been affected by the shock of the pandemic.

As consumers who were unable to travel spent their extra cash on luxury watches, the demand sharply increased, while supply dropped by 70% due to disruption of international supply chains caused by the pandemic.

“There are far fewer watches on the market today than there used to be,” Adams says.

At the same time, Adams said Rolex does not have an official waiting list and predicted that a waiting list could alleviate the shortage.

For MetaNews.


Jonathan Hobbs

Jonathan Hobbs is an Australian investor and author that trades on a variety of asset classes, including currencies, equities, and commodities. Jonathan’s experience as a macro trader leverages his unique writing style to combine important elements, such as technical analysis and news. The other elements that he brings into his unique writing styles are foundation analysis aimed at rational equilibrium values, evaluating the sizes and motivations of buyers and sellers, as well as identifying the needs of the buyers and sellers in the individual markets. Jonathan is committed to quality writing for new traders as well as veterans.

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