Biggest Rolex Online Reseller Cuts Jobs as Watch Prices Continue Downward Spiral
The prices of luxury items, more specifically pre-owned watches, soared during the early day of the virus pandemic as central banks injected trillions of dollars into the economy. By early 2022, central banks reversed course, tightening monetary conditions, which led to panic in stocks, bonds, and cryptocurrency. In late spring last year, we pointed out that mounting macroeconomic headwinds were beginning to cool luxury watch demand, and ‘boom times’ were over.
After double-digit declines in some timepieces, we even asked: Are Rolex Prices About To Bottom? But that might not be the case as demand continues to sour. The latest sign of worsening trouble for the watch industry is the world’s largest marketplace, Chrono24 GmbH has reduced its workforce by 13%, eliminating about 65 jobs.
The reductions underscore the losses faced by dealers who purchased expensive watches during an unprecedented price surge in 2021 and early 2022. Since then, values for the most desirable models have plunged on secondary markets and on resale platforms such as Chrono24.
The decline in second-hand prices for the top brands has been linked to rising inflation, slowing economic growth in the US and Europe and the crash in cryptocurrencies. The bursting of the crypto bubble erased paper profits for some investors who had turned to luxury watches as a new speculative asset class.
The supply of previously rare pre-owned watches on secondary markets has also increased significantly, driving down values. -Bloomberg
Speaking on watch market gyrations, Chrono24’s co-CEO Tim Stracke said: “We have seen very volatile, you could call it a roller-coaster situation, in the industry,”
Latest data from the Subdial50 index, an index tracking the top 50 most traded second-hand luxury watches on the pre-owned market, has slid nearly 33% in 12 months. The secondary luxury watch market might bottom when central banks reverse course, but judging rates markets, the Federal Reserve might not pivot until late ’23, if not next year.
