Rolex’s Latest Price Increase for 2020: What it Means -

Rolex’s Latest Price Increase for 2020: What it Means

Rolex announced late last year they were set to increase prices globally by an average of 7.4% from January 1st 2020.

In our last article we covered which models were most affected here in the States and by just how much. In truth, the rise was probably overdue, it being the first in the U.S. since 2012 and worked out as being a hike of between 3%-6% on the majority of the brand’s watches.

But if you are already a Rolex owner, a vintage collector or are thinking about purchasing your first in the near future, what does the increase mean to you?

Good and Bad News

Although Rolex was as unforthcoming as it usually is about it, the news of a worldwide raise was hardly a surprise.

Anyone who has tried to buy a stainless steel tool watch from their extended range will know the difficulty of purchasing one through an Authorized Dealer. Shopping for a brand new steel Daytona or GMT-Master II from an official source is essentially an impossibility these days, giving rise to the situation we now have on the preowned market where these pieces often go for as much as double their retail price. Although Rolex themselves have manufactured the situation by ruthlessly limiting the supply of their most popular models in order to drive up demand, it is obvious they could be charging a great deal more for them and still have plenty of willing customers.

So first the bad news. That drastic shortage of available watches has led to the inevitable waiting lists, and for something like a ref. 116500LN Cerachrom Daytona, said lists can often stretch off far into the distance.

Just because you managed to add your name last year doesn’t mean you get to pay 2019 prices when you finally make it to the top. Once your day eventually comes, you will be forking out the new rate and, as you will likely be waiting a significant amount of time, this latest increase may well not be the only one you have to stomach. If you’re really unlucky, you might find you are paying the same price you could have bought the watch for on the secondary market right at the start and not had to suffer the delay at all!

So, not ideal for those looking to purchase new. And if you were thinking of going preowned, chances are the value of those watches is going to stay inline with the price increase as well. Rolex hasn’t said whether it is going to ramp up production to better satisfy demand, but it is highly unlikely. The brand has been capitalizing on its reputation as the maker of aspirational status symbols since the 1980s, with great success. Going hand-in-hand with that is the exclusivity factor. If just anyone can buy a watch with no effort, it dilutes the overall effect. What you want is people fighting tooth and nail for your products, and only handing them out very sparingly is one surefire way of achieving that.

And the Good News?

Along with the aesthetics, longevity and peerless engineering, a major part of the appeal of Rolex watches has long been their investment potential.

If you are already an owner, this latest price rise is an important event in that the value of your watch is likely to keep track. That means, if we take the no-date Submariner as an example, it went up by just over 5%, so the one in your collection should enjoy a similar increase.

In fact, it could be a whole lot more. Some of the most in-demand models just continue to experience incredible growth year after year.

Another massively popular Sub, the green ref. 116610LV better known as the Hulk, now has a formal retail price of $9,350 (up 3.31%). Unused models are currently trading at about $18,500 on the preowned market. This for a watch that has been with us for a decade.

That ceramic bezel Daytona rose more than 11% last year alone and easily sells for $25,000 as a secondary purchase, as opposed to its new list price of $13,150 (6.05% up from 2019).

It’s the same story with pieces like the Pepsi or Batman GMT-Masters, where they can be snapped up for more than twice the official rate, or the Sky-Dweller which, after a lukewarm start in 2012 for the precious metal versions, have seen the newer steel examples go up by as much as 50% in the last 12 months.

Rolex’s sport watches, and especially the stainless steel ones, are enormously sought-after and virtually unattainable at ADs and, as we’ve said, production is likely to stay the same. There aren’t suddenly going to be more of these models out there to help bring the preowned price down. If you are lucky enough to already have one, or indeed any Rolex, chances are it is worth at least as much if not considerably more than you bought it for.

So is this price rise going to affect Rolex’s sales? Probably not in the slightest. An extra 3%-6% is comparatively little in the great scheme of things, and sticking an extra few hundred dollars onto the price of some of the best luxury watches in the business won’t deter anybody. Even the biggest jumps, with the likes of the Everose Yacht-Master ref. 126655 going up by nearly 9.5% won’t have much impact. People who had $24,950 to spend on a watch in 2019 will likely have $27,300 readily available this year.

It is all just proof, if it was needed, of why the brand makes such a great asset. The initial buy-in may seem high, but no other luxury item performs like a Rolex.

— Featured and Body Photo Credits: Needpix (cc).
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