With the crisis, the major watch brands have accumulated record stocks that they must sell by all means, including feeding the parallel markets. The International Haute Horlogerie Trade Show will be held in Geneva from January 18th to 22nd.
This is the other Swiss mystery! In the small and tidy world of Swiss haute horlogerie, it is a secret now better kept than banking secrecy: that of sales under the coat of luxury watches to 5,000, 10,000, sometimes more than 50,000. “All brands do it but they will never tell you.” “I’m too small to do that but the big groups do not stop.” “Who, Ah, I could not really tell you” … But you do not have to wait for the discreet dealer with his black briefcase handcuffed to the wrist to see the phenomenon. A simple tour on the Internet can discover on sites like Portero.com, thewatchery.com or watchfinder.co.uk dozens of Rolex, Tag Heuer or Jaeger Lecoutre at -30%, -50% or even -70%,
One of four luxury watches sold at bargain prices
The resale of watches by retailers, or the brands themselves, outside the authorized distribution network has, of course, always existed. But this market called “gray” has developed tremendously with the crisis and now concerns recent watches, still in the catalog of distributors! “Selling well-liked luxury watches is the worst thing for a brand, the opposite of luxury exclusivity,” exclaims Hublot’s boss Jean-Claude Biver. Unfortunately, some large houses have no choice, caught in the throes of record stocks, they end up having to sell by all means to bail out their cash. Because fans of Swiss chronographs have brutally stopped buying from autumn 2008, while watchmakers, who lived on the orders of 2007, continued to produce. “Some are left with two or even three years of production in the pipes,” says an expert, who prefers to remain anonymous. As a result, while Swiss watch exports officially plummeted by 24% between January and November 2009, the gray market would have increased, according to specialists, from 10% to around a quarter of the total market. Europe and the countries close to Switzerland are little affected, but parallel sales concern more than one product out of two in countries like Russia or China. While Swiss watch exports officially dropped by 24% between January and November 2009, the gray market was, according to specialists, 10% to about a quarter of the total market. Europe and the countries close to Switzerland are little affected, but parallel sales concern more than one product out of two in countries like Russia or China. While Swiss watch exports officially dropped by 24% between January and November 2009, the gray market was, according to specialists, 10% to about a quarter of the total market. Europe and the countries close to Switzerland are little affected, but parallel sales concern more than one product out of two in countries like Russia or China.
Even the recent models are concerned
So far, the major watchmaking companies of Richemont (Cartier, IWC, Baume and Mercier …), Swatch (Breguet, Omega …) or LVMH (Zenith, Tag Heuer …) only sold their ” nightingales, “unsaleable models three or four years old. “In this case, it is about tight networks in Africa, Russia or China, which would never have bought otherwise and it does not hurt the brand”, explains, unscrupulously, the general manager of a Richemont house. “What can I do if I discreetly sell an old watch in Nigeria,” says the boss of a LVMH brand. Yes but now, for a year, the nightingales have also made room for the latest models, too many to be sold in conventional circuits. “Until now, when a destacker knocked on the door, it was given 95% of nightingales and 5% of new luxury watches were released. This year, it takes 80% of the first, if we also give it 20% new, “summarizes our expert.
Real jewelry at half price
The destocker is the ideal intermediary to discreetly sell the goods, either directly or by not prohibiting authorized retailers to sell part of their stock. “We all do it more or less,” confesses a famous distributor on St Honoré Street. This is how the Canadian destocker Chiron was able to make up to more than 150 million euros of shopping this year. Or that a site like Watchfinder sees its sales grow by about 30%. The Swatch Group would even have its own destocker appointed, more discreet. “The system is simple, the destoker buys at 20% of the public price, resells at 30% to a semi-wholesaler, who himself sells to several salesmen at 40% so that the final consumer has a discount of 50%”, summarizes a specialist.