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Retailers In Hong Kong Band Together To Demand Price Concession

Watch retailers in Hong Kong, the world's largest market for luxury watches, are collectively demanding price concessions from watchmakers, in the face of tepid demand and rapidly growing inventory.

Beginning in late 2013 the demand for fine timepieces has slumped, with Swiss watch exports growing just 1.9% in 2014. Watch retailers in Hong Kong has been hit particularly hard, with the leading cause being the dramatic drop in Mainland Chinese buyers, and more recently the strong Swiss franc. In response 11 of the biggest watch retailers in the territory have signed a letter demanding price concessions from watch brands.


Accounting for a fifth of Swiss watch exports, Hong Kong saw watch sales fall some 40% in the first quarter of 2015, according to Swiss newspaper Le Temps, and retailers now carry inventory of as much as 6 to 10 months for some brands. On a recent walk through the shopping areas of Central and Kowloon, the glut of inventory was on display in all its glory.

Combined with the operating costs in Hong Kong, which has some of the highest rents in the world, watch retailers are finding it difficult to cope. That being said, the city's retailers made stupendous profits in the good years while Chinese demand was high so they can ride out the lean years.

The letter, signed by major retailers like Emperor and Chow Tai Fook, to the Federation of Hong Kong Watch Trades & Industries, a trade body of retailers and brands, makes several polite requests, including rebates from watch brands. That's meant to compensate for the price reductions enacted by several brands recently, notes Singapore daily The Business Times. Brands that have reduced prices in Asia include Patek Philippe and Cartier, but retailers still have.........


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· Marine Tunnel Rat
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I bought a brand new Rolex Sub 16610 from a Hong Kong AD back in 1996, I paid $1800 for it.

The recent flux of Asian millionaires influence on the market has fueled the jacked up price on all high end Swiss brands, and everybody suffers for it.

Perhaps this will bring the Swiss down to planet earth.

Recently when I was in Vegas, I was staying at the Wynn hotel, which has the world's largest Rolex store on premise. I looked around and the sales people wouldn't discount the watches one iota. When I asked them why, and informed them that the dealers back in Scottsdale discounted at least 10% to 15% they said they couldn't do it, high wealthy Asian customers demanded to pay full price thinking a discount indicated a factory second or a returned item.
 
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I don't know about Hong Kong but the prices for new watches certainly went out the roof recently, look at Omega, Rolex and other luxury brands.

Heck, even a Micro with a Miyota movement normally sells for more then $500... some time close to $1000.

The way to handle the situation of the growing stocks is to discount the prices of the current stocks so that they move. Enough discount will get them moving.

Then if each one on the line stops being too greedy and try to profit too much, then things can move a little faster from there on out.

There will always be affordable and not affordable time pieces, but if each person/store on the line has to profit by not doing anything other then buy and re-sell, then we can surely keep the prices a little more sane....
 

· Marine Tunnel Rat
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The way to handle the situation of the growing stocks is to discount the prices of the current stocks so that they move. Enough discount will get them moving.
Problem with that is the manufacturers like Rolex, Omega, etc. want to keep the prices of their items high, and will punish ADs who discount them.

I live in Arizona and the Jared's I go to used to sell Rolexes, when Rolex found out how much Jared's was discounting their old stock, they pulled the plug on them.

I happened upon the store about 4 months too late, the salesman told me they were selling the Rolexes they had for almost 1/2 MSRP after they lost their AD status.
 
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