How CW became a £100m brand

jtc · Post by **jtc** » Mon Jul 01, 2024 5:45 pm

https://www.esquire.com/uk/watches/a614 ... d-watches/

Interesting valuation and article/interview.

tikkathree · Post by **tikkathree** » Mon Jul 01, 2024 7:22 pm

jtc wrote: ↑Mon Jul 01, 2024 5:45 pm https://www.esquire.com/uk/watches/a614 ... d-watches/

Interesting valuation and article/interview.

Nice one @jtc . I'm ploughing through right now and as I'm fighting (1) sleepy eyes and (2) thinking I already know some of it I think I shall read the entire article over breakfast.

kev017 · Post by **kev017** » Mon Jul 01, 2024 7:30 pm

Nice read. Thanks. August just around the corner…

scooter · Post by **scooter** » Mon Jul 01, 2024 8:57 pm

Yes, very interesting.

scooter

Post by **Bahnstormer_vRS** » Mon Jul 01, 2024 8:57 pm

A lot to get through and an interesting read.

Of course in true journalistic fashion the article's title / headline is misleading; read on and you'll find out how / why.

Guy

thomcat00 · Post by **thomcat00** » Mon Jul 01, 2024 9:32 pm

Nice to read something with a bit more depth. Interesting and revealing. Thanks for the share.

Masterwoodsman · Post by **Masterwoodsman** » Tue Jul 02, 2024 5:36 am

Very interesting read thanks for posting

nbg · Post by **nbg** » Tue Jul 02, 2024 8:11 am

A good article, with an attention grabbing headline.

Neil

Maraeburn · Post by **Maraeburn** » Tue Jul 02, 2024 10:48 am

really interesting, I think we knew this already, but 8-9 times as an average multiple to produce the watches, so my snoopy I just bought only cost just over £1k to make!

I guess when we all worry about how fake watches can be so good, there is the answer - it may cost about £700 for Rolex to produce a Rolex, so allowing for the dodgy paying practices of the illegal fake watch makers in china, they can probably produce nearly the same quality watch (without the movement of course) for a couple of hundred quid!!

I also wonder what that brand that sells for 34 times it's cost is? I suspect Bremont, albeit they are clearly in a bad place so perhaps not...

tikkathree · Post by **tikkathree** » Tue Jul 02, 2024 12:09 pm

kev017 wrote: ↑Mon Jul 01, 2024 7:30 pm Nice read. Thanks. August just around the corner…

Cancel the family holiday? Nah, take the laptop, stay in wifi, earmark early evenings for a pre-launch video.

nbg · Post by **nbg** » Tue Jul 02, 2024 12:33 pm

Maraeburn wrote: ↑Tue Jul 02, 2024 10:48 am really interesting, I think we knew this already, but 8-9 times as an average multiple to produce the watches, so my snoopy I just bought only cost just over £1k to make!

I guess when we all worry about how fake watches can be so good, there is the answer - it may cost about £700 for Rolex to produce a Rolex, so allowing for the dodgy paying practices of the illegal fake watch makers in china, they can probably produce nearly the same quality watch (without the movement of course) for a couple of hundred quid!!

I also wonder what that brand that sells for 34 times it's cost is? I suspect Bremont, albeit they are clearly in a bad place so perhaps not...

I don’t think that MF’s 8-9 times holds up to scrutiny…

He uses the analogy of a 3x multiple, saying they picked that, because that is what they were used to from experience in consumer retail. Cost to make £1k, sell to wholesale for £3k, retailer then applies the same multiple and sells for £9k. Now that might well be the case for mass produced plastic stuff manufactured in say China, but does it really apply as an average for a typical “luxury” watch brand, for watches selling at say £6k-£9k retail.

It doesn’t take much digging to find the typical margin made by an AD on a steel Rolex. It is certainly far less than a selling price of 3x the amount they paid Rolex. I do though imagine that Rolex charge the AD more than 3 times the cost to produce.

The cost of production of a Rolex, relative to the amount paid by the AD is speculation. The amount paid by the AD and the RRP are not speculation.

I very much doubt that Bremont are the 34 times brand.

Neil

jtc · Post by **jtc** » Tue Jul 02, 2024 12:50 pm

My guess is the likes of Richard Mille or maybe Patek are above 30 times cost

albionphoto · Post by **albionphoto** » Tue Jul 02, 2024 1:25 pm

There were some nice tit-bits in this article. The "new" watch is in August, the Dallas showroom will be stockless (hmm...) and a new complication maybe next year.

exHowfener · Post by **exHowfener** » Tue Jul 02, 2024 1:33 pm

Thanks for posting, it was an interesting read.

I don't for one minute think that Bremont sell at 34 time cost (post above). Nor does it seem credible that a retailer pays 1/3 of what they sell at.
I'm also not sure that CW have been all THAT open that their cases are made in China? The only company I've seen that are transparent about origins are Ollech & Wajs.

Cost is interesting; any passing accountant will tell you that there are several ways of arriving at a cost figure - all perfectly legal as long as the company is consistent with the method used - which will give a different figure.

OllyW · Post by **OllyW** » Tue Jul 02, 2024 2:02 pm

nbg wrote: ↑Tue Jul 02, 2024 12:33 pm
Maraeburn wrote: ↑Tue Jul 02, 2024 10:48 am really interesting, I think we knew this already, but 8-9 times as an average multiple to produce the watches, so my snoopy I just bought only cost just over £1k to make!

I guess when we all worry about how fake watches can be so good, there is the answer - it may cost about £700 for Rolex to produce a Rolex, so allowing for the dodgy paying practices of the illegal fake watch makers in china, they can probably produce nearly the same quality watch (without the movement of course) for a couple of hundred quid!!

I also wonder what that brand that sells for 34 times it's cost is? I suspect Bremont, albeit they are clearly in a bad place so perhaps not...
I don’t think that MF’s 8-9 times holds up to scrutiny…

He uses the analogy of a 3x multiple, saying they picked that, because that is what they were used to from experience in consumer retail. Cost to make £1k, sell to wholesale for £3k, retailer then applies the same multiple and sells for £9k. Now that might well be the case for mass produced plastic stuff manufactured in say China, but does it really apply as an average for a typical “luxury” watch brand, for watches selling at say £6k-£9k retail.

It doesn’t take much digging to find the typical margin made by an AD on a steel Rolex. It is certainly far less than a selling price of 3x the amount they paid Rolex. I do though imagine that Rolex charge the AD more than 3 times the cost to produce.

The cost of production of a Rolex, relative to the amount paid by the AD is speculation. The amount paid by the AD and the RRP are not speculation.

I very much doubt that Bremont are the 34 times brand.

Neil

There’s an interesting article on A Blog To Watch discussing the relationship between watch brands and retailers. 35-50% profit sounds more realistic than the 300% markup insinuated by MF.

When selling products via wholesale to retailers, brands typically charge anywhere from about 50% to 65% of the retail cost of the watches themselves. That leaves about a roughly 50%-35% profit margin for retailers.

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