Cartier owner destroys more than £400m of watches in 2 years

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Thegreyman
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Re: Cartier owner destroys more than £400m of watches in 2 y

Post by Thegreyman »

^^^I thought you in particular might find this article a bit painful/wasteful Steve!
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Re: Cartier owner destroys more than £400m of watches in 2 y

Post by nbg »

I wonder how many other of the well known brands do something similar?

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Re: Cartier owner destroys more than £400m of watches in 2 y

Post by Bahnstormer_vRS »

Somewhat less sensational and more objective report, than the original, from WatchPro

The €481M buy-back looks small fry compared to their profit, which increased to €1.22 billion.

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Re: Cartier owner destroys more than £400m of watches in 2 y

Post by nbg »

^^^^^ Thanks Guy.

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Cartier owner destroys more than £400m of watches in 2 years

Post by gaf1958 »

Here’s a somewhat cynical, but nonetheless interesting view from an Australian watchmaker / premium second hand dealer that I’ve bought many watches from...

It also relates to Watchfinder - a company / service that many here seem to use.

Richemont bought second-hand dealer Watchfinder

On May 18, The Guardian reported that Richemont bought back stock from jewellers to stop it being sold at knockdown prices. The actual melodramatic title of the report was "Cartier owner destroys more than GBP 400 of watches in two years"!
https://www.theguardian.com/business/20 ... ack-policy
As bombastic as it sounded, I didn't buy it; I had no doubt that soon we were going to find out more about this deal. So we did. The slump in demand for certain brands, as well as an oversupply of "collectables", has forced Richemont to buy back their unsold stock. But make no mistake - no-one in Switzerland is going to steam-roll over the pile. These watches are soon to hit the pre-owned/grey market. In a very clever way: two days ago, Richemont bought second-hand UK dealer Watchfinder with the intention to take a share of the pre-owned watch network. Call me a cynic, but Richemont is not doing this to save and preserve the resale value of your pre-owned piece, but to save their own bottom line.
"Luxury brands have long shunned the second-hand market for premium watches and other luxury goods because of fears that these businesses would impact sales of their products. But several are now looking to break into it, pressured by a sluggish primary market and because they are wary of ceding too much ground to third-parties." - Reuters
It takes no brain to figure out that Richemont is now going to make money selling both new pieces at no discount as well as control the resale prices on the 'pre-owned/grey' market, predominantly online. I doubt this will be a great deal for consumers, however, this is devastating news to brick and mortar retailers, brand's Authorised Dealers, who are going to be pushed aside until eventually they are completely cut off or marginalised to the point where they can no longer compete with neither brand Boutiques nor online dealers.
Mark my words: we are to be flooded with newspaper articles about: 'great Pre-owned Cartier/Panerai/IWC/Richemont stable brands fetching astronomical Auction prices'. The gears are in motion.
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Re: Cartier owner destroys more than £400m of watches in 2 y

Post by Bahnstormer_vRS »

Top post Gary. :thumbup:

I saw the news of the Watchfinder / Richmont deal on WatchPro a couple of days ago and thought to myself 'Investigation by the Monopolies and Mergers Commission (or whatever they are called these days)'?

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Re: Cartier owner destroys more than £400m of watches in 2 y

Post by Thegreyman »

^^^I think it is the Competition Commission Guy.

Interesting that Richemont have bought Watchfinder, there are quite a few other grey market/second hand resellers though so may not have that big an impact on used prices...having said that I'm not aware of the scale of watchfinder...well, have just gone and looked at their March 2017 accounts, they made a profit of just over £5m on £86m of sales. A bit of further research, the 2nd hand luxury watch market is said to be worth about £4 billion annually so if the UK accounted for even 5-10% of that then WF could have anywhere between 20 and 40% of the UK market :shock:
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Re: Cartier owner destroys more than £400m of watches in 2 y

Post by nbg »

When I saw that WF had been sold my reaction was that the Private Equity team that put money into WF have probably got out while the going was good. :)

I certainly don’t see Richemont buying WF will mean that the norm becomes people buying a Richemont Group watch at RRP from an AD, or that the pre-owned prices will firm up.

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