Rolex has hatched up a scheme in this global recession. The company is buying back its own watches in order to keep the luxury brand’s prices high.
Watch sales, like all others, are down. Retailers are starting to severely slash their prices in order to get rid of excess inventory. Luxury watch maker Rolex isn’t happy about this. So the company is purchasing back inventory from dealers who are having trouble selling the watches.
By doing this, dealers get some cash they desperately need and this prevents deep discounts which could tarnish the luxury brand’s prestige. Rolex is of the most protective brands when it comes to pricing and image. They have an almost legendary reputation for not giving significant discounts. Dealers, which operate under the constraints of dealer contracts, are forced to sell the watches back to Rolex rather than potentially making more money by deeply discounting them.
Rolex, being a cash-rich company, doesn’t seem to be phased much by this global recession, and the buy back will probably not hurt them much.
More info: World Tempus (French)