The grey market is by no means restricted to the United States. He confirmed that brands sometimes offer him new pieces to sell as pre-owned but would not name them and said it was only a small share of his flourishing business. retail partner for Switzerland's biggest brands but who also sells pre-owned watches online. The excess of the world's products used to flow to Hong Kong, now it flows to the States," said Danny Govberg, an official U.S. "There's a lot of grey market watches coming in from outside the country. The United States is the second-biggest market for Swiss watches and is a hub for grey market watches, with online platforms such as, and. grey market dealer agreed and said that Richemont's Jaeger-LeCoultre and Vacheron Constantin and Swatch's Breguet are also easy to source. "Brands like (Swatch's) Omega and (LVMH's) Tag Heuer are easily available at all times," Randall said. Audemars Piguet, another independent brand, only distributes certain models through its own boutiques. Some of the hardest to source are Patek Philippe and Richard Mille, which both keep a tight rein on production. Randall said that brands vary in their efforts to keep products out of the grey market. In the grey market sales are often clinched in small, shabby stores or via online platforms that do not have most of the watches in stock and source them only when orders are placed. Swiss watch exports fell 8 percent in the first two months of this year, on top of a 10 percent drop last year. In the good times, the industry can take home 20 percent of sales as profit and retailers are still left with an attractive margin of up to 45 percent.īut when business tails off, the manufacturers do not allow official retailers to cut sticker prices too far, fearing that big discounts will damage their brands - a policy that may push cash-strapped retailers to sell to the grey market. Nobody needs a luxury product, but the brands find that when customers see and touch an intricately crafted watch in an opulent boutique and are drawn into its "story", they will want it so much that the price becomes secondary. It was difficult to rein in production when demand fell, partly because the watches are put together slowly in stages, meaning production plans are often made two years in advance.
#Grey market watch dealers cracked
But demand has dropped sharply in the past two years as extremist attacks have deterred tourists from visiting Europe, where many of the watches are sold, and China has cracked down on luxury gift-giving by civil servants. "As much as the brands dislike us, we have more or less the same goals they have - we also want to sell the goods and be able to make a profit," he said.Ĭhinese demand for luxury timepieces boomed after the 2008/09 financial crisis, leading to a surge in production and retail prices. dealers packages of 15 or 20 pieces at a discount.
#Grey market watch dealers free
"For every timepiece we sell, the manufacturer is getting the lion's share of the profit, and then all the search engine queries, image searches, social media brand posts, tweets and pins are terrific and free (advertising)," said Darryl Randall, founder and owner of United States-based online platform, which he said generates sales of about $10 million in good years.Īnother grey market dealer said he will sometimes withdraw watches if asked by manufacturers and that brands regularly offer U.S. Though representatives of the biggest luxury watchmakers, including Swatch Group and Richemont, refused to discuss their strategy with regard to the grey market, some manufacturers may find that it offers benefits. He said that in some cases operators in the grey market are cooperating with the brands, removing new models from sale when asked or reducing discounts manufacturers consider excessive.
"There are many sources for grey market watches: authorized retailers who want to get rid of slow-selling models, country distributors or even the brands themselves," said one watch industry executive who asked not to be named. However, a sudden end to a boom in Chinese demand is forcing the brands to begin working quietly with dealers in the grey market, occasionally to help with sales but mostly to secure some influence over the unofficial resellers, according to dealers and industry executives interviewed by Reuters.
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