Coronavirus Watch 19: Wait for the Christmas Catastrophe

I have a soft spot for OMEGA De Villes. They’re weird in weird ways. You have to want one to buy one. Guilty as charged. So when Robert sent me an AuthenticWatches.com listing for the “Monkey Face” De Ville Chronoscope Co-Axial Rattrapante for $4,795, I went bananas . . .

A box-fresh OMEGA Chronoscope for a Jackson under five grand on a watch that retailed for $13,700? That friends, is a bargain. OK, yes, we’ve discussed the fact that retail prices are merely marketing. Even so, a 64 percent drop in  MSRP is well below any sane concept of dealer cost.

Right before I pulled out my Amex, I remembered something from the deep dark days of March: we featured this same watch in Unloved Watches for Sale. 

At the time, it was selling for $8,475. So a patient punter would have scored an “extra” four thousand dollar discount on a the Rattrapante by waiting a little over two months.

I know what you’re thinking. Did he fire six shots or only five? I mean – who cares about a De Ville Chronoscope Co-Axial Rattrapante? Of course the price of a monkey face watch is going to fall off a cliff. What about watches that normal people want to buy?

Remember the Speedmaster Tuesday Ultraman watch? In 2018, everyone had to have one (reasons). After its debut, flippers sold the $7,100 OMEGA for 40 percent over retail. The thing was hot. Two years later, and brand new Ultraman’s are trading in the low eights.

Fortune may favor the brave, but fiscal responsibility favors the patient. That’s especially true now, as Coronageddon and the smartwatch crisis hammers the luxury watch industry. So don’t get to thinking the price drops are a normal reflection of a fickle public.

You don’t need to hear Cartier chairman Johann Rupert warn of up to three years of “grave economic consequences” to know the luxury watch business is undergoing a major “realignment.” Just as there are three stages of man, this transition has three distinct phases.

Phase one: inventory swells – Sharp-eyed horophiles will notice that previously rare Rolex, top shelf OMEGAs, coveted Pateks and  wide range of previously unavailable models have come to market at not entirely stupid prices. At the same time, prices for monkey-faced watches and other unloved/discontinued models are softening dramatically. “Good” pieces are only slipping slightly, but slipping they are. It’s all down to excess inventory.

Phase two: finance deals – Tourneau has turned this corner, touting their zero percent interest loans on purchases above $3k. Crown & Caliber’s and Bob’s Watches‘ zero [to 30!] percent offers are loaded with money down requirements, credit score caveats, their right to change terms and other fine print. But their easy-money-to-move-the-metal anti-discounting strategy is crystal clear.

Phase three: fire sales – We’ve been out on a limb on this for a while. Not to mix a metaphor, we’re holding pat. If pre-Christmas luxury watch sales don’t move the needle – and it’s hard to imagine them doing so in the midst of a deep recession – hundreds of watch dealers will be out of business.

Liquidated new-in-box stock will flood an already flooded market. That’s when you’ll get maximum bang for your buck – from December 2020 through to February 2021 and beyond. That’ll be just as true for Rolex dive watches as it will be for monkey-faced OMEGAs and weird ass Bell & Ross tourbillons. Not to the same extent, but who knows?

We’re about five months away from having an answer to the question RF keeps asking: how low can they go? Meanwhile, this is an excellent time – perhaps the best time – not to buy an expensive watch. Good luck with that!