Craig LA
888
AD inventories are way up . . . and they are dealing . . .
I was at a large retail store yesterday. Four months ago, they had three Panerais in stock, and they were firm on MSRP. Yesterday, they had 21 Panerais in stock, and they are openly offering discounts. Some of the increased inventory is likely in anticipation of Christmas sales. However, a 700% increase in inventory is illustrative of market forces well beyond Christmas sales.
I have heard through the grapevine that ADs are trying to cancel or delay incoming watches, but the manufacturers are forcing the ADs to continue accepting additional inventory, even though the ADs already have excess stock. The ADs do not want the additional inventory, but they also are not willing to lose the lines, so their inventories are swelling.
I suspect many manufacturers have, or will, reduce production. This is already occurring in other retail sectors (Porsche recently shut down its production line for a day or two). The manufacturers cannot simply continue to oversaturate their ADs. The alternative, of course, is to reduce MSRP pricing. I doubt we are there yet, but it may not be far off. Meanwhile, it is inevitable that ADs will offer greater discounts in order to move the excess inventory. The manufacturers may frown upon it, but what choice do the ADs have under the circumstances.
Separately, I know of private dealers who have substantially reduced their new purchases because they have large inventories that are not moving like they did six monthes ago.
I purchase watches to wear, so most of this is academic to me. On the other hand, there are one or more watches I would consider purchasing if the price was right and, based on the current direction of the market, the price may become right in the not to distant future.
Craig
State of the industry and timepiece market.
The market has changed significantly even in just the last month or so.
AD inventories are way up . . . and they are dealing . . .
