Watches and Wonders is upon us, which means there are countless new watches to get excited about. Many of the most important watch brands will be showing off their latest timepieces, but none of them garners as much attention as Rolex. The funny thing is, almost in spite of all the hype, Rolex is notoriously conservative and usually has the tamest releases of any brand. However, this latest release took it to another level, causing some to claim that the brand has surpassed being conservative and is straight-up boring. But while I was looking over the new batch of watches, something occurred to me, and I think it might explain the method behind Rolex’s madness or rather their tameness.
I think this release is intentionally aimed at solving the “Rolex problem.” If you’re unfamiliar with this problem, here’s a quick rundown. The demand for steel Rolex sports watches has never been higher, and almost all of them are unavailable at retail unless a dealer vets you and determines that you’re worthy, often after a lengthy wait. You can’t just walk into an authorized dealer and buy, say, a Submariner or GMT or really any other marginally popular model. If you aren’t willing to go through the “vetting process” or “waitlist,” you have to pay a considerable markup—often two or three times the MSRP—at a second-hand or “grey dealer.” This is also part of the reason Rolex releases draw so much attention. People want to see what watch will become the new impossible to get “it” Rolex, and they want to see what watches will become discontinued. People speculate on these watches like they’re investments because these new models and the recently discontinued models often see a considerable spike in their asking price at these second-hand dealers. Despite high demand seeming like a good thing, this level of mania is bad for Rolex. It frustrates and alienates potential buyers. Also, as the second-hand prices continue to go up, so does the risk of a bubble popping, causing the value of Rolex’s to tank. Both of these are not good for the long-term brand value of Rolex.
But with the 2021 release, Rolex threw a wrench in things. First, they didn’t outright discontinue any models in that they didn’t get rid of any model without a replacement. Many people thought the Milgauss, Air-King, and “John Mayer Daytonas” all could be on the chopping block, and because of this, the prices of those watches have risen on the second-hand market. In particular, the John Mayer Daytona—reference 116508 in yellow gold with a green dial—has seen its value rise over 50% since August of 2020, just a matter of months, due to speculation that Rolex would discontinue it during this April update. But that didn’t happen. Really the only watch they truly discontinued was the 39mm Explorer, which they replaced by bringing back the fan-favorite 36mm Explorer. This brings me to the next part of this update cycle that appears to be directly aimed at solving the “Rolex problem.”
Rolex brought back models that had relatively recently gone away. As I said, they revived the 36mm Explorer, which fans have been asking for since it was replaced by the 39mm one in 2010. Also, the GMT Master II can once again be configured with an Oyster bracelet which means the black and blue “Batman” variant is now back in production after only being gone for two years. When the original Batman on oyster was discontinued, its value shot up about 30%. I say all this to illustrate just how much a watch being discontinued or even speculated to be discontinued can affect its price regardless of how many were made or how old it is.
What this latest release has left us with is multiple watches that drastically went up in price because people speculated they would be discontinued, but they weren’t. We also have modern watches that have gone up in value after their production ended—the 14270 36mm Explorer and the original Batman 116710BLNR—both of which are in spirit being produced again. Finally, their most teased and anticipated update—the Explorer II—now has more elegant case lines and an improved movement, but other than that is essentially the same as the watch it replaced. Overall, Rolex is keeping watches longer than we’d expect; they’re bringing beloved watches back from the dead, all while keeping their updates conservative enough that they can only be seen as improvements rendering previous generations not collectible but outdated. This all goes directly against the perception of rarity and uniqueness that has helped create this untenable market. If this keeps up, it will have severe effects on the way the current Rolex market operates, and it just might be the only real clean solution for the brand.
While this is all just speculation based on my very unscientific observations, I think Rolex is too methodical and thoughtful for this to be unintentional. I’ve seen plenty of coverage on the “Rolex problem” and the issue with grey markets, and markups. There have been some theories of how to solve the problem, but a lot of the solutions I’ve seen proposed have come with caveats that they could create yet more problems. The current market conditions are not a good thing in the long run for Rolex, and I have often wondered if there is any way to slow down the hype train without damaging Rolex’s brand. With this latest release, I think Rolex has figured it out, and we may finally see an end to the “Rolex problem”
A special thanks to Brendan Cunningham for his help with this piece. Follow him at @katimepieces on instagram and check out his website horolonomics.com
Another thanks to Zach Kazan @zkazan of Worn & Wound for the encouragement.