[77T]

The thing about valuing Rolex margins inside an AD is that you would need to know their sales mix. I don't - so let's talk industry averages in US. Bear with me as it's a multi-step process.

Rolex sales are a rather small part of the AD's overall jewelry sales. All high-end watch lines contribute as little as 10% to 20% of all jewelry sales. In US, Rolex volume is gated by RUSA. Tag and other brands not as gated.

Average GPM on all jewelry sales volume before the pandemic hovered around 45% at high-end shops. Then plummeted at the outset 2020-2021, and has recovered nicely. But not north of 50%.

So if you factor the small slice Rolex provides, and its capped GPM around 40-ish%, losing an official AD status isn't all that bad financially. What it does do is lower the jeweler's profile in the WIS community.

Now consider the Tara case being discussed...and the prices some have noted for pre-owned on their website. The volume of Rolex sales is unleashed - they now control how many Rolex models they sell. The advantages (+) and tradeoffs (-) below:
- RUSA can't gate inventory (+)
- Secondary Market inventory (+)
- Cost does rise 2x (-)
- Margin is squeezed (-)

We'll see how it plays out - my guess is their raw volume rises and their GPM dips a bit.

But if they click into the online sales channel (which Rolex forbade when they were an AD) and get their prices into line with the market, they are in better shape overall as a jeweler because RUSA no longer demands shop renovations.


Sent from my iPhone using Tapatalk Pro