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Rolex CEO Warns Against Treating Luxury Watches as Investments May 10, 2024 (0 comments)

Geneva, Switzerland--Rolex CEO Jean-Frédéric Dufour stressed the importance of recognizing luxury watches as products, not investments.

[Image via istock.com]

In an interview with Swiss newspaper, NZZ, Dufour highlighted the risks of comparing luxury watches to stocks. "We make products, not investments," he stated, adding that comparing watches to stocks is "dangerous" and "sends the wrong message."

 

Dufour's remarks come as the secondhand luxury watch market has declined, previously surging 72% from January 2021 to March 2022 before falling 38%, as highlighted by Entrepreneur. This contrasts with a 13% rise in the S&P 500 index during the same period.

The drop coincided with the Federal Reserve's rate hikes from near zero to about 5%, which curbed consumer spending on expensive items.

Dufour noted the industry's challenges, "2024 will be a challenging year. It marks the end of a phase in which all manufacturers have been doing well."

"In good times, production tends to be too high," the CEO added in the interview. "When markets weaken, as is the case now, retailers come under pressure to cut prices.

"This is extremely problematic because discounts damage emotional products like ours."

Learn more in the entire interview published in NZZ.