Rolex is reportedly finalizing another round of price increases amid continued strong demand from luxury shoppers.
This, according to a Bloomberg report Tuesday (Jan. 3) that noted the latest increase comes just four months after a 5% hike on some watch models in September.
While price increases taking place at the start of the new year are common at Rolex, the second price hike was unexpected and is being done, analysts said, to protect the watchmaker’s margins at a time of currency fluctuations and a strong U.S. dollar.
“Investors are well-accustomed to price rises being a key feature of this attractive industry, but it is encouraging to see this continue given that we believe it will have no discernible impact on volumes,” Barclays analysts Richard Taylor and Pallav Mittal said in a note to clients, per the report.
Beyond watches, luxury retail has continued to perform well in the face of current inflation.
As PYMNTS reported in October, luxury brand Hermes said it would likely raise prices — in this case 5% to 10% — in response to rising costs and currency fluctuations.
Like Rolex, Hermes reported “very good sales momentum” and continued buying power among affluent consumers.
“For the moment, we don’t see any sign of slowdown in any of our markets,” Hermes Executive Vice President of Finance Eric du Halgouet said at the time.
Conversely, U.K.-based luxury brand Burberry has often marked down its products to clear inventory, a move that analysts said had damaged its image, hurt sales and caused its stock performance to suffer as a result.
As a result, Burberry has been working to sell more of its high-end products at full price, both online and in brick-and-mortar stores.
The Rolex price increase also comes just one month after the watchmaker announced it is entering the resale market via a new certified pre-owned service.
The move by Rolex to acknowledge and join the resale process was consistent with what several other luxury brands have done. Rather than ceding that growing reCommerce business to outside platforms, Rolex is enabling its authorized retailers to sell pre-owned products that have been certified as authentic and to reach new customers.
“Because they are built to last, Rolex watches often live several lives,” the firm said when announcing the new certification program.
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