Zero Hedge is happy to introduce its newest contributor, Travis, whose extensive background in the intricacies of the ultraluxury world will provide a welcome perspective on the mysterious world of goods that usually show up in the pages of the Robb Report, on the walls of Stevie Cohen's uber-plumbed mansions and on the wrists of momentum chasing day traders (one has to give it to them: they have made a mint over the past month; their mutual fund brethren who are only now getting involved will be stuck wearing a '98 Ironman). We hope, as the government expands the PPIP and TALF to include such asset classes as BBB tranches on Patek Philippe and Monet-securitized asset pools, to present the information needed to make informed decisions on whether 6x leverage is sufficient to purchase that Murcielago whole loan trading at 22 cents on the dollar which as Kudlow says, is absolutely money good.
The Rolex is Real; But Are the Stories True?
Amid BASELWORLD 2009 drawing to a close, “The World Watch and Jewellery Show” (their funny spelling, not ours), rumors abound for perhaps its biggest showcase, the self-crowned “800-lb. Gorilla” Rolex. It seems not only did the fallen financier Bernard Madoff have a penchant for ripping-off golf buddies, club cohorts- the rich, the famous, the charitable and anonymous alike; he also cheated their wrists.
Uncle Bernie didn’t shuck his victims of their shiny bejeweled Rolex Oysters (that would have been seemingly straightforward, almost harmless in perspective) he supposedly Ponzified Rolex, SA- the ultra private, secretly veiled, principally owned charitable trust that manufactures and markets an estimated 1,000,000 wristwatches a year, out of some $900 million dollars. (Like anything and everything else Rolex, this is all heresy, speculation at best.)
Rumors began to swirl, or in Rolex’s solid case of 904L Stainless Steel, Perpetual-ate, when the past CEO Patrick Heiniger abruptly stepped-down due to “personal interests,” only to be replaced by former banker and CFO Bruno Meier in December 2008. Meier is just the fourth CEO in Rolex’s 104-year history. The Heinigers both Patrick and father Andre, having taken-over Rolex’s affairs since the passing of its founder, Hans Wilsdorf in 1960. Was Heiniger responsible for losing the better of a Billion to Madoff? Wouldn’t be the first charity to be shaken down by the Ponzimeister.
Rolex, notoriously quiet and secretive among the hallowed Swiss wristwatch industry (in itself infamously shrouded in a bit of legend and mystique) is controlled by the Hans Wilsdorf Foundation, a charitable trust that supposedly donates a lion’s share of Rolex profits to hundreds, thousands, millions (pick a number, any number) of charities and causes worldwide.
Again, any and all figures, facts and stories confirmed or denied by the company are estimates, with much if not all truth coming from dealers and industry insiders; most of whom are bitter and disgruntled, not only at Rolex, but at the downturn of the luxury goods market whose business has plummeted with the recession by about 40%.
Yet despite a global meltdown of historic proportions, Rolex (as it continually reports every year) set record profits in 2008; forever and always raising the upward bar, along with the watch MSRPs which continue to rise every year, sometimes even a few times a year. Enthusiasts will cheer- “Rolex makes a million watches a year… And they sell everyone of them…” How jaded are the people “watching” really? (Take it from a collector, pretty jaded…)
Though most loosely associated with Rolex are smitten and arrogantly aware of the only wristwatch that really matters, both in value and brand-recognition; the truth is- their dealer networks have been cut short by the company, pulling and controlling franchises of rights, forcing products, controlling prices and dumping inventories on retailers struggling to stay open in the malls across the world, no to mention boutiques on 5th Avenue, Worth Avenue, Rodeo Drive, Bond Street, maybe even shady 47th Street too.
So are the stories true? Ask if the Rolex is a fake? Even if it were, the asshole wearing it wouldn’t tell you anyway. Why should the company? Like anything Rolex, if it’s not purported, it most certainly is perpetual and water-resistant in a perfect storm, a flood, of bad news.
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