Rolex's Certified Pre-Owned Business [Part 1 of 4] Why did we start it? Will the service launch in Japan?

The biggest topic in the watch industry right now is the launch of the certified pre-owned Rolex business in Europe. On December 5, 2022, webChronos published an article by Editor-in-Chief Masamasa Hirota titled "Watch Industry Shock! Rolex Begins Selling Certified Pre-owned Watches in Six European Countries."

First, I would like to consider and explain what a certified pre-owned Rolex (CPO Rolex) is and why it started in this way.

The used watch business is sure to undergo a dramatic change!

　Rolex, which has the greatest demand and overwhelmingly largest trading volume in the second-hand market (secondary distribution market) of any other watch brand, announced in a press release on December 1, 2022, that it would be getting involved in the second-hand market, a market it had previously had no involvement in, from early that month. The company announced that its Swiss-based authorized retailer, Bucherer, would begin selling Certified Pre-Owned watches (hereafter referred to as "CPO Rolex") at its boutiques.

　First, let's get the facts straight. Sales of these CPO Rolex watches will begin at Bucherer boutiques, a long-established, prestigious watch retailer, located in six European countries (Switzerland, Germany, Austria, France, Denmark, and the UK). The watches eligible for sale are Rolex watches that are more than three years old. By undergoing maintenance at an authorized Rolex service center, they will be certified as CPO Rolex watches and will come with a two-year international warranty from Rolex.

　Why start with a Bucherer Boutique? Anyone familiar with the special relationship between Bucherer and Rolex will understand the reason. The watch and jewelry store Bucherer was founded in 1888, which means it is older than Rolex, which was founded in 1905. But that's not all. The reason is their high level of technical expertise and overwhelming sales power.

　In March 2005, I visited Bucherer's headquarters and repair department in Lucerne, Switzerland, for an interview with a watch magazine. The first thing that surprised me was that the repair department not only maintained and overhauled modern watches, but also restored complicated clocks over 100 years old that were part of museum collections. This means that Bucherer's technical capabilities are not just at the level of a watch shop, but at the level of a watch manufacturer. Moreover, the company has been producing and selling original watches since its founding. It's no surprise then that the company was able to launch its own watch brand, Carl F. Bucherer, in 2001.

　During an interview at the repair workshop, the manager spoke of their deep bond with Rolex: "We have a larger stock of Rolex parts than Rolex headquarters, and we're the only place to find old parts. When it comes to repairing Rolex watches, no one can beat us. If you need to repair an old Rolex, please leave it to us."

　Furthermore, anyone who has traveled to Switzerland, especially those of the Showa generation, would have the impression that "if you want to buy a Rolex in Switzerland, it's Bucherer." When it comes to Rolex, Bucherer has overwhelming name recognition and sales power in Switzerland and Europe.

　Given these circumstances, it was only natural that Rolex would start its certified pre-owned business by partnering with Bucherer, which has dealerships across Europe.

Trade-ins at authorized dealers become certified used vehicles with proper maintenance

　By the way, the CPO Rolex that Bucherer has just started selling has been maintained in like-new condition by an authorized Rolex service center. So who owns this CPO Rolex? The answer is Bucherer.

　So how did this watch come into being, before being serviced at an authorized Rolex service center and sold as a CPO Rolex?

　Basically, these are Rolex watches that Bucherer has purchased from customers as trade-ins through its "trade-in service" when selling new watches, or that have been brought to its "used watch purchasing department."

　Not just for Rolex, but in Japan, authorized dealers only handle new watches. The distribution channels for new and used watches are almost completely separate, so if you want to sell or buy a used watch, you have to go to a store that specializes in used watches. In fact, "trade-ins" and "purchases" are not commonly offered at authorized dealers.

　However, it is not uncommon for long-established European watch stores, such as Bucherer, to trade in and sell new watches or buy used watches. They have long maintained these watches in-house and sold them with their own warranty.

　In fact, this business style was also practiced in Japan, from the end of the Edo period when Swiss watches began to be imported, through the Fifteen Years' War (a collective term for the 15 years of Japanese foreign warfare, from the outbreak of the Mukden Incident on September 18, 1931, to the acceptance of the Potsdam Declaration in 1945; this includes the Manchurian Incident, the Second Sino-Japanese War, and the Pacific War), and up until the 1970s. However, by the 1980s, watch stores that continued to handle both new and used watches had almost completely disappeared.

　Why did this happen? It's because high-end watches became a luxury business, and watch stores became boutiques for watch brands. Some long-established watch stores in major cities declined and went out of business in the midst of this wave. As a result, authorized watch retailers in Japan today generally only sell new watches.

　However, overseas, it is not the case. In particular, it is common for long-established watch stores to not only sell genuine new watches at list price, but also to buy used watches from owners, maintain them in-house, and sell them.

　Furthermore, as mentioned earlier, Bucherer has an excellent, high-level repair service department. The Bucherer Certified Pre-Owned page below sells certified pre-owned watches from various brands other than Rolex. However, in this case, "certified" means that Bucherer is responsible for guaranteeing the quality of all watches except Rolex.

　This COP Rolex will first be launched overseas in Europe, and will be expanded to authorized dealers other than Bucherer after spring 2023. However, it is said that the service is still under consideration in Japan at this time due to the difference between the domestic and overseas business styles of authorized dealers, who handle both new and used products at the same time. First of all, let's keep this in mind.

What are the benefits of a CPO Rolex?

　So why did Rolex start this CPO Rolex service program? The main reasons and challenges are complex, so we will discuss them in the second part.

　Today, let's take a look at who this program is for and how it benefits you, so you can better understand the meaning and value of this Certified Pre-Owned Rolex program.

　The first to benefit from this program are authorized dealers who handle CPO Rolex watches. By having the trade-in Rolex serviced by Rolex's official maintenance service, the watch can be sold with a special tag and packaging, and with a two-year international official warranty from the original Rolex, rather than from their own company.

　And because CPO Rolex watches are guaranteed by Rolex to be almost the same quality as new ones, they are a solution to the current situation where demand far exceeds supply worldwide. In other words, CPO Rolex watches are watches that authorized dealers can sell in place of new watches that are "on backorder and cannot be sold even if they want to." In other words, they are one of the "trump cards" that can make up for desperate product shortages. This is great news for authorized dealers who are constantly struggling with inventory shortages.

　Of course, a prerequisite for this is that customers recognize the same appeal and value in CPO watches as new ones, and are willing to buy a CPO watch of similar quality, even if it's not new. This is an incredibly high hurdle for other watch brands. However, given the overwhelmingly high quality of Rolex's official maintenance services, recognized by all watch professionals, and the existence of some people who recognize a special value in antique Rolex watches that exceeds that of new ones, I believe that this shift in values ​​may be difficult for other watch brands, but is possible for Rolex.

　The next biggest beneficiary is, of course, Rolex. By implementing this program, Rolex will be able to increase the number of watches that undergo authorized maintenance, which will help expand and stabilize its maintenance business.

　In addition, it is now possible to achieve thorough quality control not only for new products but also for second-hand products, although this is only a portion of the distribution volume, something that was previously impossible.

　Furthermore, this program of "using good things for a long time" is in line with the global goals of the SDGs, and is a good counter to malicious slander such as "production numbers are being deliberately suppressed," which has been circulated in some quarters due to product supply shortages.Establishing a new product circulation cycle like this is also an initiative that will greatly contribute to further enhancing the Rolex brand's advanced and ecological image.

　Although there are likely to be various obstacles and twists and turns, this will also lead to a positive stabilization of the prices and values ​​of pre-owned Rolex watches in the secondary market in the future. According to WatchPro, a British website specializing in the watch industry, which heard from an insider, this certified pre-owned watch business was called "Project Timeless," and indeed, this program is an effort to make Rolex watches "watches with timeless value."

　Furthermore, this program will be of great benefit to consumers who want to buy a Rolex but are unsure when they will be able to get one due to supply shortages, as it will add a new option that offers unparalleled peace of mind: the watch is backed by a Rolex headquarters quality guarantee.

　This has become quite a long manuscript, so I will end this here for the first installment.

　In the next part, I will discuss what kind of dramatic changes Rolex, the most popular and most widely traded watch in the secondary market, will bring to the watch industry and secondary market by entering the certified pre-owned business, as well as the main reasons behind this decision. I will also share my predictions for future developments in Japan.