7 months ago

Luxury Brands Face Shortening Wait Lists

Luxury Brands Face Shortening Wait Lists
The wait list for a Birkin or Rolex is getting shorter · livemint.com

Luxury brands like Hermès and Rolex have long had wait lists for their products because they make fewer items than people want.

This makes their products very valuable and expensive.

Recently, the wait lists are getting shorter, and the prices for used items are not as high as they used to be.

This is happening because more people are selling their luxury items, and the brands are raising their prices too much.

For brands like Hermès, this is a problem because they rely on people buying other expensive items to get a wait-listed product.

However, having wait lists can be good for brands because it smooths out sales during good and bad economic times.

It also acts as free advertising because people see that these brands hold their value.

But it's hard for other brands to copy this strategy because they need to convince customers that their products are truly scarce.

Key facts

Ferrari Market Cap
$59.6 billion
Porsche Market Cap
$45.4 billion
Ferrari Annual Production
Fewer than 15,000 cars
Porsche Annual Production
More than 300,000 cars
Patek Philippe Annual Production
72,000 watches
Cartier Annual Production
Almost 10 times more than Patek Philippe
Patek Philippe Resale Premium
11% premium to original price
Cartier Resale Premium
31% discount to original price
Rolex Average Premium (Jan 2024)
About 7%
Patek Philippe Premium (Jan 2024)
11%
Hermès Birkin/Kelly Resale Premium
50% above retail prices
Hermès Annual Ad Spend
4% of total sales
Ferrari Shareholder Returns (Past Decade)
Close to 700%
Hermès Shareholder Returns (Past Decade)
Close to 700%
Gucci Owner Kering Returns (Past Decade)
140%

Quotes

Luca Solca

Bernstein luxury analyst

“Current resale premiums seem to suggest that waiting lists have shortened, and that the total supply for Hermès’ bags is now closer to demand than before”
livemint.com

Oliver Müller

Founder of watch-industry adviser LuxeConsult

“New customers don’t get access to these pieces”
livemint.com

Sources

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