The Fourth Wheel, Issue 83

Rolex fined €91m in France, and the highs and lows of 2023.

Hello and welcome back to the last issue of The Fourth Wheel for 2023! I’ll start with the most important item of business: thank you. Thank you all for reading TFW this year, for sharing it, commenting on it, correcting it where necessary (!) and in some cases contributing to it. Thank you most of all to those of you who have paid to subscribe: it is thanks to you that the newsletter continues to exist, and continues to grow. I don’t take any of your support for granted.

Before we go any further, in case you missed it last week, there will be no newsletter next Friday (December 29th). The Fourth Wheel will return on January 5th with the answers to the Christmas Quiz (hope you’re all enjoying that - do let me know if it’s too easy, too hard, or just too damned nerdy).

---

---

The Fourth Wheel is a reader-supported publication with no advertising, sponsorship or commercial partnerships to influence its content. It is made possible by the generous support of its readers: if you think watch journalism could do with a voice that exists outside of the usual media dynamic, please consider taking out a paid subscription. You can start with a free trial!

Here’s a little taste of what you might have missed recently:

A Zoom Call With Jean-Claude Biver, and Ten Ways To Improve The GPHG
A Brief History Of Lightweight Watchmaking
The Watch I Wore Most In 2023
The Twelve Most Significant Watches In The World
Issue 80: Ask Me Anything

---

News broke this week that Rolex France, the regional subsidiary of Rolex SA, was fined €91m by the state regulator for preventing its authorised retailers from selling its watches online.

If and when Rolex makes its watches available online, it will change the watch landscape permanently. I’ve always thought it should happen, but I’m not sure this is the way.

This ruling in France is interesting for several reasons. Philosophically or economically, it raises a counter-intuitive argument, at least if you’re any kind of free-market capitalist: we tend to take for granted that companies have the right to dictate how and where their products are sold. Is it so unfair of Rolex to impose a blanket ban on e-commerce? There is no evidence that customers are disadvantaged, I would say - Rolex watches are available (or not available, as the case may be) in every large town or city in France.

I say I always thought it should happen: my view was that e-commerce has revolutionised - or at least, taken over - most other forms of retail, so why not watches? I understand some people like the sense of ceremony you can enjoy by visiting a boutique, and of course there’s no substitute for trying watches on before you make a decision, but as a whole I feel online shopping, when you know what you want (or can confidently return it), is just easier and better.

But Rolex has made not being available online part of its myth. It has maintained an air of exclusivity - of course, this all feels so totally moot when the Rolexes most people want are fundamentally nigh-on impossible to buy anyway.

What would be so bad about Rolex selling online? The brand says its stance thus far is “justified by the need to combat counterfeiting and parallel trade”, which the regulator rejected. It’s always seemed to me to be about control, and brand image but I don’t see why either is a real hurdle to selling online. I don’t like waiting list and purchase-history led retail strategies, but it’s Rolex’s prerogative. Sure, it doesn’t want its watches to be available first-come, first-served - but e-commerce doesn’t have to mean that. You can still have loyalty schemes, waiting lists, preferential treatment, carefully controlled distribution and required purchase history with online transactions. It’s labour-intensive but no more so than bricks-and-mortar retail. I may be biased, but if you can buy a Bovet or a Vacheron or a Ressence on Mr Porter, is buying a Rolex on the internet going to drag its image through the mud? People say it doesn’t need the internet when it already enjoys such huge demand. That’s true. It’s also pointed out that Rolex isn’t answerable to shareholders or investors, so the purely financial arguments aren’t always going to win the day.

What I find funny about this ruling is that it claims to be at least partly in the interests of Rolex’s retailers, as if Rolex enabling e-commerce would necessarily make them any better off. I think it could have the opposite effect. Particularly with this year’s acquisition of Bucherer, I feel that if Rolex is forced to embrace e-commerce, it might start to ask why it needs other retailers at all.

It’s not all about what Rolex needs, in a purely profit-and-loss, supply-and-demand sense. Why wouldn’t Rolex want to deliver a smoother, slicker experience for its customers? I think it’s actually totally on-brand for Rolex to realise it could not only do e-commerce, but do it better than anyone else. The most reliable watch in the world, delivered to your door! Rolex’s incredible attention to detail is tailor-made for a proper, substantive integration of blockchain technology; its digital fingerprinting would be DARPA-level. Its fulfilment would be flawless. Ultra-high definition 3D-mapping of your individual watch, a full sonographic trace of its escapement a totally unique identifier; every part logged and registered. To ward off bots, Rolex customers would be offered the most advanced and secure digital membership imaginable. You think Rolex exerts control over its clientele now? Imagine a world in which it operates a centralised global database of every single buyer. From this perspective, middleman retailers are just sand in the wheels. For the brand whose products never shy away from technological improvement, embracing everything the internet can offer a luxury brand seems like the obvious move to me.

---

2023 in review

Back in January I made some brand-by-brand predictions for 2023. I’m not going to score my own homework line by line, however they do serve as a useful starting point to talk about who had a good 2023 and who still needs to push on in 2024. They were so long they spanned two issues - you can check them both out here.

The Fourth Wheel, Issue 35

The Fourth Wheel, Issue 36

I thought A. Lange & Sohne would follow its usual pattern of releases; no-one expected it to mic-drop just a single watch at W&W, and a 100-piece limited edition at that. The Odysseus Chronograph is one of the most interesting watches of the year, and more watches did follow but my overall impression was that Lange had a quiet 2023. Plus, I keep hearing customers complaining about after-sales service and the brand’s total lack of interest in the secondary market, which isn’t great.

In January I wrote “you can bet AP this year will be bigger, wilder and louder than ever… I also predict the Code 11.59’s reputation will continue to rise.” Happy with that prediction. Audemars Piguet was one of 2023’s winners, and in the RD4 Universelle produced most people’s watch of the year. FHB bows out on a high. Bell & Ross? There or thereabouts. Blancpain? I knew the Fifty Fathoms anniversary pieces were coming, I did not see the Swatch x Blancpain Scuba Fifty on the horizon, and I still remain unconvinced that the brand is on the up. Got to give the power of Swatch some credit though, so I guess 2023 is an unexpected win for Blancpain. Speaking of credit, I thought Breitling began the year with plenty in the bank. Not a huge surprise that it had a good year, but my prediction was for it to do weird things with product, not buy up probably the most desirable dormant brand and let its creative director go off and make something truly unique. Prior to the UG acquisition, the word on the street was that Breitling’s private equity backers were losing patience with some of the more extravagant marketing initiatives - witness the quiet disbanding of the most high-profile ‘squads’ - but rolling out a whole new luxury-group-building statement of intent has rather put that rumour to one side. Top marks chez Kern.