If you’ve recently picked up a luxury watch for a low price thanks to a well-timed sale you’re in luck, because manufacturers are going above and beyond to make sure it doesn’t happen again. Swiss luxury goods holding company Richemont, the company behind brands like Cartier and Montblanc recently bought back and destroyed around $590 million dollars’ worth of luxury watches in the past two years. The reason? The watches would have been on sale for rock bottom prices.
The company originally began this practice when they first believed that a sales slowdown in Asian markets would push their products into a “grey market” where they would be sold by unauthorized sellers for low prices. If watches became more easily available and cheaper but less reputable, that would of course damage their exclusivity and value. This time, the watches were repurchased from European markets.
Richemont bought back watches from coveted brands including Piaget, IWC and Vacheron Constantin only to have them dismantled and recycled. While this may be an expensive and somewhat embarrassing thing to do at present, the practice does help the brand retain their reputation and price points in the long run. The bigger question at this stage is, with lagging sales pushing manufacturers to take drastic steps, what is the future of the luxury watch industry?