scarce luxury
THE The window of the Dryzun jewelry store in Shopping Pátio Higienópolis, in São Paulo, displays three Rolex models for men, including the Oyster Perpetual Datejust, priced at 102,377 reais. Anyone interested in purchasing one of these watches will have trouble in advance, as an olive green sign with gold lettering warns: “Products for display only – Not available for sale.” Dryzun received about eight new watches per month from the Rolex factory in Switzerland, between men’s and women’s models. None of them spends more than one day in the store. All go directly to the wrists of their owners.
Due to the shortage, a waiting list has been created with the customer’s name and the model he wants. But the most desirable models, such as the Perpetual Datejust and the Submariner (also starting at R$100,000), can only be purchased by old customers at the establishment. New customers have to settle for simpler models, from the so-called “starting line”, such as the Air King, from 50 thousand reais, which are also currently unavailable or have an arrival date.
About forty new imported watches arrive at the Frattina store, in Shopping Iguatema, São Paulo, every month. As with competitor Dryzun, products go to customers who put their names on a waiting list. But a listing isn’t always a guarantee that a purchase will happen.
Apart from being the subject of social differences or collectors’ fetishes, watches also act as an investment: the average annual price of a Rolex is around 6%. Rarer models or those whose production has been discontinued can have a value of up to 40% on the used market.
ON The blackout of luxury items is not exclusive to Rolex or Brazil. Audemars Piguet and Patek Philippe, other high-end watch brands, are also facing a supply crunch with strong demand worldwide. During the pandemic, these two brands changed their way of selling and adopted e-commerce, they are no longer represented by partner stores (as Rolex does, in the seven capitals of the country). But neither brand has parts available for quick delivery. Waiting time in the queue at these watchmakers can take up to three years.
“This very high demand was due to reasons related to the pandemic: people stayed at home and then discovered new passions and hobbies, such as collecting watches,” says journalist Raphael Calles, who specializes in the luxury market and life-style. “There was also the fact that these people couldn’t travel, so there was a rush to local vendors.”
An employee at a luxury watch retailer has a different take on the shortage. “The reason Rolex doesn’t make more watches is because more people want to buy them. And the company knows that this high demand values its product. So it charges more and more, because people are willing to pay,” says the employee, who wished to remain anonymous because he is not authorized to speak about the company. It is a well-known theory that luxury is only luxury because there is little of it and only for a few.
According to consulting firm GlobalData, the luxury market is expected to earn $149.2 billion in 2022, an increase of 8.4% compared to last year. This is despite China adopting strict isolation, preventing its citizens from traveling – and spending – around the world. Then the war in Ukraine caused the closure of many brands in Russia, as happened with the French Hermès. Despite this, the brand’s sales reached 2.7 billion euros in the first half of this year worldwide, an increase of 33% compared to the same period in 2021.
Hermès does not disclose specific figures for Brazil, but the luxury market in general, not just fine watchmaking, is red hot in the country, despite a serious economic crisis. Even the very exclusive Birkin Himalaya Niloticus Crocodile Diamond bag, worth 2 million reais, found a buyer in Brazil (Hermès does not disclose the identity of the client). The name of the work has an explanation. The original bag was created in the early 1980s with the participation of actress and singer Jane Birkin. “Himalaya” is due to the color gradation of the bag, which goes from smoky gray to pearl white, which is a reference to the snow-covered mountain range. “Nile crocodile” because the skin comes from amphibians that live on the banks of the Nile. And the “diamond” is because all the piece’s hardware is encrusted with precious stones.
DFor a long time, Brazilian buyers abroad could only find the latest releases of the biggest foreign brands. That changed after some brands opened stores in the country. At Chanel in São Paulo, the burgundy and pink woolen coat in the window, sold for 37,740 reais, is the same one that can currently be found in Paris and New York. As well as the recent Gucci leather bag in partnership with Adidas, priced at 16,420 reais.
Demand is high, but luxury brands have to work hard. Some even invite buyers with high purchasing power from different parts of the country to come to São Paulo, all paid, to see the new collections up close (and buy, of course).
In April, Louis Vuitton took more than fifty people for a short stay at the Hotel Fasano Boa Vista, located in a luxury condominium in the interior of São Paulo. From breakfast to dinner, the Savoir-Faire 2022 event showcased the brand’s new apparel, jewelry and leather goods. Among the guests were Virginia Mendes – wife of the governor of Mato Grosso, Mauro Mendes (União Brasil) – and Andressa Salomone, heiress of the Savoy real estate group. Participants of such events usually do not post pictures or mention them on their social networks.
Not only watches have disappeared from the windows of São Paulo. At Cartier, watchmaking items are available for immediate delivery, but some jewelry sizes are out of stock. It is not possible, for example, to find certain models of bracelets. Like other luxury brands, Cartier has already got used to Brazilian habits and accepted installment sales. Even millionaires’ eyes sparkle when they discover that they can pay everything on the card in ten installments – without interest.
