Rolex, every mention

Rolex (Audio) · Acquired Feb 24, 2025 · 100 mentions

• ▶ 3:09:26 Ben Gilbert So, there are three concurrent stories here, none of which are Rolexes.
• ▶ 3:09:40 Ben Gilbert And once you get those, you then kind of get the Rolex story.
• ▶ 3:09:55 David Rosenthal Maybe bigger than Rolex the whole time.
• ▶ 3:10:07 Ben Gilbert And incredibly, Joe Thompson tipped me off to this, in a study conducted by Gallup in 1978, they asked the question, have you heard of Rolex?
• ▶ 3:10:27 Ben Gilbert So Rolex did something incredibly right between 1978 and 19 98 to go from 20% brand awareness to 80% brand awareness.
• ▶ 3:12:40 Ben Gilbert Rolex by this point, the late seventies, they're importing whole watches.
• ▶ 3:12:53 David Rosenthal If you look at some of the real, like, enthusiast type historians out there, they sort of bemoan that Rolex stopped innovating after the golden era in the fifties where they introduced all the sport watches.
• ▶ 3:13:21 Ben Gilbert And that, I think, is a huge piece of what Rolex got right, that a lot of other people got wrong.
• ▶ 3:13:34 Ben Gilbert It's the company that Rolex was trying to beat with all their innovative ads and positioning.
• ▶ 3:13:38 Ben Gilbert This is the first company to ever launch a dive watch before the Submariner, and they rushed into, here's how we fight the quartz crisis head on, when they were just not built to be a part of that at all.
• ▶ 3:13:50 Ben Gilbert So this is the place where we see the divide, where Rolex becomes Rolex and Omega doesn't become, you know, they make cool watches, but like, it's not the brand.
• ▶ 3:14:02 Ben Gilbert So, that's Rolex sitting on their hands, watching Omega, and going, ok, don't do that.
• ▶ 3:14:10 Ben Gilbert But of course, Rolex had the cash to do it.
• ▶ 3:14:12 Ben Gilbert You know, Rolex is a privately owned, very successful, very wealthy company where they can take two or three years and see how it plays out.
• ▶ 3:16:18 David Rosenthal Rolex is watching this all play out, and they're like, oh,
• ▶ 3:16:50 Ben Gilbert I don't even think Bivera could have predicted how well this strategy would end up working for Rolex.
• ▶ 3:18:54 Ben Gilbert They got a little goofy, and interestingly, Rolex never participated in that.
• ▶ 3:18:59 David Rosenthal Again, they do their own thing.
• ▶ 3:19:00 Ben Gilbert Yeah, and they want to make best engineered, extremely functional, extremely reliable, not the most flair, not the most artistic, not the most, any of that.
• ▶ 3:20:17 Ben Gilbert So what's Rolex doing?
• ▶ 3:20:19 Ben Gilbert Well, at first they explored quartz like everyone else, but very carefully.
• ▶ 3:20:38 Ben Gilbert I quite like it, but they poured a huge amount of R&D into quartz watches, but they didn't productize most of it.
• ▶ 3:20:45 Ben Gilbert They did these small runs of this oyster quartz, which was a very Rolex-y way to do quartz that a lot of people have called over-engineered, but they pretty quickly got to this idea that if they wanted to lean into mechanical as a…
• ▶ 3:22:19 Ben Gilbert The thing I was trying to dig on this is, was this a risk that Rolex took?
• ▶ 3:22:50 David Rosenthal You know, they took their time.
• ▶ 3:22:51 David Rosenthal They waited.
• ▶ 3:22:52 David Rosenthal They watched what not to do, and then they saw the playbook with Blancpain of what to do.
• ▶ 3:22:57 David Rosenthal And then they hit the gas.
• ▶ 3:22:59 Ben Gilbert And they were starting to see what was happening in Italy, as you described.
• ▶ 3:23:23 Ben Gilbert I also think Rolex had a built-in hedge because of their independence and because of their cash position.
• ▶ 3:23:41 Ben Gilbert And Rolex is this incredibly conservative company.
• ▶ 3:23:57 David Rosenthal Much like the IKEA foundations that we talked about on that episode, the primary purpose of the Wilsdorf Foundation is to ensure the continued operations of Rolex.
• ▶ 3:24:19 David Rosenthal Rolex is just one foundation in Switzerland, the most ironclad privacy foundation friendly laws in the world.
• ▶ 3:24:34 David Rosenthal But make no mistake, they are not responsible for shareholder return, profits, you know, number one is continued operations of Rolex.
• ▶ 3:24:42 Ben Gilbert They can have three bad years in a row, and the CEO might not get fired.
• ▶ 3:24:46 Ben Gilbert And they're just playing a different game.
• ▶ 3:24:49 Ben Gilbert In 1978, right in the middle of the Quartz Crisis, this is when Omega's throwing stuff at the wall, they released the Sea-Dweller 4000.
• ▶ 3:25:05 Ben Gilbert So Rolex sort of had this built-in hedge.
• ▶ 3:25:08 Ben Gilbert They would have been in great shape if they needed to go quartz.
• ▶ 3:25:11 Ben Gilbert They had the brand.
• ▶ 3:25:12 Ben Gilbert They had developed the technology to do it well.
• ▶ 3:25:15 David Rosenthal They had the product.
• ▶ 3:25:17 Ben Gilbert They just sort of hoped it wouldn't come to that.
• ▶ 3:25:20 Ben Gilbert And also, as we've talked about, it would require dramatic change at Rolex.
• ▶ 3:25:24 Ben Gilbert If it became a quartz company, they really just wanted to be able to make their six watches.
• ▶ 3:25:29 Ben Gilbert And so I think if they had gone quartz, Rolex would be fine today.
• ▶ 3:25:48 Ben Gilbert And I think the important thing is they maintained the option to go play the other strategy
• ▶ 3:25:54 Ben Gilbert That Omega was playing if they really needed to, but they sort of just hoped it wouldn't come to that.
• ▶ 3:26:01 Ben Gilbert So by 1989, it's extremely clear that their strategy is working.
• ▶ 3:26:05 Ben Gilbert Along with Patek Philippe, they had record sales that year.
• ▶ 3:26:12 Ben Gilbert Patek was similar to Rolex in their strategy.
• ▶ 3:26:35 Ben Gilbert Rolex is making, like, a 100,000.
• ▶ 3:26:38 David Rosenthal It really was, as you say, a incredibly well-managed, but ballsy decision on Rolex's part.
• ▶ 3:26:49 David Rosenthal They're in a very different part of the market than Rolex.
• ▶ 3:26:58 Ben Gilbert Rolex is actually not a luxury company.
• ▶ 3:27:19 Ben Gilbert These watches sell for eight, 10, 30 times as much as Rolex watches, and they produce way fewer of them.
• ▶ 3:27:26 Ben Gilbert I mean, Rolex is a industrial, engineered, beautiful, consistent, reliable product.
• ▶ 3:27:57 David Rosenthal That is not Rolex.
• ▶ 3:28:03 David Rosenthal The reason I think that Rolex is a luxury company extraordinaire is managing the market.
• ▶ 3:28:19 David Rosenthal And Rolex does the same thing.
• ▶ 3:28:20 Ben Gilbert Yeah, Rolex is in control.
• ▶ 3:28:22 David Rosenthal Rolex is completely in control.
• ▶ 3:28:24 David Rosenthal They could sell their products for much, much more than they do, and they do not, because it is the right long-term decision to do so.
• ▶ 3:28:37 David Rosenthal The luxury strategy that they manage with, which really comes into the next CEO, Andre Heininger's son, Patrick, who takes over in 1992.
• ▶ 3:28:52 David Rosenthal You're not buying Rolex for the features.
• ▶ 3:28:54 David Rosenthal You're buying Rolex for what it says about you.
• ▶ 3:28:57 David Rosenthal And they are a high-volume luxury player, again, in comparison to a Patek or a Audemars or something like that.
• ▶ 3:29:46 David Rosenthal What Patrick really did within Rolex was he vertically integrated the company.
• ▶ 3:29:58 David Rosenthal For rumored roughly a billion Swiss francs, Rolex buys Agler and makes it officially in-house.
• ▶ 3:30:06 David Rosenthal But the other thing that he did that people will talk about, he consolidated all the factories, every physical location where parts that went into Rolex watches were made, whether those were in-house Rolex made or a third-party supplier…
• ▶ 3:30:25 David Rosenthal Four big, massive, consolidated sites where they own and produce everything in-house.
• ▶ 3:30:31 David Rosenthal This is super important and all in service of this luxury strategy of brand management, and I owe a big thank you to James Dowling, one of the co-authors of The Best of Time, which is a great Rolex history.
• ▶ 3:31:46 David Rosenthal Every Submariner that comes in a Rolex box is of uniform quality.
• ▶ 3:31:46 David Rosenthal Every Submariner that comes in a Rolex box is of uniform quality.
• ▶ 3:31:58 Ben Gilbert Rolex bought their bracelet maker, they started forging their own metals in-house, gold, steel, you name it.
• ▶ 3:32:08 Ben Gilbert And they brand it.
• ▶ 3:32:09 Ben Gilbert Rolex nerds all recognize Rolesor and Oystersteel and Everose.
• ▶ 3:32:13 Ben Gilbert They already had a lot of control over their future from before, from their private ownership, but now they really do, because production is also in their own hands.
• ▶ 3:32:36 David Rosenthal Rolex now has the same thing.
• ▶ 3:32:39 David Rosenthal In these four mega sites, they have their own technology, their own people, their own machines.
• ▶ 3:32:45 David Rosenthal In, when was this, twenty-fifteen, I think, they invited four bloggers, Ben and James were two of them, to come and tour the facilities.
• ▶ 3:33:32 David Rosenthal Submariner or Daytona.
• ▶ 3:33:32 David Rosenthal Submariner or Daytona.
• ▶ 3:33:34 Ben Gilbert I mean, after I read Ben's piece, I kind of took a step back and thought, huh, Rolex actually is the highest quality thing.
• ▶ 3:34:05 Ben Gilbert They're going to absurd lengths to make these things the highest quality engineered and produced products in the entire industry or in any other industry too.
• ▶ 3:34:27 David Rosenthal They transitioned leadership first to Bruno Meyer, who had been the CFO, and then in 20 11 to Gian Riccardo Marini, who was a 40 year Rolex veteran, and had come up through Italy.
• ▶ 3:34:41 Ben Gilbert Over 90 years, they had three CEOs.
• ▶ 3:34:57 David Rosenthal And I think it was just sort of a accident of timing that they then had these two CEOs for relatively short tenure and just was because they were older, but they were both long-term Rolex veterans.
• ▶ 3:35:10 David Rosenthal And what they do together through 2008 and the financial crisis, I think is the other side, the demand side of the equation that cements in my mind Rolex being a luxury player is the financial crisis was
• ▶ 3:36:06 David Rosenthal Rolex didn't do that.
• ▶ 3:36:09 David Rosenthal Rolex didn't cut prices, didn't stop sponsoring the U.S.
• ▶ 3:36:13 Ben Gilbert So this is another spot where, if you're Rolex, you're like, well, how long is this financial crisis gonna last?
• ▶ 3:36:36 Ben Gilbert So interestingly, Rolex actually massively doubled down on their marketing spend in the US during the 2008 financial crisis
• ▶ 3:36:54 Ben Gilbert The first time I saw this, I was like, who at Rolex?
• ▶ 3:37:28 Ben Gilbert Rolex and other Swiss watch brands used to throw these events to generate interest in their watches, and it would be for one person we talked to who called them old fuddy duddies who would show up.
• ▶ 3:38:00 Ben Gilbert But given Rolex's unique position versus what everybody else could do, the opportunity's there for the taking.
• ▶ 3:38:12 David Rosenthal This was the easy half of the decision for Rolex, was to double down, keep going during and after the great financial crisis.
• ▶ 3:38:23 David Rosenthal Textbook, playbook, the thing to do when you're in a position like Rolex.
• ▶ 3:39:08 David Rosenthal What does Rolex do?
• ▶ 3:39:09 David Rosenthal They stay the course.