Rolex watches are a status symbol. If you've got one on your wrist, people will stop to admire it. It can offer confidence the wearer might not otherwise have and hints at a life of luxury without ever its owner ever needing to say a word.
Rolex has been the official timekeeper of the Le Mans 24 Hours motor race for more than two decades and has partnered with a number of notable celebrities over the years, from golfer Arnold Palmer to explorers Don Walsh and Jacques Piccard.
With more than 100 years of history, Rolex has seen plenty of interesting developments. That includes a change of ownership more than 60 years ago that's unlike just about every billion-dollar company in the world.
Who Founded Rolex?
Rolex was founded more than a hundred years ago in 1905. The company started in London as Wilsdorf and Davis by Hans Wilsdorf and Alfred Davis. The pair imported Swiss movements (the mechanisms within watches) and placed them in cases made by other watchmakers. Typically, the watches were sold to jewelers, who then re-sold them with their own name on the cover.
Shortly after, in 1908, Wilsdorf and Davis registered the "Rolex" name as its brand of watches, becoming Rolex Watch Co. Ltd. in 1915. Wilsdorf chose the name because it could be easily pronounced in any language while being short enough to fit on a watch face. He also liked that "Rolex" kind of sounds like a watch being wound.
Leon Neal/Getty Images
A Brief History Of Rolex
Wilsdorf moved the company from England to Geneva, Switzerland to reduce the taxes the company was paying on imports and exports. In 1920, the company again changed its name, this time to Montres Rolex S.A., later shortening it to Rolex S.A.
Wilsdorf also founded Montres TUDOR SA in 1926, which has served as a sister company to Rolex for nearly 100 years. Tudor watches are more affordable and frequently worn by the military and professional divers, serving a more utilitarian purpose than the luxury status of a Rolex.
Right around the same time as Tudor was getting off the ground, Rolex ran into a problem: dust and moisture were able to get under the watch's dial and crown, which impacted the watch movements. Obviously, a watch that doesn't work is a major problem, so the company needed to find a solution. It bought a patent created by Paul Perregaux and Georges Peret that used a sealed case that made the watch both waterproof and dustproof.
With this new invention — named the Oyster — in hand, Rolex started marketing it like crazy. British swimmer Mercedes Gleitze swam the English Channel (a trip that took more than ten hours) while wearing a necklace sporting an Oyster, and Rolex published full-page advertisements promoting the feat for a full month in the Daily Mail.
In 1931, Rolex developed the perpetual rotor, which allows the mechanism to self-wind, naming it the Perpetual Oyster. The company made a few other developments over the next few decades that are featured in many watches today: a chronometer wristwatch in 1945 that automatically changed the date on the dial; a case that's waterproof up to 100 meters in 1953; a watch that showed two time zones at once in 1954; and in 1956, a wristwatch that changed the day AND date automatically.
As Rolex grew, Wilsdorf continued to run the company. When his wife died in 1944, he established the Hans Wilsdorf Foundation. He left all of his Rolex shares in this private trust and developed additional Rolex models until his death in 1960.
What Happened When The Founder Died?
When Wilsdorf died, the Hans Wilsdorf Foundation assumed control of Rolex. The trust is a nonprofit, meaning it doesn't pay any Swiss corporate income taxes.
The Hans Wilsdorf Foundation reportedly runs the business according to Wilsdorf's own values and vision and has donated a large chunk of its profits to charity. However, Rolex spokespeople have actively shunned questions about just how much they've donated.
How Many Watches Does Rolex Make Per Year?
Rolex makes an estimated one million watches every year. Each is crafted by hand in one of their four factories in Switzerland and features a unique serial number. And while the pandemic did slow down production a bit, the company still churns out a solid amount of watches, even though they're scarce and expensive — and that seems to be a part of their business model.
Some critics believe Rolex intentionally limits the watches that they share with distributors and retailers, using a controlled release to drive up demand. If they can create the illusion of scarcity, more people will want to buy a watch, leading to increased profit.
Rolex is hardly the only company employing such a strategy, but it is a top brand in the pre-owned watch market. That's an industry McKinsey estimates will reach $29 to $32 billion in sales by 2025.
What's The Most Expensive Rolex Ever?
According to the book Vintage Wristwatches, vintage Rolex watches range between $650 and $75,000. But not all watches are created equal, and a few Rolex watches have fetched insanely high prices.
The most expensive wristwatch produced by the Rolex factory was a GMT Ice, which had a retail price of $485,350. At least a couple of Rolex watches have fetched millions of dollars in auctions. A Rolex Data Unicorn went for $5,936,906 in Geneva in 2018, and one year earlier, a Rolex Daytona manufactured in 1968 sold for $17,752,500 (an auction price of $15.5 million plus a 12.5% buyer's premium) in New York City.
That 2017 auction remains the most expensive wristwatch ever sold at auction. And here's some fun trivia: the watch was initially purchased by actress Joanne Woodward and given to her husband, the late actor Paul Newman. Newman gave the watch as a gift to a friend, James Cox; at the time, the watch was selling for about $200. Not a bad ROI!
Who Owns Rolex Today?
Since 1960, The Hans Wilsdorf Foundation has owned and controlled Rolex. The foundation donates a large portion of its income to charity and social causes around Geneva, Switzerland. This decision allows Rolex to have a different business model than most of its competitors. While other watch brands have to worry about impressing shareholders and often must release limited-edition and special models, Rolex can work on improving its current watches, evolving them over time (pun absolutely intended).
While it's unknown how much Rolex has donated to charity over the years, the company's brand value was estimated at $8.053 billion in early 2018. That valuation doesn't include charitable donations, of course, but if the company is worth that much, it's likely made some significant contributions.
So there you have it! For more than 60 years, a private family trust has owned arguably the most recognizable name in watches while operating as a charity.
Read more: You May Be Surprised To Learn Who/What Actually Owns Rolex…
0 Comments