Pepsi, Coke and Milgauss: Watches & Wonders Will Be a Turning Point for the Market
Pepsi and Milgauss are among the few watches to perform well in the secondary market, let's find out why
For several months now, the secondary market for watches has been in a downtrend, with prices in the last period experiencing a decline that, although it is on negative percentages quite different from the spring 2022 collapse, has been going on for almost a year.
To understand how the market is moving it is always important to understand how Rolexes are doing, this is because they are by far the most traded watches and consequently are the first to be affected (or benefit) from any changes in supply and demand levels by collectors and sellers.
As can be seen from our Rolex35 index, which contains the 35 most popular and most traded models on the secondary market, the performance of the crowned maison has been essentially flat over the past year. In 12 months the price has gone from €26,563 (February 2023) to €25,293 (February 2024), losing only €1,270 (-5%).
Scrolling through the various watches that make up this index, we cannot help but notice a multitude of watches with negative performances of what percentage point: the Daytona 116500LN (white dial) over the past year has dropped -3.86%, the Sumbariner Date 126610LV by -6.79%, the GMT Batman 126710BLNR by -4.04%, and many more with similar returns. Breaking this pattern that has become rather monotonous, however, are two models that have also been growing rather significantly in recent months, and they are the Milgauss and the GMT Pepsi.
Rolex Milgauss
The Milgauss was one of the great losses of Watches & Wonders 2023, in April last year in fact Rolex decided to discontinue the last reference of this historic model that had been in production since 2007, one of the longest-lived in the modern era of the maison. Last year's fair thus left us orphaned of one of Rolex's most historic models, first launched in 1956, but also one of the most distinctive models thanks to its green glass and its lightning bold seconds hand.
It had never been too popular in the marketplace, but since it was discontinued this model has been experiencing rather interesting growth, even bucking the performance of most Rolexes. When it was discontinued, the reference 116400GV with a black dial jumped considerably, from €10,473 in April 2023 to €11,225 in May 2023, gaining +7% in one month. There is also a bit of speculation in this sudden growth, and this can be seen by noting that during the following months the price slightly decreased from that peak. However, the value has always remained fairly stable, which is an indication that more and more people are choosing this reference because they are attracted to a model with history, special features, and that it is out of production. As can be seen from the graph, over the past year this timepiece has grown by +5.86% from €10,490 to €11,070.
For all that we have said, it seems strange that Rolex would want to deprive itself of such a reference for a long time, which is why our friends at Monochrome have created a mockup of what a new reference might look like if the maison decides to put the Milgauss back into production at Watches & Wonders 2024.
As Monochrome explains, given the discontinuation of the existing model, the industry's emphasis on magnetic properties, and the makeover of its sibling timepiece, the Air King, we anticipate Rolex reintroducing its scientific watch this year. Envisioning a design that seamlessly merges elements from the recent Air King and the timeless attributes of the Milgauss, we picture a watch housed within a 40mm case featuring newly introduced crown guards for a cohesive aesthetic. Retaining signature elements such as the lightning-shaped central hand and subtle orange accents on the minute track, the dial would exude a refined simplicity. In terms of movement, we anticipate leveraging the latest 32xx generation, tweaked for enhanced anti-magnetic properties and likely obtaining a Master Chronometer certification. This strategic move would align Rolex with industry leaders like Tudor and Omega, known for their exceptional magnetic resistance capabilities. Furthermore, we anticipate a slimmer profile, eliminating the need for an inner Faraday cage. However, our proposition takes it a step further: What if Rolex pursued unprecedented levels of magnetic resistance? Rather than settling for the limitations of current certifications, what if Rolex engineered a movement completely impervious to magnetism? Leveraging their renowned R&D capabilities, Rolex could potentially develop a groundbreaking AMAGNETIC movement, utilizing innovative materials like silicon and non-ferrous components. This bold vision could redefine industry standards and be proudly displayed on the dial of the speculated 2024 Rolex Milgauss 126400.
We will see if this insight can become reality as early as the next few months or we will have to wait another few years before we see a Milgauss in production again.
Rolex GMT Master II 126710BLRO
The Rolex that has been making waves the most lately is definitely the Pepsi. This is because for months rumors have been circulating on forums that the failure rate in the production of the iconic blue and red 24-hour GMT bezel is so high that Rolex intends to eliminate the watch from its catalog as early as next year. The news seems to be supported by the decrease in the number of pieces arriving on the secondary market, which could consequently confirm a probable decline in sales at official retailers and the problem related to the production of this watch.
In addition to this is the news this week that Rolex has filed a patent to create a red and black ceramic bezel. The patent, filed in 2022, was published late last month. This new process seems to have succeeded in solving the problems with the color combination on the bezel, making it even more robust. However, from the sounds of this news, the blue/red color combination seems to be impossible to produce with the new patent.
This makes Pepsi's exit at Watch & Wonders 2024 seem increasingly likely, and the market seems quite shaken about it. The increase in the market price since August 2023, which has again brought the value above €20,000, may be another indication of what is happening. Since the summer, the price does not seem to want to stop, now reaching €21,196 with an 8% increase in the last six months.
It is a situation quite similar to what happened a few have with the Submariner Hulk. In September 2020 Rolex was going to unveil some news, and already for a few months rumors had been growing about a possible production exit of the Hulk. These rumors caused the price to rise significantly, which from May 2020 to August 2020 went from €13,900 to €15,500 marking a +12% increase. When then actually the maison launched the reference 126610LV, the price continued to grow so much until 2022.
It seems really strange to imagine a GMT collection without the red and blue bezel configuration, a must for Rolex. On the other hand, however, we are very curious to see the return of the Coke with the new ceramic case and bezel.
As every year, Watches & Wonders is crucial to the fate of the secondary market, between new references and models going out of production, prices are radically affected by this news. This year, however, against a backdrop of slight declines in almost all watches, this event plays an even more important role because it is the only factor that can change the returns of these timepieces, just as is happening with Milgauss and Pepsi.
