SINGAPORE (Reuters Life!) - Suffering from recession blues and looking to offload that new Rolex watch?
Don’t turn to us, say second-hand luxury stores in Singapore, who are being swamped with requests from people desperate to sell their luxury goods.
Traditionally resilient during times of economic downturn, more than 70 second hand shops in the city-state are feeling the chill of recession, as the appetite for expensive goods has fallen sharply despite big discounts.
“Rolex prices have been like a reliable currency in the past, but there are signs that even Rolex is hit by this recession wave,” said Ngo Han, an avid watch collector.
“New Rolexes are selling at much lower prices than before and that has trickled down to the second-hand market,” Ngo said.
Home to the highest density of millionaires in the world, Singapore is a wealth management center and a shopping destination for the region’s wealthy.
Second-hand stores that stock luxury goods, such as brand name bags and flatscreen televisions, experienced a boom in the past few years, as rising incomes and the need to upgrade to keep up with fast-changing fashions created a fertile secondary market for designer wares.
But with the city-state becoming the first Asian country to slip into recession this year, customers are changing their habits.
Where once they would have bought Rolexes or Patek Philippes that can cost over S$10,000, (about $6,775), they now opt for models that cost under S$5,000, (about $3,390), shop owners said.
“Business has gone down about 20 to 30 percent. The interest to buy watches is still there, but whether people can afford to buy is another thing,” said Alvin Lye of Monster-Time.
His online store, www.monster-time.com, carries second hand watches from Breitling, Audemars Piguet, Cartier and Longines.
During lunch hour in Singapore’s financial district, people fill up May Fong’s second-hand luxury bag store, but few are buying, even with many of the bags going at a 50 percent discount.
“There is definitely a drop in business. People are more conscious (of their) spending, even if it’s a bargain,” Fong said.
Shops that rent, rather than sell, designer goods, are however reporting a spike in rentals despite the recession, suggesting some locals are still keen to get glamorous goods, albeit temporarily.
"New bags are leased out within seconds (of being) posted on the website," ex-policeman Tan Ho Ching, who rents out designer bags for about S$125 a week via his online store www.thatbagiwant.com, told local press on Sunday.
The recession’s impact on workers whose salaries are commission-based, such as property agents, could be a likely explanation for the drop-off in sales.
“These people tend to earn much more during the boom times, and they are also likely to make up a significant portion of the consumers for these luxury goods,” said Alvin Liew, an economist with Standard Chartered in Singapore.
However, some watch enthusiasts said they were holding onto their horological investments, keen to turn a profit once the recession lifts.
A recent Reuters poll said Singapore would be the worst performing emerging Asian economy next year, but would see a recovery together with the rest of the region in 2010 [ID:nHKG10473].
"Watches are better to keep and are better than cash in a recession. They won't drop in value, and after a recession, the value is still there or more," said collector Yeo on online watch forum www.swx.com.sg.
Editing by Neil Chatterjee and Gillian Murdoch