15 Things You Didn’t Know About Rolex
Rolex is seen as the most iconic luxury watch brand in the world, known for its opulent timepieces. The company was founded 112 years ago in 1905 by Hans Wilsdorf and Alfred Davis in London, not Geneva as many believe. Currently, Rolex is privately owned by the Hans Wilsdorf Foundation and has become an $8.8 billion brand. In the last year, it generated nearly $5 billion in sales, ranking 64th on the list of the world’s most valuable brands. The article aims to share 15 lesser-known facts about Rolex and emphasizes the brand’s importance in the luxury market. So let’s know.
1) The Rolex name was chosen for its resonance and ease of pronunciation in various languages. Hans Wilsdorf, one of the founders, wanted a short, appealing name that could look good on a watch, leading him to create many combinations of letters until he selected “Rolex,” which does not stand for anything specific but sounds luxurious.
2) Rolex’s relocation from London to Geneva was not due to its reputation for quality watchmaking but rather for financial reasons. The company started in 1905, and by 1919, it left London to avoid rising import taxes. Switzerland was an ideal location due to its skilled workforce and tax benefits, as it has long been considered a tax haven.
3) Interestingly, Rolex is registered as a charity in Switzerland. The company is owned by the Hans Wilsdorf Foundation, established in 1944 after Wilsdorf’s wife passed away. All shares of Rolex were transferred to this foundation, which does not have to publicly disclose its activities or donations due to Swiss law. The foundation’s intent was to ensure Rolex’s survival as Wilsdorf had no heirs. Consequently, Rolex operates without traditional owners or shareholders, and the employees are well-compensated. This allows the company to reinvest its profits and focus on quality without pressure to meet shareholder expectations.
4) It takes nearly a year to produce a single Rolex watch, which is a significant factor in its high price. Each watch is handmade and undergoes rigorous quality testing, although some parts are produced by machines when they yield better results than human craftsmanship. Rolex’s commitment to quality is evident in the extensive testing each watch undergoes, aligning with the company’s tradition of excellence that has made the brand highly sought after by enthusiasts.
5) The most expensive Rolex watch is the 1958 Rolex GMT Master, which sold for $3.5 million at auction. Made of 18-karat gold, its unique features, including a rare bakelite cognac brown bezel, contribute to its high value. This particular model is distinguished further by its presence in original, unrestored condition for 58 years. Rolex operates its own private gold foundry and has developed unique blends of gold and specific steel compounds, emphasizing its commitment to quality manufacture. This watch’s unique attributes make it a coveted item among collectors, despite it not ranking among the ten most expensive watches in the world.
6) The cheapest Rolex watch is the Air King, which costs $2,200. This model is simpler than other Rolex watches but still attracts attention. Rolex watches were originally more affordable; for example, in 1981, a luxury Rolex was $900, but by the end of the decade, the price had risen to $2,350 with minimal changes. Today, entry-level Rolex watches range from about $8,000 to $10,000. For those interested in purchasing, you can find a decent collection of Rolex watches at alux.com/shop.
7) The first waterproof wristwatch, the Rolex Oyster, was created in 1926. This watch was not only waterproof but also dustproof, setting the standard for future designs. The term “Oyster” is still used today for various waterproof Rolex models. A notable moment occurred when Mercedes Gleit, the first British woman to swim the English Channel, received a Rolex Oyster from the founder of Rolex, Hans Wilsdorf, to wear during her swim. Gleit wore the watch around her neck. When rescued after ten hours in cold water, the inside of the watch remained completely dry, showcasing its waterproof capabilities.
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8) Rolex also became the first wristwatch to obtain a Class A chronometer certificate. This certification, earned on July 15, 1914, marked Rolex’s commitment to accuracy and precision. The watch that received this certificate was a small model from Rolex’s London days. Rolex has established strict quality control, ensuring that every watch undergoes 15 days and nights of testing before delivery. Each Rolex watch is also designed to meet a high standard of accuracy. In 2016, Rolex set an even higher standard by requiring that all its watches maintain a daily error margin of plus or minus two seconds, which is significantly better than the typical luxury watch standard.
9) Rolex has demonstrated that its watches perform well in extreme conditions. After World War II, its reputation grew following an expedition by Sir Edmund Hillary, who wore a Rolex while becoming the first to reach the top of Mount Everest in 1953. The harsh environment did not cause the watches to malfunction or lose time. In 1960, the US Navy tested a special submarine in the Mariana Trench, the deepest part of the ocean. A Rolex was attached to the outside of this submarine, and it functioned flawlessly under immense pressure. This success was repeated in 2012 when a Rolex was part of the Deep Sea Challenge expedition led by filmmaker James Cameron. The watch was attached to the submarine and operated via a robotic arm, again proving its durability.
10) To determine if a Rolex is fake, it’s essential to avoid buying replicas and only go for authentic watches. If a Rolex sells for less than $1,000, it’s likely fake. There are three areas where watches are sold: the white area (authorized dealers), the gray area (unauthorized sellers), and the black area (sellers of fakes). Most gray sellers are few and require a trained expert to verify authenticity when they’re not authorized.
To identify a fake Rolex, first check the second hand — real Rolex watches move smoothly without ticking. Next, examine the Cyclops lens: it magnifies the date, while fakes usually do not. Look closely at the watch’s finish; genuine Rolexes are made with high-quality materials. Authentic pieces should have a serial number where the strap connects. Starting from 2000, Rolex models have a very subtle crown logo at 6:00 that’s hard to replicate due to the high-quality glass used.
11) Rolex once lost nearly $1 billion after investing in Bernie Madoff’s Ponzi scheme. In 2008, Hans Vilsdorf Foundation CEO Patrick Heineer stepped down due to personal reasons. It turned out Rolex had invested in Madoff’s fraudulent fund, despite the company’s denial. Following Madoff’s arrest and imprisonment, his Rolex collection was auctioned but only fetched $600,000.
12) In another case, a Rolex helped solve a murder in Canada. Albert Walker Johnson, a scam artist, killed Ronald Joseph Platt after assuming his identity. Johnson dumped Platt’s body in the English Channel but left the Rolex on, which helped police identify the body weeks later. Johnson was captured and is now serving a life sentence.
13) Rolex is also the official timekeeper for the Wimbledon tournament, having held this title since 1978, signifying a continuous partnership in pursuit of excellence. Roger Federer, the greatest tennis player, is one of their top ambassadors, earning $15 million a year for his endorsement.
14) Rolex has a profit margin of over 60% on their watches. While the cost of raw materials for a Rolex is low compared to its selling price, this does not mean the price is unjustified. Buyers are not just paying for the materials; they are paying for innovation, heritage, and expert craftsmanship that has taken years to develop. The watchmaker’s skill and time are significant factors in the price.
For example, a $10,000 Rolex has a breakdown where the manufacturer builds it for $3,000 and sells it for $6,500, making a profit of $3,500, or 54%. The dealer then sells it for $10,000 after adding $1,000 in costs, resulting in a profit of $2,500, or 25%. Overall, the total profit generated in this chain is around $6,000 for a $10,000 watch.
15) The most expensive Rolex available directly from the manufacturer is the Rolex GMT Master 2 men’s diamond ice watch, priced at just over half a million dollars. This watch is covered in diamonds, attracting buyers despite its high cost. Celebrity figures like Brad Pitt and David Beckham are among those who have purchased such luxury items to enhance their style.
