Swiss watchmaker Richemont has destroyed nearly $580 million worth of its own expensive watches over the past two years. The company bought back unsold watches off the shelf just so that it could reduce the stockpile. Richard Lepeu, former chief executive of Richemont described this action as an “exceptional measure” in “exceptional circumstances”.
The company took such an action after its watches started stockpiling in Asian markets after corruption crackdown in China which saw gifting expensive watches as a way of bribing government officials. Richemont feared that the unsold stock would eventually land up in the grey market at a discount which in turn would damage the image and pricing power of its brands like Cartier and Montblanc. The destroyed watches are in reality not decimated, but they are disassembled and its parts are recycled and reused. However, this news is untimely since the watch market, in general, is recovering from the slump no matter even this proves better in long term.