http://www.cnbc.com/id/102341460

Sounds like the watchmakers might get the hurt put on them...

 

I wonder if this will shift even more early manufacturing to the far east.

 

Not being an economist, I wonder what the effects will be. Will prices go up as the Swiss Franc strengthens? Or will watchmakers, given weakening demand and slower sales in 2014, keep prices stable? What do people think?

 

I think my exports from the US will increase

 

Prices will ultimately rise, how much anyone knows.

 

Wasn't the Swiss Franc capped only against the Euro? Leaving £ Sterling, Dollar etc relatively unaffected by this action and only open to the usual currency fluctuations which I would have thought that Swatch etc would hedge anyway

 

I don't like that they capped it to begin with. Now we get to watch a more violent correction as opposed to the natural course of things.

The CHF was gaining ground above the USD for some time before the cap, so the cap helped the strength of the USD. Since the USD was strengthening against the Euro, USD purchasing power was increasing in Switzerland as well. I'm sure the SNB wanted to break away from the weakening Euro and get back to normal. Of course, things will correct. Swiss citizens will look to neighboring countries for goods that can be bought with their increased purchasing power, bringing cash to those countries as well as out of the Swiss economy. Who knows how long it will take, but this immediate jump will normalize. Also, I am not an economist, just using logic.

 

Given the increase on retail price and value of Omega in particular and Luxury watches in general on the last 5 to 10 years I would say this post is long overdue. If they can of course they will rise prices, why wouldn't they? they are geared to a luxury market that feels economical recessions a little less than most.

They could not rise prices as their markup is huge, Just the fact that grey market is consistently 20% under and still mark a profit is on itself telling. So the question is not if they ave to or will, but how much is strategically too much because Omega is scratching a ceiling there, even though they are at least had at work on advances and developments a lot of them are more reflective of SWATCH group strategies than on consistency. It is very SWATCH to focus on "now let's do orange, or green, or grey, or zebra, or glossy with bands, without bands etc. At least though we get the movements etc coming along but loosing a little of the elegance of the vintage dress models.

 

At least in the US, the dollar is now worth 15% less compared to the Swiss Franc than it was before this "course correction." Whether that number holds remains to be seen.

And you are spot on that Omega could absorb that 15% loss and still be quite profitable. I actually think that they would be wise to take the haircut and not pass it on to their consumers as I am willing to bet dollars to donuts that Rolex will indeed implement a hefty price increase to the point a SS sports model will hit the $10K mark.

From a pure numbers standpoint, if we are being perfectly honest, Omega has been chasing the Crown ever since it woke up from its bad dream known as the 80s and 90s. Tag has realized its pricing errors of late and is going down market so if they go down, Rolex goes up and Omega stays where its at, it could be well positioned in that $6-9K market where to me it's a clear winner.

 

sorry. Low Euro = imports to US high.

 

Just read an article to say Swatch Group are increasing prices from between 5 - 15% dependant on brand. Anybody else heard anything?

http://wornandwound.com/2015/01/27/speaking-francly/

 

It is true

 

http://www.wsj.com/articles/watchmaker-swatch-announces-price-rises-1421932964

 

The franc was pegged against the Euro which means its fluctuations were directly tied to the Euro. Its relationship to other currencies then too mirrored what the Euro was doing against those currencies. When they removed the peg, the franc was allowed to trade freely against other currencies which lead to its spike against all other currencies. The majority of this was due to the Euro's recent decline.

 

I'm glad I bought ahead..of course no one can really foresee but it was inevitable. If the plan to eliminate middle men or dealers goes ahead as planned , then prices will rise even more. At the end it may give everyone pause, at least to me, that as much desirable a speedy pro is, and it's history and all, it all comes down to a reality that it is just a time piece. I would not hesitate to pay top dollar for a legend like the speedy pro or seamaster and other similar but all others may give me pause. Like the Rolex Commercial with Roger Federer said, it's not just a watch , it's history.

 

I agree with you 100%

 

People who have been saving up for that special occasion coming up a few months later need to cough up more..