International Swiss watchmaking conglomerate Swatch Group has confirmed that prices for at least six of its brands will increase by 5% in the UK according to a recent WatchPro news report. The price adjustment is due to take place starting March 1st, 2017, and follows the pound’s recent 15% loss in value against the Swiss franc. This is the first price increase we’ve seen since the Brexit decision in June of last year and it presents yet another unexpected economic development for an industry that seems to be increasingly fragile.
According to the briefing received by WatchPro, Swatch Group’s headquarters confirmed that “Omega, Longines, Rado, Tissot, Hamilton, and Certina will increase their prices by around 5% from March 1st.” While price hikes are typical for this industry, Swatch has managed to hold out a bit longer than its competitors. Just recently companies like Rolex along with LVMH and Richemont brands increased their own prices in response to the recent economic shift.
When it comes to James Bond wristwatch market results, Omega Seamaster Planet Oceans hold the top two locations. The top watch, used in the filming of Casino Royale, offered in the 2007 Antiquorum OmegaMania auction for CHF 250,250. The film recorded the assignment with the unlucky number that has been cut short by an explosion that deprived the spacecraft of the majority of its oxygen supply and electrical power. The film accurately portrays the astronauts sporting Omega Speedmasters, and the essential role the Speedmaster played in getting the team back to Earth. On account of the collapse of an onboard electrical timer, the astronauts relied upon their Speedmasters to time critical burns (powering engines off and on). These burns had to be precisely the correct duration to acquire the spacecraft pointed at precisely the correct direction so that it might enter the air without bouncing off or burning. The Speedmasters performed flawlessly, and the astronauts made it home safely.Official new ambassadors aside, Omega has proven a favorite of several world leaders and celebrities. Soviet President Mikhail Gorbachev was frequently photographed wearing his golden Constellation Manhattan. From the above 1995 movie My Fellow Americans, Jack Lemmon plays a former American President. At one point, Lemmon opinions on his watch, saying “That’s a Constellation. It was given to me personally Gorbachev!”
It’s true that, at face value, a 5% increase limited to a specific territory might not seem like something to be too concerned about. However, Swatch has made it clear that these adjustments are becoming necessary and their recent announcements last fall referencing price hikes for ETA movements serve as clear evidence that these adjustments may be coming more frequently.
While it can also appear to be an overall parent company ruling, Swatch is insisting that the move was based on decisions taken by each individual brand. As of now, there hasn’t been any mention of additional brands intending to take part in the increase, but Swatch headquarters stressed that any future price adjustment decisions would be communicated well in advance.
One factor that can’t be ignored is the pressure these price changes put on UK retailers. They make it increasingly difficult to compete against American, European, and Asian retailers while setting a generally uncertain tone within the industry overall. But with a financial environment as delicate as the Swiss watch industry, it’s evident that massive changes like the UK’s withdrawal from the European Union are sure to create consequences for brands, retailers, and most certainly, buyers.
As mentioned previously, these price increases will, for the time being, only apply to the six brands specified earlier. In a time when value proposition regarding pricing and quality is quickly climbing to the top of the priority list for most buyers, a 5% increase such as this could be detrimental for a great number of enthusiasts. This is especially true considering that several of the brands affected are generally regarded as more popular budget-friendly brands. As with most major adjustments, only time will tell if the there will be negative effects in the long run but price hikes during a time of economic fragility within the industry can only serve to make things a little more bleak. swatchgroup.com