Swiss watchmakers to raise prices after franc increase
Switzerland’s luxury watchmakers are considering raising prices on their timepieces in the eurozone by up to 7% due to the ballooning franc.
Switzerland’s luxury watchmakers are considering raising prices on their timepieces in the eurozone by up to seven percent due to the ballooning franc, but they are in no rush, industry insiders hinted Tuesday.
Watchmakers gathered at a luxury watch show in Geneva this week were eager in public to put on a strong face after the Swiss central bank’s shock decision on Thursday to let the franc float.
“We will find a way to adapt,” said Swiss luxury group Richemont, which counts Cartier and Piaget among its 16 luxury watch brands.
The industry, which exports nearly 95 percent of its pricey products to areas where they are paid for in euros or dollars, is especially exposed to the impact of the swelling franc.
The Swiss central bank stunned the world Thursday by abandoning its bid to hold down the value of the Swiss franc, scrapping the minimum rate of 1.20 francs against the euro. On Tuesday the franc was trading around parity with the European common currency.
If watchmakers adjust their prices to the new reality, the price tag on their goods in countries using the euro would leap 15-20 percent overnight.
Executives from the big brands were reluctant to talk about the issue or to discuss what measures they might be forced to take.
Behind the cover of anonymity, some however acknowledged estimates that prices in the neighbouring eurozone should be raised 5.0-7.0 percent.
But all insisted it was too early to act, and that they would wait and see how the exchange rate evolved.