A month ago when the Swiss Franc debacle happened everyone was wondering what the economic effects of this 30% change would be. Everyone saw an immediate impact in the currency markets, but one of Switzerland’s most valuable exports, fine timepieces, was still in limbo. The news of the Swiss Franc changes couldn’t have been timed any better, falling right before the annual SIHH 2015 show in Geneva.
While attending the show there was great amount of buzz about what everyone speculated the major brands would do to compensate for the drastic fluctuation in the market. A few short weeks later Officine Panerai announced price increases of 6% in the European market. The United States market actually ended up on the right end of the announcement seeing a 5% drop in the 2015 Panerai Price List.
Another market that will be seeing a price decrease due to the weakening of the Euro in the aftermath of the events in January, is the Hong Kong boutique. CEO Angelo Bonati recently spoke to the South China Morning post and relayed that they would be lowering the prices by 20% (in HKD).
This announcement coincided with the opening of the newest flagship boutique in Hong Kong which accounts for 20 percent of product sales for the luxury watch brand. This flagship store unlike any other is spread over an 11 floor building on Canton Road, with each floor giving the patron a truly private shopping experience.
Officine Panerai is not the first luxury watchmaker to lower it’s prices in Hong Kong recently. Watchmaking giant, Patek Phillippe recently also reduced their prices by 20% as well. If this is any indication of the trends to come, we expect all the other major brands to slowly follow suit.
Will the market for luxury watches continue to soften due to the shift in currency rates? Only time and sales will tell.