copied from an italian forum:
List price in 2005 vs list price in 2011
Audemars Piguet
15300 Royal Oak 9.100 -> a 12.450 = +36.8%
A. Lange & Sohne
- Datograph Platino 42.500 -> 63.000 = + 48.5%
IWC
- 5021 perpetual calendar, rose gold €.25.200 -> €. 29.900 = +18,5%
- 5001 portuguese steel €.8.600 -> €.10.300 = +20%
JLC
2501410 Reverso Classique 7.250 -> 9.750 = + 35%
2511110 Reverso Classique 13.250 -> 19.000 = + 44%
2508410 Reverso Classique steel 2.950 -> 4.150 = + 40%
3028420 Reverso Grande GMT 8.700 -> 10.200 = + 17%
2718410 Reverso Duoface 5.750 -> 6.750 = + 17%
7018120 Reverso Quadra Chrono GMT 7.450 -> 9.500 = + 28%
1392420 Master Control 8.750 -> 11.250 = + 28%
1718470 Master Compressor Geographic 7.350 -> 9.400= + 28%
Rolex:
- 16570 4.030 -> 5.385 = +33.5%
- 14060M 3.560 -> 4.970 = + 39.5%
- 116520 6.310 -> 8.870 = + 42.5%
List price in 2008 vs list price in 2011
Omega
Moonwatch 3570.50 2.470 -> 3.400 = + 40%
Patek Philippe
- 4910\10A-001 (twenty4) da 7.100 -> 9.910 = + 39.5%
- 5002J 741.100 -> 922.370 = +24.5%
- 5002P 785.000 -> 972.660 = + 24%
- 5002R 755.500 -> 939.160 = + 24%
- 5130G 24.200 -> 35.930 = + 48.5%
- 5711 13.900 -> 20.280 = + 46%
- 5712\1A 18.300 -> 27.130 = + 48.5%
- 5960P 49.000-> 72.410 = +48%
- 5980\1A 27.300 -> 38.890 = + 46%
- 6000G 15.400 - 22.870 = + 48.5%*
etc..etc..
These prices are in Euro of course but I doubt the trend is different in UK.
Prices are just rocketing, I don't think there is at the moment another good that has has such increase in this short amount of time.
I find these rises just incredible. I would love to understand the rationale behind it as the market forces I see cannot justify it.
One has to wonder if there is a single driving force with others following suit, or if something more sinister is at play.
"Bite my shiny metal ass."
- Bender Bending Rodríguez
In part it's due to exchange rate movements. The Swiss Franc is massively strong against the £, euro and $ at the moment. So much so that the Swiss central bank moved recently to peg the rate of the Swiss Franc against the euro. This changed the rate on the day they did it from approx 1.1 Sw franc per euro to 1.2 Sw franc per euro. So as mentioned in another thread you'd be hoping for around a 10% reduction in shop prices!!!!! :D :D :D
has there been similar rises consistently over the years? At this rate we will need to sell a lung to get a Sekonda
Very interesting post but it's difficult to make some trends (hey it's a slow Friday afternoon...) when the 2005-2011 and 2008-2011 datasets use different manufacturers and models.
Would be nice to have more complete data.
In 2005 i bought a Rolex GMT II, it cost me £2350, in 2011 i bought a Submariner LV-C, it cost me £5660 :shock:
Those submariners were always more expensive :lol:Originally Posted by Argee1977
It's just a matter of time...
Those submariners were always more expensive :lol:
2009 i bought a Sub LV, it was just under 3k if i remember, the day before the price rise that added about 10 or 15%.
That was cheap - they were £2650 in 2004!Those submariners were always more expensive :lol:
2009 i bought a Sub LV, it was just under 3k if i remember, the day before the price rise that added about 10 or 15%.
It's just a matter of time...
That was cheap - they were £2650 in 2004!Those submariners were always more expensive :lol:
2009 i bought a Sub LV, it was just under 3k if i remember, the day before the price rise that added about 10 or 15%.
October 2008 was when i bought it (just checked), the day before a price rise, then another one came in soon after, and the madness started.
Are all the examples specs used exactly the same now as they were though?
Comparison has been made on the same ref number, so I guess so.
Don't think the 14060M has changed a lot in the last....couple of decades...
The price rises are generally worse in the UK. For example, I bought a JLC Master Control in 2008, when the price was £2650. In late 2010 the price reached £4300, a 62% increase. IWC Pilots used to be £2100 at the same time, today they are £3000.
They are incredible rises in some cases, but it's all about supply and demand. If no one bought one, they wouldn't increase the price so dramatically. Demand continues (at least somewhere in the world). Price rises continue.
The reality is that very few people buy a premium brand for anything other than the brand itself. What's the best way of implying you're the best? A nice bit of marketing and continuous price hikes...
Huge demand from China where they actually desire to pay more as a sign of conspicuous consumption will definitely be a factor. I think that I read that more Rolexes are sold in Hong Kong, a city of 7 million people, than the whole of the US, don't know if that is true but it's very plausible for anyone who knows Hong Kong.
regards
siggy
+1 emerging markets including Russia, Brazil, India, this is affecting most luxury goods, Louis Vuitton, BMW, etc
The Rolex Daytona cost 200$ in the early seventies.
That sums it up.
The current price level for swiss luxury mechanical is exploitation of appreciation.
The Swiss are putting their proces at what the market accepts.
Over 2011 they have been hit by the exchange rate but it is their own choice to let the buyers near the brunt and not have it dig into their own HUGE margin.
It again is them stretching the market to the max.
There is nothing complicated about it.
From their side it is business.
From the buyer side it is take it or go elsewhere.
The price rises are not about demand. They are all to do with the hugely high value of the Swiss Franc, which has become something of a currency safe haven for investors. It's costing Swiss companies a massive amount to import raw materials. It's a serious issue for many Swiss businesses and the government has now, rather belatedly, effectively devalued the Franc by pegging it to the Euro, as an earlier poster correctly said.+1 emerging markets including Russia, Brazil, India, this is affecting most luxury goods, Louis Vuitton, BMW, etc
That's a pretty big gouge, especially when you consider the Speedy P has no R&D costs, and little marketing (it's neither a limited-edition nor a co-ax).
But, whatever Omega can do, Breitling can do better:
Superocean 2005: £1,280
Superocean 2011: £2,930
The newer watch is the same, aside from the bezel (which isn't as functional)) and some applied stuff on the dial. But allowing for a 2.5% change because of VAT increases, that's a 126% increase, ladies and gentlemen. 126%.
...but what do I know; I don't even like watches!
I reckon Rolex prices have gone up around 60% in the UK since 2007. A quick look at the price lists confirms this.
The Swiss franc has strengthened vs Sterling by around 70% during this time :shock: ......draw your own conclusions.
I haven`t looked at the figures for Omega, but I recall a SMP 2254.50 costing around £1150 in the UK in 2004. Since then, Omega have unashamedly stated their intent to go upmarket and have also changed over to the co-axial movements on most models; these factors, coupled with the exchange rate effects, are the reasons for Omega's current UK prices.
Not good is it, guys.........not good at all.
Paul
:shock:
and the decision of the Swiss to shrug the effects off.
No, ofcourse not.
It is CHEAPer for them with a more valuable Franc :idea:
So they buy in for less Swiss Francs and sell for the same amount of Swiss Francs = more profit.
The bean counters will closely monitor if the demand keeps them ahead of the game.
these price increases surely can't be sustainable ?
people who baught 5 or 6 years ago must be shaking their heads in disbelief.
I don't think the price increase of raw materials can be a valid explanation in general.
One example:
JLC (2007 vs 2011)
2501410 Reverso Classique gold 7.250 -> 9.750 = + 35%
2508410 Reverso Classique steel 2.950 -> 4.150 = + 40%
is steel more expensive than gold! I WISH!!
Well it is only a fashion so better wring it for what it is worth.
The Swiss industry is now better prepaired, and Swatch best of all, than ever to switch to high end modern tech when the fashion changes as it will.
More fashionable.
With % rises like this all the time, I'll be back to a sundial before long...
Why take one step backwards instead of going forwards?
There is plenty of quality Swiss sharply priced with far more advanced and more accurate technology inside.
The mechanical fashion is not the state of the art :idea:
That comes a lot cheaper oddly enough.
Nah, what you want is a Casio G-Shock. Pick the right model and it will do everything including telling the time... Accurately - and at pocket money prices.
the whole money thing interestes me..
china sells to American and then it is half the price of what you can buy it in America for what you can buy it in the UK..
alot of things I buy in American are say $50 in the UK they sell for £100 both get supplied from China
so I buy from American and ship it to the UK and still save money? been doing it for years.. funny how the world works..
They do it because they can. Start an import business!
I know two neighbouring countries in the EU where one have almost 50% higher prices for some building materials. Did I hear someone say price fixing? Or at least lack of competition.
Its ridiculous really. I cannot help but think that some of these brands will price themselves out of certain areas of the market. Am i dumb or is it better to sell 1000 watches at $2000 or 50 at $10,000? I hope some economist can explain to me why it is so lucrative to eliminate such a high percentage of the population as potential buyers.
I've noticed increases in vintage prices during that time span as well. To make matters worse the pound has strengthened so much versus the dollar, I can hardly afford to buy anything from the UK anymore! Woe is me... :cry:
Luxury goods are aspirational, so need to be priced high in order to maintain desireability. The high price is justified, partly, by the high price - Rolex must be good as the prices are high and people buy them.
I work in supplying packaging for luxury goods and if you think the markup on watches is excessive, look at leathergoods and cosmetics :shock:
Buying is about scale and supply and demand. The reason the US generally pay less for their goods is down to the quantities they buy, which are generally much much greater than the UK, so companies in the states commit to buying 1m v UK company buying 100k.
Another good example of this is Apple. The reason why they are so successful and make unusually large profit margins compared to other consumer electronics companies is scale. They commit to 10m screens for an iPad for example, so they get the best price, they then invest some of that cost saving into marketing the hell out of a product to ensure they sell the 10m units. But they are prepared to take a risk and of course if the product didn't sell they'd be stuck!
When it comes to watches it is supply and demand and there is still a massive demand for luxury watches in emerging markets and people are prepared to pay whatever it takes as they have the money!
If it is the strong Swiss currency, why does Lange have the highest raise? Gold price has of course been in strong climb so that probably affects the pricier watches. That Moonwatch price hike is just ridiculous :?
I went to Piaget the other day and was shocked at how much the Magic Hour watch had increased over a 2 year period. Back then, it the price was around 11k pounds. A few days ago, the best possible price they could give me was 18k pounds.
Looking in an AD today there were 2 identical looking Omega PO's. One was £2800 and the other £3800, the dealer explained that the more expensive one was a newer model with the liquid metal insert. Sorry I didn't get the exact model numbers but I was shocked at the price difference.
It's not that the prices are going up but the value of 'your' money that is going down. Recently the Swiss pegged their franc to the euro so things should stabilize for a while but don't bet on it.
john
Every watch a story.
It's a range of factors including raw material costs, shipping costs and currency however the overriding factor here, as with all things economic, is supply and demand.
Suddenly the emerging markets are buying the traditionally Western status symbols (electronics, watches, cars) and the demand>supply.
If you were Rolex and you sold 600-700k watches per year with margin x, then increased margin to x+y but didn't see your sales numbers drop what do you think the next step is? x+y+z
Very, very simple.
The reason is that although a higher price reduces sales and revenue, the reduced output is sold for more per unit which increases revenue. As long as the latter effect outweighs the former, a profit-maximising monopolist will increase price.
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