On January 15, local time, just a few days before the start of this year’s Geneva Haute Horlogerie, the SNB unexpectedly announced that it would abandon the lower limit of the exchange rate of 1.2 Swiss francs against the Euro. Edouard Meylan, CEO of Henry Moser, was the first industry leader to respond to this decision, and immediately returned to Zurich after a board meeting in the Swiss Alps. ‘When I heard the news on the radio, I drove off the highway in Interlaken and drafted an open letter.’
Edouard Meylan, CEO of Henry Moser
By the time the Geneva watch unfolded, ‘very rare’ Henry Moser had become ‘a little less rare’, and the world’s major newspapers had published that open letter, Edward May Mr Edouard Meylan found himself screaming on TV and even appeared on local Australian radio programs. During the most difficult period of the year, the global publicity effect caused by an open letter is no less than a gospel for brands, and it is also very helpful to attract consumer interest and stimulate sales.
‘We try to respond more intelligently to this,’ explained Mr Edouard Meylan, who was fully able to understand the Swiss National Bank’s decision, but was angry because he had not received a prior warning and felt that the announcement had been issued at an inappropriate time. .
Impact on consumers
Affected by the sharp appreciation of the Swiss franc, the Euro price of Henri Moore watch products will rise moderately, and the price of the Swiss franc will decrease slightly. As a result, consumers will be more or less affected by the strength of the Swiss franc, and the remaining consequences will be borne by the brand. Accordingly, retailers who have more futures payment for Swiss brands will suffer the delay.
In terms of luxury brands, Jean-Christophe Babin, CEO of Bulgari, also tried to respond more wisely. Just during Geneva’s Haute Horlogerie Week, he announced the ‘Bulgari Protect’ to assist Swiss retailers in countering currency appreciation-maintaining prices for Swiss watch customers and the Swiss National Bank’s abandonment of the Swiss franc against the euro The same level before the lower exchange rate limit.
Taking into account the effects of exchange rate changes, the prices of products in the surrounding Eurozone countries are even cheaper. The purpose of this safeguard measure is to maintain the competitive advantage of Swiss retailers, especially when the Chinese New Year is approaching and a large number of tourists are about to influx. Local Swiss residents no longer need to travel to the border euro zone to buy domestic watches. The implementation of this guarantee means that the price of Bulgari watches and clocks has been reduced by 20% at the point of sale in Switzerland (the brand jewellery is produced in Italy and is therefore not affected by changes in the Swiss franc and the euro exchange rate), which will undoubtedly affect the brand’s sales profit , But has been endorsed by the senior management of LVMH Group, all of Bulgari. At present, other major watchmaking groups and LVMH Group’s other watchmaking brands have not yet, or at least not made public, respond to this.
‘The current market situation is too volatile to judge,’ explains Mr. Jean-Christophe Babin. ‘Maybe soon we will worry about the company’s profits. The price is a double-edged sword in any case. Yes ‘To achieve profitability is of course something we need to consider, but high prices will keep potential customers out.’
In addition to emergency public relations for the two brands, an independent retailer also responded positively during this year’s Haute Horlogerie show. Given the uncertainty of price development in the coming months, the position of the boss of Chronopassion in Paris, France, is particularly clear: ‘Compared to tomorrow, the day after tomorrow, or even longer, buying a clock now is bound to be a smarter decision.’- —