Swatch Group Announces Fall in Sales for 1st half
- rockmastermike
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Swatch Group Announces Fall in Sales for 1st half
Copied from the boys over at PuristPro.
Last paragraph sounds familiar
Swatch has reported falling sales and profits.Nett income fell 11% to 415m Swiss francs (£340m; $420m) in the first half. Sales fell 4.4%.
Swatch has tried to stop the flow of unofficial sales of its watches and sales have been hit by political trouble in one of its most important markets, Hong Kong.
Swatch has been taking action this year to stop its watches being sold at steep discounts online and has stopped supplying some dealers completely and some have been warned about their activities.The crackdown had cost it more than 100m Swiss francs in sales, but Swatch said it would have long-term benefits.In particular the company is worried that its brand was being devalued, as unauthorised retailers were selling its watches at deep discounts.
Last paragraph sounds familiar
Swatch has reported falling sales and profits.Nett income fell 11% to 415m Swiss francs (£340m; $420m) in the first half. Sales fell 4.4%.
Swatch has tried to stop the flow of unofficial sales of its watches and sales have been hit by political trouble in one of its most important markets, Hong Kong.
Swatch has been taking action this year to stop its watches being sold at steep discounts online and has stopped supplying some dealers completely and some have been warned about their activities.The crackdown had cost it more than 100m Swiss francs in sales, but Swatch said it would have long-term benefits.In particular the company is worried that its brand was being devalued, as unauthorised retailers were selling its watches at deep discounts.
Re: Swatch Group Announces Fall in Sales for 1st half
A quick search on Jomashop shows that they are not being very successful.
- JP Chestnut
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Re: Swatch Group Announces Fall in Sales for 1st half
Falling sales? Keep raising prices and get rid of discounts!
The watch industry is a study of brilliant management. All Rolex has to do is not fuck up and they win by default.
The watch industry is a study of brilliant management. All Rolex has to do is not fuck up and they win by default.
Re: Swatch Group Announces Fall in Sales for 1st half
No doubt a policy change takes time to reach the end of the line retailer. I think it’s a good thing to continue their efforts to push upmarket. The latest Omega watches I’ve handled are extremely well done.pbj204 wrote:A quick search on Jomashop shows that they are not being very successful.
Re: Swatch Group Announces Fall in Sales for 1st half
I don't know about the continued push up market. It works for Rolex because they're Rolex (and if it remains impossible to get desirable models, even Rolex may take a hit). Nobody else has that luxury, so I wonder if they're going to continue to suffer if they push their prices up.
- JP Chestnut
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Re: Swatch Group Announces Fall in Sales for 1st half
It's been a long time since Rolex has raised US prices. Omega has actually moved more than Rolex has over the last few years. There's no doubt that Omega watches are really really nicely made. However, they're going to lose if they want to move beyond "Rolex alternative but cheaper".JBZ wrote: ↑Wed Jul 17, 2019 8:12 amI don't know about the continued push up market. It works for Rolex because they're Rolex (and if it remains impossible to get desirable models, even Rolex may take a hit). Nobody else has that luxury, so I wonder if they're going to continue to suffer if they push their prices up.
Re: Swatch Group Announces Fall in Sales for 1st half
Actually I don’t think Omega raised retail prices as much as they raised dealer prices, eliminating some of the margin that allowed for those 25-35% discounts. A good strategy to improve “perceived image” is to eliminate deep discounts. I don’t advocate for raising retail prices.JP Chestnut wrote:It's been a long time since Rolex has raised US prices. Omega has actually moved more than Rolex has over the last few years. There's no doubt that Omega watches are really really nicely made. However, they're going to lose if they want to move beyond "Rolex alternative but cheaper".JBZ wrote: ↑Wed Jul 17, 2019 8:12 amI don't know about the continued push up market. It works for Rolex because they're Rolex (and if it remains impossible to get desirable models, even Rolex may take a hit). Nobody else has that luxury, so I wonder if they're going to continue to suffer if they push their prices up.
Re: Swatch Group Announces Fall in Sales for 1st half
From a quality perspective, Omega is certainly on par with Rolex. But that doesn't matter when the general public sees Rolex as THE luxury watch to have. If Omega keeps pushing up its prices, it will reduce its sales, at least in the short term. Maybe their business model is designed for that or can absorb it. And maybe Swatch will push entry level consumers toward brands like Longines, Hamilton, and the like. But I wonder what it says about the viability of middle market luxury brand like Omega (and, yes, I know it's ridiculous to call Omega middle market, but that's what it is when compared to the true high end brands). And, by pushing up their prices, won't Omega come into direct competition with Swatch's higher end brands like Breguet and Blancpain?JP Chestnut wrote: ↑Wed Jul 17, 2019 8:23 amIt's been a long time since Rolex has raised US prices. Omega has actually moved more than Rolex has over the last few years. There's no doubt that Omega watches are really really nicely made. However, they're going to lose if they want to move beyond "Rolex alternative but cheaper".JBZ wrote: ↑Wed Jul 17, 2019 8:12 amI don't know about the continued push up market. It works for Rolex because they're Rolex (and if it remains impossible to get desirable models, even Rolex may take a hit). Nobody else has that luxury, so I wonder if they're going to continue to suffer if they push their prices up.
Re: Swatch Group Announces Fall in Sales for 1st half
It seems like it's really tricky. Certainly any brand wants their watches out in the general public, but I guess the question is what's the right balance between exclusivity and ubiquity.hoppyjr wrote: ↑Wed Jul 17, 2019 8:34 amActually I don’t think Omega raised retail prices as much as they raised dealer prices, eliminating some of the margin that allowed for those 25-35% discounts. A good strategy to improve “perceived image” is to eliminate deep discounts. I don’t advocate for raising retail prices.JP Chestnut wrote:It's been a long time since Rolex has raised US prices. Omega has actually moved more than Rolex has over the last few years. There's no doubt that Omega watches are really really nicely made. However, they're going to lose if they want to move beyond "Rolex alternative but cheaper".JBZ wrote: ↑Wed Jul 17, 2019 8:12 amI don't know about the continued push up market. It works for Rolex because they're Rolex (and if it remains impossible to get desirable models, even Rolex may take a hit). Nobody else has that luxury, so I wonder if they're going to continue to suffer if they push their prices up.
Re: Swatch Group Announces Fall in Sales for 1st half
A few days ago, I went to the local OB to pick up a replacement for a broken clasp. During the time I was there, about a half hour, not a single customer came in. Granted, it was a Monday afternoon, but there were three sales associates standing around trying not to look bored while the manager was in the back installing the new clasp.
No, it's not Tourettes.
- JP Chestnut
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Re: Swatch Group Announces Fall in Sales for 1st half
I'm sure you follow their pricing more than I do, but I was thinking about the price path of the regular Speedy Pro. New box + same bracelet but with screws = how much of a percentage increase? It was pretty substantial.hoppyjr wrote: ↑Wed Jul 17, 2019 8:34 amActually I don’t think Omega raised retail prices as much as they raised dealer prices, eliminating some of the margin that allowed for those 25-35% discounts. A good strategy to improve “perceived image” is to eliminate deep discounts. I don’t advocate for raising retail prices.JP Chestnut wrote:It's been a long time since Rolex has raised US prices. Omega has actually moved more than Rolex has over the last few years. There's no doubt that Omega watches are really really nicely made. However, they're going to lose if they want to move beyond "Rolex alternative but cheaper".JBZ wrote: ↑Wed Jul 17, 2019 8:12 amI don't know about the continued push up market. It works for Rolex because they're Rolex (and if it remains impossible to get desirable models, even Rolex may take a hit). Nobody else has that luxury, so I wonder if they're going to continue to suffer if they push their prices up.
You're right though, I was implicitly comparing "street price" Omega versus MSRP Rolex. The alternate comparison (MSRP Omega versus inflated Rolex) looks a lot better for Omega.
Re: Swatch Group Announces Fall in Sales for 1st half
Speedy Pro price is a tough metric to gauge the brand's strategy on, as it is extremely unique being a luxury good that is virtually unchanged for the past 50 years - with the exception of a few pieces of the movement and the bracelet design.JP Chestnut wrote: ↑Wed Jul 17, 2019 8:49 amI'm sure you follow their pricing more than I do, but I was thinking about the price path of the regular Speedy Pro. New box + same bracelet but with screws = how much of a percentage increase? It was pretty substantial.hoppyjr wrote: ↑Wed Jul 17, 2019 8:34 amActually I don’t think Omega raised retail prices as much as they raised dealer prices, eliminating some of the margin that allowed for those 25-35% discounts. A good strategy to improve “perceived image” is to eliminate deep discounts. I don’t advocate for raising retail prices.JP Chestnut wrote:It's been a long time since Rolex has raised US prices. Omega has actually moved more than Rolex has over the last few years. There's no doubt that Omega watches are really really nicely made. However, they're going to lose if they want to move beyond "Rolex alternative but cheaper".JBZ wrote: ↑Wed Jul 17, 2019 8:12 amI don't know about the continued push up market. It works for Rolex because they're Rolex (and if it remains impossible to get desirable models, even Rolex may take a hit). Nobody else has that luxury, so I wonder if they're going to continue to suffer if they push their prices up.
You're right though, I was implicitly comparing "street price" Omega versus MSRP Rolex. The alternate comparison (MSRP Omega versus inflated Rolex) looks a lot better for Omega.
- JP Chestnut
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Re: Swatch Group Announces Fall in Sales for 1st half
That's precisely why I think it's the best product to look it. It has almost zero confounding effects. The price rise is almost 100% due to their brand strategy, unless we actually think a stupid big box and some bracelet screws really amount to more than a couple bucks a unit to Omega.dnslater wrote: ↑Wed Jul 17, 2019 9:35 amSpeedy Pro price is a tough metric to gauge the brand's strategy on, as it is extremely unique being a luxury good that is virtually unchanged for the past 50 years - with the exception of a few pieces of the movement and the bracelet design.JP Chestnut wrote: ↑Wed Jul 17, 2019 8:49 amI'm sure you follow their pricing more than I do, but I was thinking about the price path of the regular Speedy Pro. New box + same bracelet but with screws = how much of a percentage increase? It was pretty substantial.hoppyjr wrote: ↑Wed Jul 17, 2019 8:34 amActually I don’t think Omega raised retail prices as much as they raised dealer prices, eliminating some of the margin that allowed for those 25-35% discounts. A good strategy to improve “perceived image” is to eliminate deep discounts. I don’t advocate for raising retail prices.JP Chestnut wrote:It's been a long time since Rolex has raised US prices. Omega has actually moved more than Rolex has over the last few years. There's no doubt that Omega watches are really really nicely made. However, they're going to lose if they want to move beyond "Rolex alternative but cheaper".JBZ wrote: ↑Wed Jul 17, 2019 8:12 amI don't know about the continued push up market. It works for Rolex because they're Rolex (and if it remains impossible to get desirable models, even Rolex may take a hit). Nobody else has that luxury, so I wonder if they're going to continue to suffer if they push their prices up.
You're right though, I was implicitly comparing "street price" Omega versus MSRP Rolex. The alternate comparison (MSRP Omega versus inflated Rolex) looks a lot better for Omega.
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