Watchmaking giant Patek Philippe has decided to increase the price of watches in the UK market by 5.5%. Local retailers have received news last week that the new price list will take effect on September 1. It is reported that the main reason for Patek Philippe to increase the price of its products is the continued weakness of the British pound since the Brexit referendum.
Patek Philippe Ref. 5320G_001 watch
In the latest financial report (as of the end of January 2017), Patek Philippe’s UK importer and distributor Rhone Products admitted that the group’s ‘main risk’ was the decline in consumer demand caused by the UK economic situation and the exchange rate of the Swiss franc against the British pound.
Last year, the Rhone Products Group increased sales by 14% to 142 million pounds and net profit reached 6.3 million pounds. The company’s directors are ‘happy’ with progress, but also said that currency exchange rates are putting pressure on procurement and profitability.
Since the British referendum last June, after leaving the European Union, price increases for luxury watch brands have been the subject of the market. After the Brexit referendum, Audemars Piguet, Richemont (including IWC, Cartier and Vacheron Constantin) and Hublot have increased the price of products in the UK market by about 10%. In the past year, Breitling has increased its product prices twice. In November 2016, Rolex also raised the price of watches in the UK market by 10%, which is also the first time that Rolex watches in the UK market have ushered in price increases since 2012.
The fall of the pound against the Swiss franc has led to a sharp rise in the export prices of Swiss watches to the British market over the past 12 months, a narrowing of the price gap between products in the UK and other major markets, and increasing profit pressure on local retailers. At present, the UK is the world’s fourth largest export market for Swiss watches.