Swiss today took MAJOR step to devalue their Franc >>

[Haywood_Milton]

so expect all rumoured Rolex price rises to be at least postponed while the effects are reviewed.

Exchange rates against most major currencies have jumped substantially with immediate effect.

Of course, the price of gold continues to soar for the moment and may on its own require some adjustments in RRPs to follow.

Haywood Milton, UK

[Cru Jones]

hmmmmm....maybe i don't know enough about how major international retail companies work, but, aren't they extensively hedged against currency fluctuation? yes, results can be impacted by exchange rate fluctuations, but, relentless price increases over many years can't be explained by currency fluctuations.

something tells me that price increases aren't directly tied to exchange rates, but, rather, to supply/demand and brand positioning. otherwise, we'd be seeing price decreases, too, when exchange rates swing the other way in order to support demand internationally.

[R.G]

Exchange rate versus various other factors contributing to possible price increases...

... This old nut, again.

[Haywood_Milton]

Price rises are not relentless. In the 1990s Rolex prices froze for a number of years.

Rolex UK's Henry Hudson himself told me quite explicitly that two things should be watched with a view to anticipating price adjustments, both the commodity prices ( gold & platinum mostly ) and the Swiss Franc versus local currency. In my experience he was always proved right in this.

It is potty that some people on this forum and elsewhere talk about the "annual October price rise" etc, based on what has happened in the last few years only.

Haywood Milton, UK

[R.G]

Originally Posted by Haywood_Milton

Price rises are not relentless. In the 1990s Rolex prices froze for a number of years.

Rolex UK's Henry Hudson himself told me quite explicitly that two things should be watched with a view to anticipating price adjustments, both the commodity prices ( gold & platinum mostly ) and the Swiss Franc versus local currency. In my experience he was always proved right in this.

It is potty that some people on this forum and elsewhere talk about the "annual October price rise" etc, based on what has happened in the last few years only.

Haywood Milton, UK

I think I agree with you, it's coincidental and people seem to latch on to it like it's a given at a specific time each year.

It is without doubt to do with the various contributing factors as opposed to one sole reason.

Evidently some people like to discuss it over and over. Personally however I think the 'price rise' topic get's a little boring when brought up as frequently as it does.

No offence to anyone, just my take on it. It is what it is and no-one can change what happens.

[johnbeth]

Rolex UK has no saying in what Geneva Rolex decides. No matter what the swiss franc currency is valued at and commodity pricing is at, prices for Rolex watches will increase.

[Haywood_Milton]

Hi Johnbeth,

I wasn't saying Rolex UK tell Geneva how to price things, I was explaining the reasons Rolex UK give for why their prices have to change.....the money they get from ADs in GBP has to be converted into SFR and Geneva expect the same SFR from everyone, more or less, so the GBP price has to go up if the SFR moves strongly against it.

As for Rolex prices going up regardless you will generally be right in the long term because of inflation, but can you tell me what happened in 1990s UK ? Years without any change to RRP ? Hmmm, no link to the SFR / GBP and commodity prices perhaps? Not freezing prices ( because dropping them is unacceptable ) until inflation catches up or commodity values / currencies move again the other way ? I think you'll find Rolex prices freeze again in the next 5 or 10 years.

Haywood Milton, UK

[Paulie 50]

Originally Posted by Haywood_Milton

Price rises are not relentless. In the 1990s Rolex prices froze for a number of years.

Rolex UK's Henry Hudson himself told me quite explicitly that two things should be watched with a view to anticipating price adjustments, both the commodity prices ( gold & platinum mostly ) and the Swiss Franc versus local currency. In my experience he was always proved right in this.

It is potty that some people on this forum and elsewhere talk about the "annual October price rise" etc, based on what has happened in the last few years only.

Haywood Milton, UK

Originally Posted by R.G

I think I agree with you, it's coincidental and people seem to latch on to it like it's a given at a specific time each year.

It is without doubt to do with the various contributing factors as opposed to one sole reason.

Evidently some people like to discuss it over and over. Personally however I think the 'price rise' topic get's a little boring when brought up as frequently as it does.

No offence to anyone, just my take on it. It is what it is and no-one can change what happens.

I agree with both posts, the people who want to buy a Rolex are not really bothered about exchange rates, especially as most of the people complaining on here own more than one watch anyway. We have a great Irish saying, " Talks cheap; but money buys land " People will make their own mind up, no matter what the price.

[greekbum]

I think you'll find Rolex prices freeze again in the next 5 or 10 years.

I have to agree on this as they have to wait for demand at these prices to show up and it might take 5-10 years. They cannot keep raising 10% annually who will buy? A SS Sub today is $8000 plus tax add 10% your at $8800 plus tax add another 10% your at $9600 plus tax it cannot go on and they must now IMHO wait for the buyers at these levels.

[R.G]

Originally Posted by Paulie 50

We have a great Irish saying, " Talks cheap; but money buys land " People will make their own mind up, no matter what the price.

Ha ha ha Brilliant.

[jhcam8]

Originally Posted by Cru Jones

hmmmmm....maybe i don't know enough about how major international retail companies work, but, aren't they extensively hedged against currency fluctuation? yes, results can be impacted by exchange rate fluctuations, but, relentless price increases over many years can't be explained by currency fluctuations.

something tells me that price increases aren't directly tied to exchange rates, but, rather, to supply/demand and brand positioning. otherwise, we'd be seeing price decreases, too, when exchange rates swing the other way in order to support demand internationally.

Interesting...how often have you seen price decreases for nearly anything?

[snowbird]

Originally Posted by jhcam8

Interesting...how often have you seen price decreases for nearly anything?

Lots of things, when supply has exceeded demand . . . US housing in the last few years; actual prices paid for cars (after rebates and discounts) until the automakers cut capacity; gold after the bubble collapsed in 1980; Dutch tulip bulbs after the bubble collapsed in 1637; etc.

[jhcam8]

Originally Posted by snowbird

Lots of things, when supply has exceeded demand . . . US housing in the last few years; actual prices paid for cars (after rebates and discounts) until the automakers cut capacity; gold after the bubble collapsed in 1980; Dutch tulip bulbs after the bubble collapsed in 1637; etc.

Yes, yes -- I wasn't being clear, but no matter. You are, of course, correct in these examples. I was thinking, perhaps, of sugar in the US.

[dpkong]

buy what you want now before the increases and then sit tight.

[youenjoymyself]

You can only hedge for a year, so extensive long term hedging is impossible.

Rolex will not lower its prices and the very best you can hope for is a pricing freeze.

That said, the price elasticity of luxury goods is different from most others in that there is less sensitivity to high prices. There is in many cases, an increase in demand as a result of prices due to perceived premium branding / quality, etc. I would suspect this type of consumer behaviour would be prevalent in growing Asian markets.

I live in Canada and our dollar has appreciated significantly against the US dollar. Prices of US goods remain on average 20% higher here than there nonetheless.

[tulsaokusa]

The runaway greed at the highest levels of international banking has yet to fully trickle down where we find a significant diminishment of the middle-class. International markets will shift dramatically in the next 1-10 years. Luxury brands will not be immune. They will suffer the greatest.

The bubble is growing. It will pop.

You can set your watch to it.

[Lion]

All I know is if you have a "Want".....we always find a way to get it(human nature) or at least I do!!!

[Welshwatchman]

Originally Posted by jason.mobi

The bubble is growing. It will pop.

You can set your watch to it.

A little vague on the "bubble" specifics and "popping" time-scales there.

Rolex seems to dramatically reducing supply into the marketplace as well as controlling the supply/retail chain.

Perhaps they are anticipating and pro actively managing a potentially sharp market downturn.

[Anna Tessa]

Originally Posted by youenjoymyself

You can only hedge for a year, so extensive long term hedging is impossible.

Rolex will not lower its prices and the very best you can hope for is a pricing freeze.

That said, the price elasticity of luxury goods is different from most others in that there is less sensitivity to high prices. There is in many cases, an increase in demand as a result of prices due to perceived premium branding / quality, etc. I would suspect this type of consumer behaviour would be prevalent in growing Asian markets.

I live in Canada and our dollar has appreciated significantly against the US dollar. Prices of US goods remain on average 20% higher here than there nonetheless.

Well stated. The luxury goods market is quite unique, and its customers tend to have a bit more financial "breathing room" than average consumers. It's still not clear what effect this Swiss franc pegging will have on watch prices.