Swiss franc soars: what does this mean to IWC?

A corollary question. What will this mean for resale, preowned watch prices?

Wow, thank God I have enough watches right now. I may consider another place to go on my holiday. And that is about it, I guess.

Kind regards,
Paul

Interesting thoughts, Michael. From IWC's CEO perspective (business point of view) it is absolutely correct to encourage people to buy IWCs!

However, your own observation about Richmont contradicts the economic logic you try to apply: Sales have weakened in Asia dramatically. This means: More watches on stock, prices must fall. So the reason to buy now is offset by far.

In addition: Swiss economy is one of the most productive around the globe. All companies in Switzerland will now focus on being even more productive and innovative, to further compensate the loss of the exchange ratio. This will even strengthen the economy. And I sincerely hope also IWC will finally come back to a policy of prices and watches that are more appealing to many friends of the brands that got lost during the last decade.

Many employees of IWC will now have a party, because they live in Germany, but their salaries are paid in Swiss Franc. Imagine! This is quite a substantial present to them.

But at the very end, as an economist, I am sure also this "wave" of panic will flatten very soon, the balance will be re-established, and the whole economic system will be stronger than before. Just because we actually all know that it just does not make sense to try to force market power by fixing an exchange rate. Finally, Swiss National Bank has accepted that.

IWC's decision to develop direct sales through the Boutique network gives it more options in controlling inventory and choosing not to allow too much stock to appear in the secondary market and undermine pricing. Richemont shareholders will have to be patient. The appalling watch sales in the last quarter reflect a period when the CHF was artificially depressed and pegged to the euro. The current and next quarter will begin to reflect the impact of an uncapped CHF. It's going to be ugly for the next 2 or 3 quarters. Management should avoid short term decisions that will affect the long term growth of the brand. This will also coincide with the launch of Apple's wrist product. Hopefully, depressed sales will not be blamed on the i-Watch. As a Richemont shareholder, I fear there may be better value elsewhere when the share price stabilises.

This move from Switzerland will have a definite impact on the watch industry, but as Regulateur stated previously, this "wave" will flatten and people will start purchasing luxury watches (and products) again.

Very interesting times in the watch industry for certain.

One thing I've learned so far... The franc, Euro or any other currency can go up or down, but the price of watches will always go only up!

Boy, do you have that right. Prices have sky-rocketed without justification. What will happen now that there is?!

Some sobering news and interesting ramifications. Thanks Michael.

Ugh, meanwhile the Canadian Dollar keeps plunging. May have to put off some of my planned 2015 acquisitions....