Patek Philippe aligns global pricing and adjusts to the strong Swiss franc. Official Press Release…

Already eight days (!) ago I informed you correctly as one of the very first that Patek Philippe will make some price adjustments. Today the famous Geneva watchmaker released this …

 

As my readers you always get the information first! This is what the watch-insider stands for…

Already eight days ago I correctly informed you about what today now is official.

Please click  >>> HERE <<<  to read my entry from February 10th

Patek Philippe just sent me this Press Release. I do just copy and paste it here for you to read it …

 

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Press Release Patek Philippe, Geneva February 2015

Patek Philippe aligns global pricing and adjusts to the strong Swiss franc. The measure benefits the brand’s dealers and safeguards the interests of its customers. Patek Philippe has announced measures to cushion the negative impact of the strong Swiss franc and will harmonize its prices worldwide. Even prior to the decision of the Swiss National Bank (SNB) on January 15, 2015, to abandon the minimum exchange rate of the franc versus the euro, prices for Patek Philippe watches varied by differing amounts from region to region. The main reasons for these differences were exchange rate trends involving various foreign currencies in relation to the Swiss franc. Between the end of 2011 – when the Swiss franc appreciated significantly for the first time, and the euro exchange rate floor was introduced – and January 14, 2015, prices repeatedly fluctuated by wide margins due to rising and falling forex rates of local currencies versus the Swiss franc.

The disparity of local sales prices can be illustrated with the example of a complicated wristwatch such as the Ref. 5960 Annual Calendar Chronograph in platinum with a Swiss price of CHF 78,200. In Hong Kong, it retailed for HKD 795,100. This was equivalent to CHF 104,000 at the going exchange rate on January 14, 2015, and corresponds to a difference of +33% versus the Swiss price. The decision to adjust prices in certain markets had already been made before the announcement of the Swiss National Bank (SNB).

It has always been part of Patek Philippe’s philosophy to assure preferential sales and service resources for local customers. The significant price differences in the magnitude of +20 to +25% in Asia and the USA compared to Switzerland and the eurozone, attributable mostly to foreign exchange trends, destabilizes local markets by enticing customers to buy their watches abroad and could lead to the development of a gray market. The announcement on January 15, 2015, by the Swiss National Bank that it would discontinue its defense of the minimum euro peg further increased the disparities in global pricing. The objective of Patek Philippe’s decision to adjust prices is to effectively safeguard the interests of its 440 retail partners and their customers.

The following adjustments have been made:

Switzerland: 5% reduction

Europe, eurozone: 7% increase

Great Britain: unchanged

Asia, Pacific Rim: 3% reduction (Hong Kong 7% reduction)

Japan: 5% increase

North and South America: 7% reduction

The adjusted prices are valid effective February 10, 2015, and will apply until the end of June 2015, subject to change if substantial exchange rate fluctuations occur. Patek Philippe will closely monitor the situation in the coming months.

Thierry Stern, president of Patek Philippe, addressing his global network of distributors and authorized dealers, said: “As you can imagine, this was an extremely delicate decision-making process. But you know that Patek Philippe always pursues long-term goals, and we place great emphasis on protecting the interests of our market partners and end customers.” And he added: “Within this new and difficult context, it is my objective to make sure that our customers in the individual markets can expect fair prices, excluding VAT and other taxes, and that our dealers can operate within a sound financial framework.” Patek Philippe, which just celebrated its 175th anniversary last year, has been owned by the Stern family for four generations.

The Genevan manufacture employs some 1800 persons in Switzerland, including 1600 in Geneva, and produces about 55,000 watches a year. They are sold in nearly 70 countries by 440 dealers. With a share of 45%, Europe is the largest market, followed by Asia with 32%, North and South American with 15%, and the Middle East with 8%.

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PS: What I meanwhile hear is that the reductions in Hong Kong are much higher then the official communicated 7 %.

Is there anyone out there who can confirm this?

Please use the comment function and tell me what you know…

Thanks!

 

 

 

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2 Comments

  • Alexander,

    I’m in Hong Kong right now. The deal here is there is lots of competition on the market. Some Patek Philippe locations are rather odd e.g. opposite Times Square mall, and if given the choice Patek would never allow such a boutique under normal circumstances. Keep in mind Patek doesn’t own its own boutique in the largest luxury watch market in the world!

    Second, the models are all over the place – one-two grande complications, one annual calendar, but inexplicably a lot of Ellipse, close to zero Nautilus, etc. There is no strategy here. The retail experience is underwhelming as well.

    Thirdly, since the boutiques are owned by a distributor they offer extra discounts. Without even bargaining I was already getting -10%. Lange gave me -5% right from the start.

    I could very well understand some extreme cases going for less than 20% as the Handelszeitung article mentioned, however if I had the money for a PP watch going to Europe would be a preferred choice – the experience is night & day.

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