Swiss luxury watchmakers, which have weathered the rise of smartwatches, the pandemic and the highest inflation rates in decades, have expressed concern about a new threat: the strength of the franc.
According to Bloomberg, the CEOs of watch brands, including Oris, Doxa and Maurice Lacroix, said that the marginal profits achieved due to the rise in prices last year had completely disappeared, as the value of the US dollar fell to about 88 Swiss cents in 2022.
The CEOs added that the timing of the rise in the Swiss currency is the worst, because it comes at a time when demand for Swiss watches is declining after an unprecedented boom.
“The decline of the dollar at 88 Swiss centimes is actually a problem,” said Rolf Studer, co-CEO of Oris SA, whose Propilot Kermit watch, priced at 4,400 francs ($4,979), has become a best-seller. When the United States is your largest market.
With inflation risks still present, the Swiss Central Bank is still expected to continue raising interest rates, which makes analysts expect the value of the franc to rise further against the dollar in the coming months.
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