New Watch Tarrifs

[ts3]

It will be interesting to see if the broader watch market can handle another double digit price hike ok. Many brands have been struggling already after hiking prices aggressively all the while demand had started to fall post hype. I guess there is no need to worry about Patek yet although I am not prepared to pay 160k for a 5740 that was just above 100k at launch... LOL... However, the guys in the middle may face a very tough time. Mid range watches that were 4k or 5k around 5 years ago would be closer to 10k with another 10% to 15% hike. At some point demand has got to fall off a cliff.

[Calatrava r]

Originally Posted by ts3

It will be interesting to see if the broader watch market can handle another double digit price hike ok. Many brands have been struggling already after hiking prices aggressively all the while demand had started to fall post hype. I guess there is no need to worry about Patek yet although I am not prepared to pay 160k for a 5740 that was just above 100k at launch... LOL... However, the guys in the middle may face a very tough time. Mid range watches that were 4k or 5k around 5 years ago would be closer to 10k with another 10% to 15% hike. At some point demand has got to fall off a cliff.

It should but it hasn't yet. Key to many high-end companies is their yearly production is not large so product is very scarce relative to worldwide demand which keeps sales thriving at retail.

[ts3]

Originally Posted by Calatrava r

It should but it hasn't yet. Key to many high-end companies is their yearly production is not large so product is very scarce relative to worldwide demand which keeps sales thriving at retail.

As said I wasn't thinking of Patek and similar but I doubt the likes of IWC and Omega have seen their sales thriving lately. Anecdotal evidence but whenever I visited the large IWC boutique in my town in the past 18 months (for service related matters) it was mostly empty. They have also done away with their on site watch maker who has been helpful in the past. Not sure if the Omega boutique a few blocks down has fared much better.

[dchang81]

Originally Posted by ts3

As said I wasn't thinking of Patek and similar but I doubt the likes of IWC and Omega have seen their sales thriving lately. Anecdotal evidence but whenever I visited the large IWC boutique in my town in the past 18 months (for service related matters) it was mostly empty. They have also done away with their on site watch maker who has been helpful in the past. Not sure if the Omega boutique a few blocks down has fared much better.

I don't understand how those boutiques survive or justify their existence.

[codecow]

Originally Posted by ts3

As said I wasn't thinking of Patek and similar but I doubt the likes of IWC and Omega have seen their sales thriving lately. Anecdotal evidence but whenever I visited the large IWC boutique in my town in the past 18 months (for service related matters) it was mostly empty. They have also done away with their on site watch maker who has been helpful in the past. Not sure if the Omega boutique a few blocks down has fared much better.

They’ve been spending a ton on marketing with F1.

[BraveBold]

None of this is unique to watches. Substantial portion of the market lately (and what has helped the stock market along) is “aspirational” luxury spending… continuously pushing the limits of what people might have historically described as prudent. Actually, who’s kidding who… well past that point.

Many luxury segments have been under pressure lately - tariffs just exacerbate this as consumers are already stretched beyond means…

[Calatrava r]

Originally Posted by BraveBold

None of this is unique to watches. Substantial portion of the market lately (and what has helped the stock market along) is “aspirational” luxury spending… continuously pushing the limits of what people might have historically described as prudent. Actually, who’s kidding who… well past that point.

Many luxury segments have been under pressure lately - tariffs just exacerbate this as consumers are already stretched beyond means…

I agree with your last sentence. A drop in demand here could send shock waves through the market if the used markets saturate with product.

[Russell996]

Originally Posted by Goupax

Rofl, be ready to boycott every luxury Swiss watch brand then. Because there is not a world where the American buyer is gonna accept paying 39% more for a Patek than the rest of the world, the tariffs is gonna get spread around the world to minimize the impact of US tariffs, whatever the number ends up being.

The American buyer voted for it, time to suffer.

[Manofsteelpt]

Originally Posted by Russell996

The American buyer voted for it, time to suffer.

We’re doing just fine, thanks

[basilikumnize]

I think a more or less logical and/or understandable distribution of the Trump tariffs (39%) would be a global price hike of 10% across all models - which is also justified due to the very high gold prices atm (which is another result of having Trump in the White House) - and for Patek watches sold in the US specifically: an additional 10% price increase for the US customer, the rest is equally absorbed by Patek and the respective AD that sells the watch (i.e. 10% each).

In this scenario Patek enthusiasts worldwide suffer a 10% price increase, US buyers a whopping 20% (which is fair), while ADs and Patek make 10% less profit on every watch sold in the US (however Patek now has higher worldwide revenue to compensate for that)

Curious what you guys think?

[Duke Nukem]

Originally Posted by basilikumnize

I think a more or less logical and/or understandable distribution of the Trump tariffs (39%) would be a global price hike of 10% across all models - which is also justified due to the very high gold prices atm (which is another result of having Trump in the White House) - and for Patek watches sold in the US specifically: an additional 10% price increase for the US customer, the rest is equally absorbed by Patek and the respective AD that sells the watch (i.e. 10% each).

In this scenario Patek enthusiasts worldwide pay 10% more, US buyers would pay 20% more, ADs and Patek make 10% less profit on every watch sold in the US (Patek however now has higher worldwide revenue to compensate for that)

curious what you guys think?

Gold took off well before Trump's second term.

The ultimate driver was the sanctions placed on the Russia in 2022, which lead to many central banks around the globe diversifying their holdings into gold. Many countries are afraid of the same actions being placed on them which could destroy their economy and be locked out of their own money. China has been one of the biggest buyers of gold in the past couple of years leading to the spike in pricing.

[TexEd]

I talked with a Tissot AD yesterday. He told me that he received an email from corporate recently directing him to immediately increase his prices by 15% which he did do.

[James84]

Originally Posted by russell996

the american buyer voted for it, time to suffer.

All will work out for America. Long play