The fallout from the Swiss Central Bank’s surprise move in January to free the exchange rate between the Swiss franc and the euro continues to have reverberations in the world of luxury timepieces, this time in Hong Kong.
Major retailers in the Special Administrative Region of China have taken the first step to protect Hong Kong’s position as the world’s biggest watch market, after sales plunged by at least 40 per cent in the first three months of the year.
The drop, caused largely by customers abandoning Hong Kong for the cheaper eurozone, thanks to an euro no longer held high by the Swiss franc, left retailers in the former British colony with unsold stocks that reached an “incalculably high level” of six to 10 months for some brands.
“We are facing a grave crisis here in Hong Kong for the whole retail industry,” some of the retailers said, in a letter dated April 14, to the Federation of Hong Kong Watch Trades & Industries.
The 11 signatories, which include the bosses of Emperor Watch & Jewellery, Chow Tai Fook, and Global Timepieces, called on retailers to unify prices to become more competitive.
This would be “the first and most important” step, they said.
“We noted that for instance, the retail prices listed in other duty free countries like Guam and Dubai are lower than Hong Kong,” the retailers said. “Therefore, we request that Hong Kong’s retail prices be aligned with other duty free countries so that it is a fair game for all.”
The retailers also appealed to the watch brands to “grant rebate to retailers to mitigate the effects caused by price differences and adjustments initiated by brands, applicable to all new and existing stocks.”
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