Reply With QuoteGood, they might start reducing prices on Omega
Swatch Group AG shares plunged as the watchmaker reported a collapse in first-half profit, showing how the malaise in the luxury sector has spread from Hong Kong to other top markets such as France and Switzerland.
The stock fell as much as 14 percent in Zurich as the Swiss maker of Omega and Tissot timepieces said earnings slid 50 percent to 60 percent. Analysts expected a 22 percent drop in net income. Sales also missed estimates, falling 12 percent.
http://www.bloomberg.com/news/articl...-as-60-percent
Good, they might start reducing prices on Omega
They are performing well - i think the tissot and Hamilton end of business is the problem. I therefore wouldnt hold my breath for omega price cuts.Originally Posted by Vanguard
Terminal decline?.......... Time will tell (pardon the pun)
Maybe they should change their policy on parts supply and try to maximise the income stream instead of restricting supply. There's demand for parts which they are choosing not to supply, how can that make sense? I guess that's seem to be insignificant in the grand scheme of things.........a further indication that they're losing the plot.
Paul
I wonder how will things change starting as of January 1st 2017 when SWISS MADE watches will have to be not 50% but 60% swiss. The difference is not much but it still matters...
Also the fact that a major watch company's revenue is falling is not something new. It's been like this for a few decades if I'm not mistaken...
And that's the end of the market which is losing sales to Smart Watches. I'm seeing more and more people wearing Fit-bits, Garmin, Apple and Android watches these days despite most people on here saying the Smart Watch won't impact the Swiss Watch Industry. It has, and it will continue to do so. The lower end of the market is where the volume is, and where Swatch are being squeezed hardest.
A corralation between some awfully tatty offerings from Omega lately and sales decline? Surely not....
Joking aside though it's been covered plenty on here about Omega's new releases being (generally) poor, awful lookers and even though I own a Hamilton you don't see many being advertised, there's not many around in the second hand market either.
Thats the first thought I had. Agreed.
It will make no difference, as it was Swatch who were pushing for the change if I recall correctly.
They should have listened when I urged them to increase their prices, pump out more limited editions, make spare parts impossible to obtain outside their empire and increase the price of watch service.
Casting my gaze over a display of Tissot is never very engaging, I can believe that's part of the problem.
There was a recent interview with head of Longines, I forget where. He sounded very bullish, especially on the health of large section of their range that don't engage forum enthusiasm.
The Luxury goods market has been driven by bumper growth in the far East. There economies have slowed down and a lot of luxury good makers have issued profit warnings (Burberry, LMVH(Louis Vutton,Prada,watch makers)Terminal decline?.......... Time will tell (pardon the pun
Maybe they should change their policy on parts supply and try to maximise the income stream instead of restricting supply. There's demand for parts which they are choosing not to supply, how can that make sense? I guess that's seem to be insignificant in the grand scheme of things.........a further indication that they're losing the plot.
Paul
You didn't read the article . Richemont have issued profit warnings (Cartier,IWC) and LMVH (Tag Heuer) have issued profit warnings as sales suffer. So what makes Omega immune?
The Luxury goods market has been driven by bumper growth in the far East. There economies have slowed down and a lot of luxury good makers have issued profit warnings (Burberry, LMVH(Louis Vutton,Prada,watch makers)
It's about an even split in sales between high and low end:
LVMH – Louis Vuitton Möet Hennessy
I'm surprised at some of the gleeful responses at the news. Imagine a world with Swatch Crushed and ETA being sold off or even ended as a rival movement maker steps in.
Great isn't until you take in your Breitling or IWC for repair and then find its not repairable due to ETA demise. Don't worry though as you can always buy Rolex (minimum price £10k) by this time there is no mass mechanical market left so you have a choice of either Smartwatch makers or the now Super Expensive Rolex and Patek (now owned entirely by Rolex) as Vacheron, JLC and Zenith collapsed..
Not a world I'd wish to see. Not sure about some on here though.
This doesn't surprise me, there's a feeling that some of the froth has gone out of the watch market lately. A huge number of models and brands have been launched over the course of a few heady years, many apparently based on the theory that anything sufficiently overpriced must be desirable, when in fact relatively few models genuinely are. Many are aimed squarely at those with more money than either sense or taste, and contrary to popular opinion, there are a limited supply of those. Meanwhile for some other models the asking price seems quite unrelated to the actual product. There's been a distinct feeling of tulip mania about the whole thing, entertaining as the run of new models and glossy marketing has been. I don't mean to sound unduly pessimistic, as there have been some really interesting models too - genuine quality will always survive, and truly beautiful and well made watches will continue to be fascinating and desirable. But I've been noticing that I personally feel less inclined to treat myself to a new model, at least without selling something else first - I find myself thinking about the better car I'd be able to get with that cash instead. Previously I think I'd have been too fixated on the watch to care about that, so something strange is going on there!
I don't think it should come as a surprise to anyone.
It has nothing to do with quality of offerings or parts policy. It is not going to be limited to one watch group or brand or even to watches. We have seen several such stories and there is nothing new here.
It is hardly anything to rejoice over unless Ofcourse you are one of the few who have been hurt by the parts policy or you are one of those who thinks all big Swiss watch companies are big bad wolves who are refusing to give you a watch for free. Luxury goods sales have taken a downturn and things are unlikely to get better unless the Far East market picks up again.
Spot-on, though I'd say that Omega isn't quite the worst offender here.
In general, the majority of the industry has been a bit foolish to crank out so many badly-drafted trendy new releases instead of developing distinctive and competently-drawn products that will age gracefully. With a few notable exceptions, this short-sighted lack of design integrity has turned watches into a bit of a cyclical fashion product, unfortunately.
Excellent post, Sir.
Most of the froth has fizzled out.
A lot of irrelevant, overpriced and nonperforming stuff has been released.
While some overpriced bling has proved extremely desirable, most of it has not.
Those with more money than sense seem to be suffering from a lack of money these days, what with the slow down in China, Brexit, etc...
Yes, the asking price and the actual product often have absolutely nothing to do with each other. I am not sure what the situation is with the Swatch group, but reports from the Richemont group state that they are destroying watches rather then decreasing their prices.
I think the above are important factors, but do not forget how expensive and difficult it has become to service the (S)watches. To the average punter, having to send his watch away for who knows how long and paying hundreds of pounds for the privilege every 5 years or so is a bit much. They might be encouraged to buy something disposable like a "Smart"watch instead...
Am I wringing my hands with glee? Yes.
Do I feel sorry for the Swatch Group? No.
Ohhhh...you're not allowed to say that on here :)They will be after you with Pitchforks
"They" are already after me so I have nothing to lose.
I know your aversion to a lot if not most of the modern designs and there might be a sprinkling of truth in your argument in that the sheer number of bramds and models has somewhat diluted the impact. And, yes luxury watches have become a consumer product and at least for some a fashion product. However, I am not sure if that is responsible for the downturn. Having numerous models might slow down the sales of individual models but they would actually increase total volume and revenues. Much as people would like to link the downturn to whatbis disagreeable to them in the watch industry, the fact is that it is simply a result of slowing of the economy- mostly in FarEast and to some extent elsewhere. Personally, I love vintage as well as modern designs and Swiss as well as non-Swiss brands and it is hard for me to gloat at the troubled times of Swiss watch industry.
You are allowed to say it once, may be twice if people are in a generous mood. Ad Nauseum repetition of the same arguments identified one as a troll. If you are looking for a product whose price is in line with the actual cost, the doors of Asda are open for you. Or the Argos catalogue, assuming it is still in business.
No-one is after you. No-one cares. You are utterly irrelevant.
Troll.
Oxymoron.
I'm certainly not gloating, but I do think that this downturn will be exacerbated by the lack of long-term vision that's evident in the way many companies are managed.
By the way, I'm all for modernity — provided it's done skillfully. I just notice a lot of substandard design work from makers that really ought to know better. This sort of complacency is not a healthy sign.
I think the world is changing so rapidly and future becoming so hard to predict, even the most successful companies: industries have one eye on the next quarter and second on the next year. Nobody is thinking about the long term future.
I am not sure I agree with this. There are companies, such as Rolex that are very much thinking about the long term future. They produce a well made enduring product. While their watches are expensive to service you can make a convincing argument for why they are worth taking care of and spending money on. They seem to carefully manage the number of watches they release to the market and create the perception that demand is greater than supply.
On the other hand, there are clearly companies in the marketplace who are trying to squeeze out every penny, right this minute but are not working towards a sustainable future. In my opinion the style of Kern at IWC epitomizes this approach. He has inflated the perceived substance of the watches by clever marketing and by raising prices. This approach can only work in an economic upturn but during a downturn there will be a collapse in sales. They may have to destroy stock, rather that offer discounts, in an attempt to maintain their image.
The future may be hard to predict, but a company with solid values, a desirable product and excellent customer service is bound to do well.
Last edited by GrandS; 16th July 2016 at 00:08.
IWC have lowered prices on several of its watches, including its 2016 pilot line. They're still fairly expensive, but cheaper than the 2015 models.
We all know GrandS can be somewhat provocative with his comments, but he's made some good points on this thread. He's entitled to his opinion, he's expressed it constructively. His comments are far more relevant than yours at this stage!
OK, you dislike the guy. We all know he can make daft comments but he's not alone. You don't paint yourself in a good light by your persistent attacks on him......... Maybe it's time to quit playing the bully- boy?
It's a watch forum ffs , not a platform for folks to play alpha male.
Paul
Last edited by walkerwek1958; 16th July 2016 at 11:13.
Yes, 'bully boy' is the right description......I use the 'ignore' button on his stuff. The forum seems a better place like that.
We know this is the case, wonder if Swatch will follow this?
Are Richemont really destroying watches or is this an urban myth? The sceptic in me finds it hard to believe; if they chose to withhold them from sale surely they'd either store them or strip hem down for parts, no way would they destroy stuff.
If someone can find proof I`ll stand corrected, but to me it's beyond belief.
Paul
It's a relatively common practice in the retail industry, and I have no reason to doubt these claims:
https://next.ft.com/content/b7890250...c-ee846770ec15
http://www.retailappointment.co.uk/n...g-weaker-sales
As a student, I saw plenty of unsold stock being sent to the incinerator at a part-time job. I always thought it was a sick waste.
Unlikely that you'll find any photos of the actual destruction; the process is closely monitored and there are strict policies against photography, for obvious reasons.
Last edited by Belligero; 16th July 2016 at 14:21.
As a kid, the Swiss watch industry seemed vaguely romantic, a rite of passage into a sophisticated, elegant world. It was probably this and the fact that my father wore one, which made such a favourable impression on me.
I still enjoy watches today, possibly more than is healthy, but despite this early predilection, have chosen not one mid-tier or above Swiss watch for myself. Today they don’t interest me and I don’t see this changing.
Amongst a multitude of reasons for this, particularly as regards the dominant players, is for me at least, a perceived shift in brand identity. What once was steadfast, honest and gentlemanly now presents as posturing, aggressive and self-serving. Vintage models exuding charm and refinement seem in certain instances to have been replaced with shouty, brutish gongs.
Of course taste is subjective and brands presumably understand their market, but in my street it’s the more mature individuals who appear to have most disposable income and for most of them, oversized watches would just look silly. The young guns with attitude I know are too preoccupied with buying homes to start playing with mechanical watches any time soon.
Oh, and one more thing. Someone please tell Omega that James Bond just isn’t cool any more. Daniel Craig has started to look embarrassed to be playing the part. Strangely though, Matt Damon as Jason Bourne seems unrelenting.
The FT said "Watches bought back from dealers in Hong Kong were either reallocated to other regions or — in the case of older models which were no longer selling — dismantled and recycled, Richemont said."
I agree with a lot of your sentiments. If you're attracted by the sophisticated and gentlemanly feel of vintage, then current brand image, marketing and design can seem very brash and loud. The more subtle models in a range are sometimes tarnished by association with the monstrosities. I find myself not wanting to buy into the marketing fantasies on offer, they don't quite fit. Some brands still feel sophisticated of course, and there are plenty of models that are exceptions. It's just that when I see the airport watch shop, taken as a whole, sophisticated is certainly not the word that springs to mind. I sometimes wonder how our decade will be perceived in future, and not in a good way.
On the subject of 007, Craig did a great job for Omega between Casino Royale and Skyfall. But the franchise has always gone through stages where it felt past its sell by date - just look at late Roger Moore. At least it's not at that stage of the game with Craig. They have every reason to hang in there - as they always say, James Bond will return.
Last edited by Itsguy; 16th July 2016 at 16:32.
Thanks for your as always considered, even crafted reply; it is reassuring to hear that all is not quite lost!
Navigating the watch market in search of differentiation amidst all the noise can't be easy though. Forum favourites (of which I plead guilty to multiple offences) are evidence of that.
Mr_esearch's inspired Post 18 of the "Some things you like in a watch" thread earlier this week surely demonstrates that the cognoscenti are still thriving amongst us.
Personally the price for Swiss luxury watches has 'jumped the shark' for me - and I can't see any real life improvement in the product from when I bought my first decent watch over 25 years ago. Last week I bought a small hatchback so my son can learn to drive (and as a family runaround) and I'm staggered at how much technology and how many useful extras are packed into pretty humdrum cars nowadays, at pretty reasonable prices. Same goes for a boiler I recently replaced, new TV's and HiFi, even some white goods - demonstrably improved and in many cases cheaper in real terms than 10 years ago (and try buying a 50" TV in 2000!)
What have the Swiss watchmakers done in that time? Whacked up the cost and put a bit of shiny ceramic on the bezel. Not exactly exciting is it? 😐
Sent from my HTC One_M8 using Tapatalk
^
Excitement isn't exactly something I expect from a wristwatch. They're essentially a mature technology.
The whole point of a good watch is that it's the opposite of planned-obsolence consumer electronics. I wouldn't want them to become just another new-and-improved-type gimmick.
It's the quality that makes them special, not the marketing specifications.
Agree wholeheartedly......... But why do they have to be so expensive?
I feel far happier with a a vintage watch or a product from around 15 yrs ago, I just can't relate to the latest oversized overpriced stuff.
Judging from comments on this thread I'm not alone. I'm no longer a 'Young gun with attitude', more like an 'old gun with a cardigan'......... And no urge to be seen wearing the latest Rolex offering. Happier to stick with what I've got and keep 't brass int pocket'
Paul
Instant coffee
The Radio 4 news just now was saying that the Chief executive of the Swatch group was claiming a rush to buy luxury watches in London since the Brexit vote.........
Apart from anything else (and I am sure there are several other important factors), the Swiss central bank has proved incapable of devaluing the Swiss Franc however hard they try (and they have tried very hard). Quite the opposite, the world seems to think the SF is a model currency and hedge against debasement.
http://www.advfn.com/stock-market/FX/USDCHF/chart
As you know, I completely agree with you about vintage.
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