The Breitling Watch Source Forums

Rolex Sub LN E6850 (Germany)
Rolex Daytona E9650 (Germany)
Breitling SOC E5150 (Ireland)
Breitling B01 E7840 (Ireland)
Breitling TO E4850 (Ireland)

Madness really. My SF was 2350 to me last and my Rolex 16610lv was 4900 also last year, both new AD's.

Getting to the point that I'm out.

How ye feel about it?

_________________
Breanach78

A Few Breitlings.

I agree. I've cut down on my watch buying considerably over the last year or so (and hence also my flipping!) as I just can't justify the prices being charged now, especially for the watches I like (i.e. in-house models). But someone is obviously still buying or else we would've seen prices stop going up.......

_________________
Driver8

Site Moderator

Someone or some markets? Is it a case of the Asian markets driving up prices every where?

_________________
Breanach78

A Few Breitlings.

That's my guess. Numbers show the Asian markets are dominating sales of Swiss watches, which seems to be creating a bubble effect, where prices are far exceeding reasonable value. Of course, prices have always reflected a premium above just manufacturing cost and basic profit margins, but the constant barrage of recent increases is above and beyond that, and would seem to be driven by buyer behavior. The exchange-rate excuse is bogus. As has been discussed elsewhere, the Swiss franc has fallen in value over the last year, so even if prices had stayed the same this year, that would still be tantamount to a price increase; the actual price increases by both Rolex and Omega are essentially double increases. The watch companies have to be aware that such pricing is likely going to negatively affect sales volume in the US and other, similar markets, but they probably don't care, as long as the Asians are there to pick up the slack.

It's classic bubble behavior. The thing is, all bubbles burst at some point. When the Asian economies cool down - as they inevitably will - it will be interesting to see what effect that has on the Swiss watch industry as a whole.

Simple supply and demand - if producers can sell out of their product at highe prices they will, and it';s the same in any industry. I quoted a new customer over the weekend that wanted some work done and I didn't really have the capacity to do it with existing resources so I quoted high - if I had a glut of resources I would have quoted low to try and get the business.

It's not going to be sustainable at current growth rates, but if companies are smart about how they invest in the boom times they will be fine. The biggest danger in my mind for the producers is that they aren't going to lower prices when the market slows so they need to be careful that they can still maintain volume (likely boosted with new models).

New models come out every year, though. How would new models be enough, in and of themselves, to sustain volume in a down market, if the producers are trying to sell those models at prices that were established in a boom market? Regardless of how nice the models might be, if the prices are too high for most potential buyers, how can volume be sustained?

You introduce new models at a price point that will sustain sales - down market = more 'value' models.

I've been out of the 'new watch' market for a while now, with respect to Breitling, Omega, etc. Been looking at used pieces or 'lower end' manufacturers that still make interesting designs. Probably will never own one of those in-house pieces as they have gotten too crazy for me.

With that said, I am holding one spot in my collection for that iconic Navitimer (older model, not 01 version).

_________________
Chrono Jetstream
Montbrilliant 1903
Aerospace E79362

That makes sense, although I can hear old-timers grumbling: "You call this value? Hell, I can remember when a Chronomat cost less than this new Colt-Ocean Extreme does now! I don't care if it does come with a bezel that doubles as a flotation device."

Any watch I buy now is used or sourced from a very trusted non-AD jeweler. I'm simply cannot afford a new watch, and honestly, I just do not like the post 2010 Breitling models. The same goes with Rolex...the square-ish looking Maxi case just killed my love for the brand.

There are two points for the pricing:

One, as mentioned above is the chinese market, that is booming. Watchcompanies cannot increase production as easily, so they have to reduce the quantities on the other markets. To keep up the income, they simply increase the pricing, while reducing the markup of the dealers. (Sell 10% less watches for 10% higher price with 5% less dealermarkup and less handlingcost is good for business...)

Second is the strong swiss franc. Which in fact is not strong on it's own, but the US$ and the Euro are so extremely weak, that the swiss franc exchange rate seems to explode (Although the swiss national bank is doing everything to avoid that), wich leads to export difficulties for swiss companies. Except of course watches, which sell to China...

BG
Thomas

_________________
http://www.ellert.at

But as JacksonStone points out, the dollar has strengthened against the Swiss franc (and the Euro) over the past year. Though it is artificial with respect to the CHF, thanks to Swiss monetary policy. I don't know what crystal ball the watch companies use to determine pricing but if they point to currency trends of the past year as a reason for recent increases in North America, they are being disingenuous.

_________________
David
Je suis désole pour mon mauvais français.

Zenith Pilot Big Date; IWC Vintage Collection Aquatimer; IWC Portuguese 7-day

That doesn't really make sense to me. Volume is volume. Whether Breitling sells 50,000 watches in Asia and 50,000 in the rest of the world, or 70,000 watches in Asia and 30,000 in the rest of the world, it's still 100,000 watches. They wouldn't have to raise the prices to "keep up the income" due to decreased volume in the non-Asian markets.

I think Roff nailed it: they charge these prices because they can. As long as there is a customer base willing to pay the asking price, the watches will continue to sell. By all accounts (admittedly anecdotal), Asians are buying a lot of watches, and they don't haggle over price. They pay full retail, and seem happy to keep doing so, even when the prices go up. I've spoken to several ADs here in Portland who say a good portion of their customers are Asian tourists who want to take some watches home with them, which brings up an interesting point: perhaps a good deal of the volume in non-Asian markets is also due to Asian customers. So, if/when the Asian economies do cool down, there might be a sagging in volume not only in the Asian markets, but in the non-Asian markets as well.

As for the exchange value argument, CH-dmath already explained it: it's horse hockey. Had prices simply stayed the same this year in the US, it would have been tantamount to an increase, given that the dollar is stronger, relative to the Swiss franc, than it was last year at this time. The actual increase becomes a double dip.

More food for thiough I came across...

Sub Date, which was about £2100 in 1999 as above today £5395

Omega SMP chronometer was £1200 in 2006, now its closest equivalent is £2700

_________________
Breanach78

A Few Breitlings.

So taking the period into account, Omega's price increases are more drastic than Rolex's: factor of 2.56 over 13 years for Rolex vs. 2.25 over 6 years for Omega. Interesting since Rolex often gets taken to task for their inflation rate.

_________________
David
Je suis désole pour mon mauvais français.

Zenith Pilot Big Date; IWC Vintage Collection Aquatimer; IWC Portuguese 7-day