The move follows a price-drop test run in Q4 and comes with the addition of a “quality assurance card” from GIA for some loose diamonds.
Swatch Group Warns of ‘Massive’ Price Hikes
The company said it might have to up movement prices after its request to alter the 2013 agreement that regulates its deliveries of components to other watchmakers was rejected.
Biel/Bienne, Switzerland--Swatch Group issued a statement Thursday warning of “massive” price hikes to come in the wake of the Swiss Competition Commission’s rejection of its proposal for moving non-purchased movements.
Back in 2013, Swatch Group reached what it described as an “amicable settlement” with the Competition Commission (Comco) that allowed it to begin dialing back the volume of finished movements and movement parts that movement maker ETA supplies to third-party customers, companies like Tudor and Sellita. A complete stoppage in supply is set for the end of 2019.
Until then, Swatch Group is obligated to maintain movement production at a certain level despite the fact that many of its customers have drastically reduced the size of their orders, with some major customers not placing any orders for 2017.
Because of this, Swatch Group asked Comco to allow ETA to try to sell the non-purchased movements to all its third-party customers, not just those covered under the 2013 agreement.
Comco rejected this request.
In a statement issued Thursday, the commission said, “The difficult economic environment in which the watch industry is currently located is … not a sufficient reason to modify the scheme adopted in 2013.”
Swatch Group called the decision “utterly unrealistic.”
“The Swatch Group proposal never intended to deviate from the amicable settlement but rather to supplement it in order to take the abusive customer behavior into account,” the company said.
“With this decision, ETA and Swatch Group must once again assume their customers’ economic risk … ETA must maintain the determined capacities for the coming years in order to meet its supply obligation as defined by Comco.”
Swatch Group added that it will have to consider “massive price hikes” in order to cover the additional costs associated with producing these movements that it’s not able to sell.
Jon Cox, a Switzerland-based Kepler Cheuvreux analyst who covers Swatch, said the threat “isn’t really serious” because Comco can reject any price increases it views as unreasonable.
But he added, “Of course this could be another reason it [Comco] rejected Swatch Group. It may have indicated that, given Swatch Group’s situation, it won’t stand in the way of price hikes.”
It’s an ironic turn in a case that dates back to 2011, when Swatch Group first approached Comco about a reduction in supply.
At that time, many companies bemoaned Swatch’s request, which was called a “bombshell” that would surely force smaller watchmakers that were unable to find alternative movement sources out of business.
Now,
Swatch Group said Friday that it has no further comment on Comco’s ruling.
The Latest
The site has been down since Thursday evening, just ahead of its spring auctions.
The late former U.S. Secretary’s collection went for quadruple the sale’s pre-sale estimate.
Despite the rising prices, consumers continue to seek out the precious metal.
Three fifth graders’ winning designs were turned into custom jewelry pieces in time for Mother’s Day.
Kimberly Adams Russell is taking over the role from her father, David Adams, marking the third generation to hold the title.
As a token of womanhood, this necklace depicts when Venus was born from the sea.
Tradeshow risks are real. Get tips to protect yourself before, during and after and gain safety and security awareness for your business.
The deal gives the retailer control over the distribution of Roberto Coin jewelry in the U.S., Canada, Caribbean, and Central America.
Show your mother some love with a piece of fine jewelry.
The company’s Easton location will remain open.
Brian D. Fleming of Carla Corporation was elected to serve a one-year term in the role.
Sponsored by the Las Vegas Antique Jewelry and Watch Show
Tobak, author of “Ice Cold: A Hip-Hop Jewelry History,” shares how the exhibition came to be, and the pieces people may be surprised to see.
Stars adorned themselves in emeralds, platinum, and myriad bird motifs, writes Associate Editor Natalie Francisco.
M.S. Rau is set to open a seasonal gallery in the high-end resort town early next month.
The branded jewelry market is thriving, said Richemont Chairman Johann Rupert.
The six designers, all participants in the show’s Diversity Action Council mentorship program, will exhibit in Salon 634.
The highlight of his collection is the coveted Patek Philippe Grandmaster Chime, which could sell for up to $5 million.
The “Venetian Link” series modernizes the classic Veneziana box chain in its bracelets and necklaces.
The Seymour & Evelyn Holtzman Bench Scholarship will provide tuition assistance to two low-income students.
The Swiss watchmaker said the company’s plans to use a new version of the Hallmark crown on jewelry would confuse consumers.
The executive talked about the importance of self-purchasers and how fuel cell electric vehicles are going to fuel demand for platinum.
The Indian jeweler’s new store in Naperville, Illinois marks its 350th location, part of its ongoing global expansion plans.
It will award a graduating high school student with about $10,000 toward a GIA diploma and an internship with the Seattle-based jeweler.
Wheat Ridge, Colorado police took a 50-year-old man into custody Wednesday following a two-month search.
PGI partnered with four new and seven returning designers for its annual platinum capsule collection.