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(Bloomberg) -- Swatch Group AG, Switzerland’s biggest watchmaker, will raise prices at some of its brands by as much as 10 percent after the Swiss National Bank’s surprise decision last week to abandon the cap on the franc exchange rate.
“We will adjust prices in Europe for some brands between 5 to 7 percent, to 10 percent,” Chief Executive Officer Nick Hayek said by phone.
Swatch’s highest-end brands Breguet and Blancpain will be among those raising prices, along with Omega and Longines, which are more mid-range. The executive said he will be “more reluctant” to raise prices for Swatch and Tissot, which sell models at lower prices.
The Biel-based company will be able to compensate some of the gain in the franc as the exchange rate reduces certain costs in retail operations and marketing, Hayek said. The watchmaker’s recent acquisitions of Rivoli, a Dubai-based watch retailer, and Harry Winston, the U.S. diamond jewelry brand, also help, as they are less exposed to the franc, he said.
“However, overall, there might still be a certain negative effect to our sales that I can’t specify at the moment,” Hayek said. Swiss prices will probably remain the same, he said, though the company will continue to monitor the situation.
Separately, Cie. Financiere Richemont SA, the owner of the Cartier brand, is mulling a 5 percent to 7 percent price increase for Europe, said a company official, who declined to be identified discussing internal matters.
--With assistance from Corinne Gretler in Zurich.
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