Last Thursday, the Swiss National Bank made a surprising announcement: it would remove the cap on the Swiss franc against the euro, a policy that had been in place for over three years. This decision immediately caused the Swiss franc to break free from its peg with the euro, leading to a sharp rise in its value. Overnight, the Swiss franc surged by nearly 30% against both the euro and the British pound. For a country heavily reliant on exports—ranging from pharmaceuticals, chocolate, chemicals, dairy products, watches, to military equipment—this move posed significant challenges. The tourism sector was also hit hard, as higher exchange rates made Switzerland more expensive for foreign visitors.
Local students even expressed their frustration, with one saying that tuition fees had risen by 30,000 Swiss francs in a single day, making it difficult to continue their studies. Meanwhile, the watch industry was under the spotlight. Many in the watch community were asking: are prices going up? A recent report from Watch World Xiaobian highlighted various media outlets and expert opinions from within the watch circle.
Shenzhen Jing Bao reported via Xinhua: "The Swiss franc surge has made buying Swiss watches more expensive." With the Swiss franc rising nearly 30% against the euro, the cost of purchasing a Swiss watch in euros or other currencies could increase by up to 30%. If the franc continues to appreciate, the cost for international tourists visiting Switzerland will only go up further.
@Beans, a well-known figure in the watch world, commented: “For watch manufacturers, this isn’t good news. It could have a huge impact on sales. While production costs might be affected, the real issue is the pricing strategy. If the original price is set in Swiss francs, the increase could be significant. Manufacturers may not adjust immediately, but agents might absorb some of the cost to protect buyers.â€
@release does not return, an executive director at CCSMEDIA, said: “The Swiss franc has jumped by 30%! The future of the watch industry is uncertain. Friends online are lamenting, brands are crying out, and buyers are upset, hugging each other, saying, 'We still have so many watches we haven’t taken yet!'â€
@FashionTrendsTim noted: “At the upcoming Geneva watch fair, the Swiss central bank announced its exit from the euro, causing the franc to jump 16%. This suggests there’s still room for further appreciation. Meanwhile, Richemont shares fell 15%, and Swatch shares dropped 14%. With such exchange rate fluctuations, watch prices are expected to rise soon.â€
Pan Jian, editor-in-chief of Fashion Time, pointed out: “History often repeats itself. The last ‘quartz revolution’ in the watch industry was driven by the oil crisis of the 1970s. This time, the Swiss franc’s de-pegging from the euro is likely linked to falling oil prices.â€
@Financial Network shared: “Swiss National Bank's interest rate cut left Swatch speechless. The SNB's actions today represent a tsunami for export industries and tourism, affecting the entire country. The world’s largest luxury chocolate company, Swiss Lotus, is trying to ease the pressure by increasing production. Richemont shares plummeted.â€
@Phoenix Finance added: “The Swiss National Bank abandoning the 1.20 euro-to-Swiss franc floor triggered a major shock in the foreign exchange market. The euro dropped over 2000 points against the franc, a nearly 30% decline. This move poses a big challenge for Swiss exporters and tourism, with Swatch Group calling the franc surge a 'tsunami' in the export sector.â€
@Sina Finance reported: “Before the Swiss franc surge, people rushed to buy Omega! Swatch Group’s shares fell 16% after the SNB removed the 1.20 euro-to-franc floor. The euro plunged 25% against the franc. Brands like Swatch, Omega, Rado, Longines, Tissot, and Breguet are all affected.â€
@Zhang-sail Shanghai, a watch player, said: “The 'quartz crisis' that nearly killed Swiss mechanical watches wasn't just due to quartz technology. A 40% rise in the Swiss franc was the real cause. This led to changes, factory closures, and mergers, forming the large groups we see today. Now, Swiss watches no longer focus solely on precision but emphasize artistry and beauty, reducing production while raising prices. With the franc now surging again, the future is uncertain. What new changes will come next?â€
In the short term, the domestic Swiss watch market is unlikely to see immediate retail price adjustments. However, the instability of exchange rates contradicts the steady pricing rules of the market. Regardless, the Swiss watch industry is facing a major crisis. How it adapts and moves forward remains to be seen.
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