Monthly Archives: May 2015

Locman Stealth 300 Metres Carbon

Italian brand Locman stakes a claim for having made the world’s first Omega replica watches with a carbon fibre case, back in 2003. Whatever, there is no doubt that their Stealth diving watch is one of their best sellers. It is now available in an automatic version, Stealth 300 Metres Carbon, with all-carbon dial and case. Its low weight makes it very comfortable both underwater and in everyday use. The forged carbon case has the attractive mottled appearance typical of carbon, and the carbon fibre dial also has the familiar grey textile appearance. The unidirectional rotating bezel is in ABS, light and resistant to changes in temperature, with one-minute clicks for easy operation. The dial was designed for high legibility, with SuperLuminova on hour and minute hands, and on the hour indices. There is a cyclops-type lens over the date window.

stealth_300m_carbon-1500

The case is large at 46 mm, with 300 metres water resistance, and it houses the S.I.O. Calibre I automatic movement. The solid caseback is in titanium. The  Montblanc replica watches for sale is supplied with a silicone strap or a natural leather strap. The watch, presented at Baselworld in 2015, will presumably be available in boutiques and online in June 2015. Price probably around €600-700.

The price of gold… and watches

The price of gold Breitling replica watches appears to bear no relation to variations in the price of gold. And yet watchmakers manage to explain away this economic anomaly without too much difficulty. The end clients understand, but a few dissenting voices are making themselves heard.

Why is the price of gold falling, but not the price of gold watches?

The question is sufficiently naive to have brought a smile to the faces of watchmaking CEOs—but an awkward smile nonetheless! In some cases, the drop in gold prices really should be reflected in timepiece price tags. Especially since the price of a gold bar has fallen from €44,000 to €28,000 in six months. When the price of a barrel of oil falls, much is made of the impact on “pump prices”. So is watchmaking governed by completely different rules?

The answer is yes… and no. Yes, because Swiss watches are a special type of consumer good—they belong to the luxury goods sector. This highly distinctive market has its own rules, for when you lower the price of a luxury item it becomes more accessible—and therefore no longer luxury. Hence, the saying “the luxury sector never lowers its prices” is not (just) a myth.

Governed by the banks

However, the price of gold is falling and this should be reflected by certain brands, at least in theory. In a simple three-hand watch with a generic movement, the gold case represents by far the greatest part of its value. So if the price of gold falls, the value of the cheap replica Omega watches uk, and consequently its price, should logically also fall. “Unless a rise in exchange rates compensates the fall in the price of the raw material,” points out Laurent Picciotto, founder of Chronopassion. In other words: yes, the price of gold has fallen over the last year, but the value of the Swiss franc has rocketed. So the prices of gold watches have indeed been revised… upwards!

Meanwhile, the price of gold is determined “by five major banks,” according to Jean-François Faure, founder of AuCoffre.com and a specialist in gold investments. “These banks fix the price according to the law of supply and demand and known gold reserves. Therefore high demand will increase the price and vice versa. In order to determine the price, the banks assess the markets’ ability to buy gold over six months.”

Material or movement?

The astute might take this reasoning and apply it directly to watchmaking: since more and more watches are being produced, more gold is being used and so its price can only increase—but that’s only in theory.

Because in practice, the watchmaking industry still doesn’t consume enough to impact the price of gold. A watch case weighs about 60 grams, giving a cost price of around 730 CHF. This helps explain why variations in the price of gold have absolutely no effect on fine watchmaking pieces. Emmanuel Vuille, CEO of Greubel Forsey is categorical: “The cost of materials isn’t actually taken into consideration. All the added value is in the movement, manual work and development and this becomes all the truer the more upmarket you go.”

Edouard Meylan, CEO of H. Moser & Cie makes another point: “We often buy our gold far in advance at a given rate. We use this rate at a certain point in time to calculate the prices of our final pieces. We couldn’t possibly adjust this in real time—the value of our stocks would see-saw. That is the basic principle of cash management.”

Edouard Meylan, CEO of H. Moser & Cie

Meanwhile Jean-Claude Biver, head of the LVMH watchmaking division, explains that watchmakers don’t necessarily heed the real price of gold: “Gold prices have certainly fallen, but in best Omega fake watchmakers’ calculations gold has never been valued at its market price—always below it. This is perhaps why prices didn’t rise proportionally as the price of gold rose, and conversely, why they didn’t fall proportionally when gold prices dropped.”

And yet, prices are down

In spite of this, some CEOs have allowed reductions. François-Henry Bennahmias at Audemars Piguet did in 2013, when he adjusted the prices of his all-gold pieces in line with falling gold prices. Off the record, some have expressed the view that this was simply a price repositioning strategy for the brand’s gold pieces, which had become too expensive.

“It’s a double-edged sword,” judges a retailer. “It can certainly boost sales. But what will a client say when he sees the all-gold Royal Oak he bought for $50,000 reduced to $45,000 the following week?”

Dear luxury economy

Today the price of gold is once again on the rise. It is considered a safe investment in times of crisis: people buy large quantities of it, so its price automatically increases—and this outlook duly emboldens watchmakers to raise their prices. But when the world economy starts to improve, investors will return to riskier and more profitable investments such as the stock exchange, forsaking gold and causing its price to fall again. Yet it is a safe bet that the price of gold timepieces won’t budge.

That’s the way the luxury economy goes: always upwards, never downwards. Especially given that, for once, watchmaking CEOs are in agreement: when asked if end clients are interested in the price of gold and its impact on the price of their luxury replica Omega watches, they answer with a resounding “no”. Sometimes things are just as simple as that: if the client doesn’t ask the question, why come up with an answer?