Swiss watchmaker Omega is raising prices of its timepieces in China and Switzerland from two to eight percent depending on the market. Since the COVID-19 pandemic, watch brands have been struggling to find lost ground.
Omega hiked its prices after closely monitoring the luxury market, where entry-level watches by rival brand Rolex skyrocketed prices nearly twice as much. Swatch Group AG has been struggling to gain revenue. As such, it turned to its top brand Omega to get sales volumes.
However, analysts believe the price increases are a show of weakness rather than strength. They highlighted that leading brands like Tissot, Longines and Breguet are also struggling and have turned to Omega’s cash flow. Longines and Tissot raised prices in February in its UK and Europe markets.
According to Morgan Stanley, Swatch Group got a third of its sales and about 60 percent of its operating profit from Omega in 2022. With the price hike, Omega will witness pressure on sales growth. Analysts say price increases may reduce the brand’s sales volumes as it isn’t actively trying to keep its bestselling models scarce.
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