Omega, the Swiss watch brand known for its Speedmaster and Seamaster models, has raised prices by as much as 8 per cent in a move that could hurt sales, according to investment bank Morgan Stanley.
Omega recently raised prices by 2 per cent in Switzerland and China – and by a whopping 8 per cent in the US – the biggest export market for Swiss timepieces, Morgan Stanley analysts wrote in a report, citing their own price tracking data.
The move comes as other watch brands in the Swatch Group staple struggle to grow revenue and could weigh on sales volumes of top brand Omega, which is the third-biggest Swiss marque by revenue.
“The Omega price increase results from weakness rather than strength,” analysts led by Edouard Aubin wrote in the report. “With some of the group’s leading brands (Longines, Tissot, Breguet, etc) struggling, we estimate that the Swatch Group is increasingly dependent on Omega’s cash flow.”
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An Omega spokesperson declined to comment.
Swatch Group got about 60 per cent of its operating profit from Omega in 2022, according to Morgan Stanley estimates. The brand, which recently introduced new versions of its Seamaster diving watch collection to mark the 75th anniversary of the model, could see pressure on sales growth following the price hikes.
The US overtook China in 2021 as the top export market for Swiss timepieces. Recent demand is showing signs of weakness however, with exports to the US declining in April for the first time in more than two years. They rebounded in May.
While models from Rolex SA, the biggest Swiss watchmaker, are extremely difficult to buy at retail because demand outstrips supply, products from Omega, whose sales are estimated at about US$2.8 billion, are easier to come by.Where to buy new and pre-owned Rolexes online: 6 most trustworthy sources
The price increases may reduce Omega’s sales volumes, especially since the brand isn’t actively trying to keep its bestselling models scarce, the Morgan Stanley analysts said.
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