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Bulgari - Bulgari Protect - turning back time on prices in Switzerland
The move is designed to protect watch retailers in Switzerland and comes just days before the start of the Chinese New Year, which will bring a huge influx of tourists to Switzerland looking to buy quality Swiss timepieces.
Speaking to WorldTempus by phone from Paris, Bulgari CEO Jean-Christophe Babin said, "we want to protect the interests of our Swiss retailers, especially in this busy time, otherwise they may decided to buy their watches elsewhere in Europe."
The Bulgari Protect campaign is set to last for at least three months as both the brand and its parent company, the Paris-based LVMH group, evaluate the situation. It will also give Swiss retailers some important breathing space that will allow them to adjust to this new situation.
"For the moment the situation is too volatile to make rash judgements," Mr Babin explained. "We will worry about our margins later. Price is in any case a double-edged sword. Yes, there is the margin for us to consider, but there is also the problem of the price being too high and putting off customers completely."
"The guarantee is also interesting for Swiss residents," he added. "They no longer need to travel to border regions in the euro area to buy a Swiss timepieces."
The Swiss watch market relies heavily on Chinese tourists who come to buy their watches in the country where they are made. But these tourists travel all across Europe, staying in Switzerland for only a short time (much of which is devoted to buying watches), so the potential loss of business with the tempting exchange rate with the euro poses a real risk.
Under the Bulgari Protect guarantee, a watch that cost 4,000 Swiss francs before the Swiss National Bank dropped the peg between the Swiss franc and the euro will still cost 4,000 at any Bulgari point of sale, even though its price at current purchasing power parity is closer to 5,000 Swiss francs. The measure therefore equates to a 20% price reduction in euro terms and applies to all timepieces in stock.
The decision was validated by the LVMH group yesterday, although no other brands from the group have reacted as yet. From next Monday, special signs in all Bulgari points of sale, in English and Mandarin, will alert customers to this new measure.