The Swiss central bank has removed the peg to euro today, which instantly resulted in a market tumble, as the franc jumped almost 30% in value.
As Swatch CEO told Reuters:
Swatch Group chief executive Nick Hayek called the Swiss National Bank’s decision to discontinue the minimum exchange rate on the Swiss franc a “tsunami” for the Alpine country and its economy.
So far the Swatch Group is down by 10%, Richemont by 11%.
What does it mean for the luxury goods industry? Will the franc stabilise quickly? If not, we will definitely see price increases across the board. Will this also result in a great year for non-swiss watch brands, like Bremont? Time will tell.
The twittersphere reacted with the usual diligence:
There has to be something on here to fix this… pic.twitter.com/vfBpz3vc2Q
— Lady FOHF (@LadyFOHF) January 15, 2015
Did the SNB just ruin Easter? Lindt prices sure to surge as franc has risen by ~30%.
— Peter Spence (@Pete_Spence) January 15, 2015