Price increase at Stowa, Feb 3, 2020
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  1. #1
    Moderator at Large stuffler,mike's Avatar
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    Price increase at Stowa, Feb 3, 2020

    Newsletter came in with link to Stowa‘s latest announcement:

    Dear STOWA customer,

    Unfortunately we have to increase our prices for almost all models, effective Monday, February 3, 2020.

    The tense movement situation, which was mainly caused by a fatal decision of the Swiss Competition Commission, harms all watch manufacturers, because in 2020 and probably also 2021 ETA will not be allowed to supply movements to other companies.

    Since this has already caused the acquisition of movements to deteriorate in recent months (the decision of Weko took many months) and other components have also increased in price, we are now forced to raise our prices slightly.

    Here you can go directly to the website of ETA/Swatch Group with an explanation of the situation: https://www.swatchgroup.com/en/servi...watch-industry

    We will increase prices between 3 - 8%.

    Despite this increase, we still have one of the best price-performance ratios in the entire watch market.

    Through our direct distribution we avoid the middlemen and can therefore offer you unbeatable quality at still very fair prices!



    Your STOWA Team from the Black Forest.
    Kind regards
    Mike


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  2. #2
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    Re: Price increase at Stowa, Feb 3, 2020

    I'm not an analyst but I think Stowa is still an excellent quality-for-brand even if they went up 10%. I dont see this affecting Stowa as much as say, smaller brands like Sinn that dabble with ETA in a higher price category.


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  3. #3
    BRN
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    Re: Price increase at Stowa, Feb 3, 2020

    I completely understand the reasons behind the price hike. What is still unclear to me is what direction Stowa will be taking to source movements from here on forward. Take for example the Peseux/ETA 7001, are there any quality alternatives available now?
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    Re: Price increase at Stowa, Feb 3, 2020

    Quote Originally Posted by BRN View Post
    I completely understand the reasons behind the price hike. What is still unclear to me is what direction Stowa will be taking to source movements from here on forward. Take for example the Peseux/ETA 7001, are there any quality alternatives available now?
    I suspect that most brands will move to Sellita who will be the de facto monopoly for brands that don't manufacture their own movements.


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  6. #5
    Moderator at Large stuffler,mike's Avatar
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    Re: Price increase at Stowa, Feb 3, 2020

    Quote Originally Posted by JacobC View Post
    I suspect that most brands will move to Sellita who will be the de facto monopoly for brands that don't manufacture their own movements.


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    Unlikely. Currently Sellita wouldn‘t be able to boost production ro a level which could answer the increasing demand. The Sellita movements you order tomorrow will be delivered in 2021 if you are lucky.
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    Mike


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  7. #6
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    Re: Price increase at Stowa, Feb 3, 2020

    Quote Originally Posted by stuffler,mike View Post
    Unlikely. Currently Sellita wouldn‘t be able to boost production ro a level which could answer the increasing demand. The Sellita movements you order tomorrow will be delivered in 2021 if you are lucky.
    Oh really? So if that's the case who in the world can supply that many movements? China? I assumed Sellita was producing far more than that.


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    Re: Price increase at Stowa, Feb 3, 2020

    Unlikely. Currently Sellita wouldn‘t be able to boost production ro a level which could answer the increasing demand. The Sellita movements you order tomorrow will be delivered in 2021 if you are lucky.
    So what would the other options be for companies like Stowa, etc?

    Just curious as to who/what will fill this void.

    Thank you.
    Last edited by stuffler,mike; 4 Weeks Ago at 21:18.
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  9. #8
    Moderator at Large stuffler,mike's Avatar
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    Re: Price increase at Stowa, Feb 3, 2020

    Well, the disaster was foreseeable. According to Hayek ETA could neither accept nor confirm orders already in 2019. This will continue until mid-2020. Since ETA will need nine up to twelve months in advance, which means that ETA will not be able to deliver movements to third parties until autumn of 2021 at the earliest.
    Prudent manufacturers might have already contacted Sellita, Soprod, STP or Ronda last year or the year before. However, it seems questionable whether there is a real supply shortage. There is also a gray market and clever brands have built up inventory. Rumors say that wholesalers have built up their inventories as well. So you know somebody who knows somebody. Nevertheless, one is for sure, prices will go up.

    According to the Neue Züricher Zeitung ETA supplied 2 million movements to third parties in 2013, compared to 500.000 in 2019.
    Sellita already supplies around 1.200.000 mechanical movements. This corresponds to a market share of at least 60%. Questionable if they can increase production without a huge investment.
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  10. #9
    Member JacobC's Avatar
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    Re: Price increase at Stowa, Feb 3, 2020

    Sounds like a right mess Mike


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    Re: Price increase at Stowa, Feb 3, 2020

    Quote Originally Posted by JacobC View Post
    I suspect that most brands will move to Sellita who will be the de facto monopoly for brands that don't manufacture their own movements.
    That presupposes Sellita can increase capacity to cover them. Perhaps so, but not at the drop of a hat. And this means supplies for Sellitas will simply be that much tighter...so prices will rise.

    I can see where the Competition Commission doesn't trust Swatch, but Swatch was right here; even if you assert the action taken was reasonable, the timing was RIDICULOUS. And everyone's gonna pay. It also informs the other side of their idiocy...that all they may accomplish is to make Sellita the next monopoly.
    The truth is rarely pure and never simple.

    Oscar Wilde, The Importance of Being Earnest

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