Patek Philippe

and the luxury watch market is anything but perfectly efficient.

 

My concern is not for the prices per se but more the viability of Patek.  To me it looks like they're pursuing a very high risk strategy which risks alienating all their established markets.  let's be honest, most of the sales of patek's go to Asian clients regardless of where the watch is retailed.  Domestic European and American demand is almost certainly down and having spoken to dealers in the UK I know they're very concerned.

When the Euro-US  travelling Asian market disappears simply because either tastes change or more likely the punitive luxury taxes are removed where will this leave the AD's?  The US and Euorpean domestic consumer will already have moved to a substitute such as Lange or VC further eroding the prestige of Patek.

 

When bubbles burst companies get killed...

I see this quite differently.    I think Patek's hands are essentially tied here.   If they don't update local prices to reflect current exchange rates then they will have a big arbitrage problem.    That is, the grey market would run wild.   Where the prices are essentially cheap, the grey market would buy up watches and move them to areas where prices are essentially high.   At the most basic level, it is the relative government's fiscal policies which are the driver for exchange rate trends (or at least that's what the economists say).

Louis Vuitton does the same time of price equalization between markers that use different currencies.

Back in the day, when Patek timepieces were about 12% less when priced in the German Mark, if you get a discount in Germany the overall price was very attractive. As an example, Patek Nautilus timepieces in steel could be purchased for around $6,000 new in box from AD.