Swiss watch industry in shock

AT Geneva's annual luxury watch fair this week, Vincent Malissen was delighting in the intricacies of a gleaming timepiece from Vacheron Constantin, one of Switzerland's most prestigious watchmakers. The price starts at 288,000 euros (S$438,000).

But when it came to confirming whether that pricing, equivalent to US$334,000 at current exchange rates, would hold by the time the watch went on display next year, Mr Malissen, a marketing manager for the brand, threw up his hands in a gesture of "who knows"? So goes the angst of Swiss watchmakers, many of them reeling from the abrupt scrapping of a currency cap by the country's central bank last week. The move sent the Swiss franc soaring, making exports such as watches a good deal more expensive and pressuring companies to increase prices or book lower profits.

The currency shock has the Swiss companies especially perplexed because the country is the leading exporter of luxury watches and the sector was already feeling the effects of slowed sales to wealthy buyers in China and Russia, as well as competition from a new batch of smartwatches.