UPDATE 2-Tag Heuer latest luxury brand to tweak prices on forex
(Adds details, background, management comments)
By Astrid Wendlandt
BASEL, Switzerland, March 18 (Reuters) - Tag Heuer, French luxury group LVMH's biggest watch maker, plans to freeze prices in some markets and cut them elsewhere in a move to balance out the impact of the recent jump in the Swiss franc and the euro's weakness.
Several luxury goods makers, including fellow watch makers such as Richemont's Cartier as well as privately owned Patek Philippe and fashion house Chanel, have resorted to similar measures to erase major price discrepancies between markets resulting from currency fluctuations.
Tag Heuer said prices would drop an average 8 percent in Switzerland, China, the United States, the Caribbean, and Central and South America, 7 percent in the UK and 13 percent in Hong Kong, but it would not raise prices in the euro zone, Japan and Singapore.
"Tag Heuer is seizing the opportunity of the recent appreciation of the Swiss franc to rebalance its international price policy," it said in a statement on Wednesday.
Brands are concerned that price differences, which can be more than 30 percent between some Asian and European markets, encourage parallel trading - when luxury goods are sold outside of approved retail networks.
Brands say some of their luxury products bought in Paris or Milan are sold back in China or on the Internet at prices lower than in their boutiques and risk creating confusion between original items and counterfeits.
Several analysts said that the round of price cuts could have snowballing effects, prompting rivals in the same price and product category to make similar moves. Continuación...