As gold prices reach all-time highs, the prices of watches and jewelry are rising one after another. With the May wedding season approaching, domestic and international brands appear to be hastily raising their prices.
According to the industry on the 28th, the Italian luxury jewelry brand Pomellato will increase the prices of certain products sold in South Korea starting April 1. Pomellato is a brand that became more famous after singer G-Dragon appeared wearing a 'Iconica' ring worth about 10 million won on a variety show last October. Recently, it has also gained attention for wedding rings.
While the specific items that Pomellato will raise prices on have not been disclosed, some products are expected to increase by 4% to 8%. Some products are reported to have an increase of up to 10%. Ahead of the price increase, Pomellato has been conducting a 'Nudo Collection' pop-up store at the Shinsegae Department Store in Gangnam from the 18th to the 31st.
Swiss watch brand Omega will also raise prices of all products sold in South Korea by 3% starting April 1. This increase will apply not only to its main watches but also to accessories. The Bulgari brand under the LVMH Group will raise the prices of watch items by an average of 8% starting April 14.
Cartier raised the prices of some products sold domestically by approximately 6% from February 4, ahead of Valentine's Day on February 14. This marks the first price increase in three months since November of last year. Among the watches, the Tank Must small size increased from 4.69 million won to 4.99 million won, a 6.4% rise, and the Love Ring among jewelry saw an increase from 1.79 million won to 1.90 million won, a 6.1% rise.
Van Cleef & Arpels also raised the price of its popular model, the 'Vintage Alhambra Pendant,' by 4% last January. Tiffany & Co. raised its prices by about 5% last month after increasing them in January and October of last year. Damiani also raised the prices of products sold domestically by 8% to 10% last month.
Luxury brands have traditionally raised prices every new year. Even considering this, the potential price increase of up to 10% is evaluated as unusually large by the industry. This is attributed to the high exchange rate (depreciation of the won) and continued surges in gold prices, as gold is used in both jewelry and watches.
International gold prices have repeatedly reached all-time highs. According to Reuters, the spot gold price briefly hit $3,056 per ounce the previous day. The international gold price has broken its highest record 17 times since the beginning of this year.
According to Goldman Sachs, gold prices have increased by about 40% from early last year to this year. Goldman Sachs projects that by the end of this year, gold prices will reach $3,300 per ounce. The increased demand for gold purchases by the Central Bank is larger than expected, and investment through gold exchange-traded funds (ETFs) has also become more active. Particularly, the expansion of gold purchases by the Central Bank is seen as a structural change rather than a temporary phenomenon, according to Goldman Sachs' analysis.
Domestic brands are also experiencing continuous price increases. The Sejong Group's Didier Dubot implemented a price increase of about 9% at the end of last year, and J.ESTINA raised the prices of jewelry products using 14K gold by 10% to 15% last month. Eland's jewelry brand Lloyd also raised the prices of certain products, including rope women's rings, from the 5th. Golden Dew raised its prices from the 17th, the first increase in seven months since August of last year.
An industry official noted, "Domestic jewelry brands are adopting a strategy that emphasizes cost-effectiveness by selling at more reasonable prices than luxury brands, and despite the possibility of consumer attrition, they concluded that a price increase is an unavoidable reaction to external circumstances."