Due to the sustained weakening of the Canadian dollar, many brands have been forced to adjust the Canadian Minimum Advertised Pricing (MAP) to compensate for the substantial loss in dealer margin. These adjustments have already been implemented by a number of brands, however Swarovski held off in the hopes that the Canadian dollar might strengthen - as a policy they dislike increasing retail prices. Unfortunately the Canadian dollar has been at a 1.43 to 1.47 CDN/US rate for many months, and given the severe impact on dealer margins, Swarovski has released their new Canadian MAP pricing, which will take effect February 19th, 2025.
Some may ask: "Swarovski is an Austrian company, so why does the US exchange rate apply?" In our market, Swarovski products are warehoused and distributed by Swarovski Optik North America (SONA) based out of Rhode Island, and Canadian dealers must pay/settle in US dollars. Thus if an invoice is $1000 US, we must pay that in the equivalent Canadian dollars, based on the prevailing exchange rate.
MAP is typically based on the US MAP multiplied by an established exchange rate multiple. Traditionally for brands, that rate has been 1.3 to 1.35, as the CDN/US exchange rate was within that bandwidth for years. Thus if an item has a US MAP for $1000 USD, and the exchange rate multiple is set at 1.3, the Canadian MAP would be $1300.
As the difference between the exchange rate chosen for Canadian MAP (i.e. 1.3) and the actual exchange rate that Canadian dealers must settle their invoices grows (i.e. 1.45), that difference has a direct impact on dealer margin. For many brands, Swarovski in particular, Canadian dealers have been losing 10 to 15% of their margin due to this difference. And believe it or not, we do not operate on very thick margins to begin with. When you add the fact that becoming a Swarovski dealer requires roughly a minimum $100,000.00 investment, there must be a reasonable return on that investment to remain a going concern.
Having been a Swarovski dealer for over a decade, this is the single largest price increase we have ever seen as it effectively moves MAP from a 1.3 to a 1.45 exchange rate factor. As an example, Swarovski EL Range TA 10x42 currently selling for $4289 CDN will now sell for $4999 CDN.
Hopefully the above helps to explain the coming price increase, and the increases in retails seen with other brands.
Some may ask: "Swarovski is an Austrian company, so why does the US exchange rate apply?" In our market, Swarovski products are warehoused and distributed by Swarovski Optik North America (SONA) based out of Rhode Island, and Canadian dealers must pay/settle in US dollars. Thus if an invoice is $1000 US, we must pay that in the equivalent Canadian dollars, based on the prevailing exchange rate.
MAP is typically based on the US MAP multiplied by an established exchange rate multiple. Traditionally for brands, that rate has been 1.3 to 1.35, as the CDN/US exchange rate was within that bandwidth for years. Thus if an item has a US MAP for $1000 USD, and the exchange rate multiple is set at 1.3, the Canadian MAP would be $1300.
As the difference between the exchange rate chosen for Canadian MAP (i.e. 1.3) and the actual exchange rate that Canadian dealers must settle their invoices grows (i.e. 1.45), that difference has a direct impact on dealer margin. For many brands, Swarovski in particular, Canadian dealers have been losing 10 to 15% of their margin due to this difference. And believe it or not, we do not operate on very thick margins to begin with. When you add the fact that becoming a Swarovski dealer requires roughly a minimum $100,000.00 investment, there must be a reasonable return on that investment to remain a going concern.
Having been a Swarovski dealer for over a decade, this is the single largest price increase we have ever seen as it effectively moves MAP from a 1.3 to a 1.45 exchange rate factor. As an example, Swarovski EL Range TA 10x42 currently selling for $4289 CDN will now sell for $4999 CDN.
Hopefully the above helps to explain the coming price increase, and the increases in retails seen with other brands.
