Rolexes fly off the shelves as Icelanders seek safe investments

REYKJAVIK, Oct 16, 2008 (AFP) - As Icelanders suddenly find themselves in the eye of the global financial storm many are seeking stability and solace in luxury goods like Rolex watches, which unlike their plunging currency are unlikely to devalue.

As Iceland in recent weeks has teetered on the brink of bankruptcy, Frank Michelsen, the Nordic country's only Rolex vendor, says he has seen a "significant increase" in sales.

He refuses however to reveal his figures for fear of being accused of taking advantage of the crisis.

"Customers want something they can hold in their hands," Michelsen told AFP.

"They don't trust figures on computers because they've already seen these figures vanish just like smoke," he said.

In the past year, the Icelandic krona has lost more than 40 percent of its value compared to the euro and the dollar, paving the way for the dire lack of liquidity that in recent weeks has caused the island's entire financial sector to collapse.

Most of Michelsen's customers are Icelanders who snap up a number of the luxury watches, which cost several thousand euros/dollars a piece.

Since the devaluation of the krona has yet to be fully reflected in shop prices, Icelanders who do not decide to hold onto their luxury purchases for future generations stand to make a pretty penny by re-selling the watches abroad.