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WatchesAug 15, 2016
Swatch says sales up, retail business strong
Swatch Group reported Thursday that despite pressure from the rising value of the Swiss franc net sales increased 4 percent in the first half of 2015 and its retail business was strong.
Swatch Group said that sales increases were recorded in most regions, with the exceptions being South Korea and Hong Kong, both of which have experienced slowdowns in tourism. Meanwhile, mainland China continues to grow for the watchmaker, particularly for brands in the high and middle range.
While sales managed to stay ahead, the “overvalued” Swiss franc did have a negative effect on earnings for the company.
Operating profit reached $796.4 million in the half-year period, which is 8 percent below the first half of 2014 due to “significant currency shifts in the recent past,” Swatch Group said. The surging Swiss franc also resulted in a lower net income for the watch company, falling 19 percent year-over-year to $573.1 million.
The Watches & Jewelry segment (including production) of the business was up 3 percent at constant exchange rates. This is compared with the declining export of watches overall for the Swiss watch industry, down 1 percent through the end of May.
Swatch also reported good growth for its retail business. In the United States, the Swatch brand quintupled sales of its mechanical watches.
Despite the rising value of the Swiss franc, Swatch said it anticipates a strong second-half performance.
It has a number of new product launches slated for the second part of the year, including Omega’s new James Bond edition, the Omega Master Co-Axial with METAS certification, and its two Swatch-brand smartwatches, the Touch Zero One and the Swatch NFC (near-field communication.)
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