Swatch Group on target for $8 billion in sales

Posted July 31, 2012 |

Swiss watch giant Swatch Group has announced a large increase in watch sales in the first half of 2012, and looks to be on target for a record year.

The company posted a 16.7 per cent sales increase across its 19 brands, and a 19.4 per cent jump in operating profit. Gross sales were also up 14.4 per cent to US$3.87 billion, which was a better figure compared to the same time in 2011.

It’s more good news for the company, which recently brokered a deal with the Swiss Competition Commission to further restrict supply of its watch parts. On a related note, a statement from Swatch Group credited the 23.2 per cent increase in production sales as a key factor in the positive results. An expansion in Swatch’s retail network also helped with the revenue growth.

However, there were some restraints on the Swiss company’s earnings, including exchange rates and the rising price of metals.

“The ongoing overvaluation of the Swiss franc and the high prices of gold and diamonds are continuing to put pressure on the margins for our brands, which traditionally have been very restrained with price increases,” the statement read.

Swatch Group was also positive about its outlook for the second half of the year, with several large-scale branding events tipped to spur sales of Swatch Group’s luxury range of watch brands.

Omega will continue its sponsorship of the Olympic Games as official time keeper, partner with the PGA of America at the Ryder Cup team golf tournament, and feature in the new James Bond film. Meanwhile, the Breguet and Blancpain brands have big release promotions scheduled for the Classique Chronométrie and Calendrier Chinois Traditionnel respectively.

The company believed these marketing activities would assist in achieving a record sales figure for 2012.

“The Group clearly sees more opportunities than risks for the future, despite some negative trends such as in the exchange rate and euro situation and a certain weakening in the high-end segment in parts of Greater China,” the statement read. “Its goal remains to achieve a record CHF 8 billion [US $8.18 billion] in sales for this year.”

More reading
Swatch Group continues restrictions