Swatch’s announcement follows the decision by the Swiss National Bank last month to remove a cap on Switzerland’s local currency, which caused the value of the Swiss franc to soar. As previously reported by Jeweller, a number of Swiss watch companies expressed outrage at the time, fearing negative effects on exports.
According to Swatch, it would be responding to the “unfavourable currency situation” with price adjustments of between 5 per cent and 7 per cent for a number of its brands in selected markets.
The company has 18 watch brands in its portfolio including Omega, Longines, Tissot and its namesake, Swatch. The specific brands that would be affected by the price hike, however, were not disclosed.
The price increases were announced as part of key figures released ahead of the company’s 2014 full-year report. Swatch recorded gross sales of CHF 9.2 billion (AU$12.8 b) in 2014 – representing a 4.6 per cent increase on the previous year – as well as an operating profit of CHF 1.8 billion (AU$2.5 b).
Excluding production, gross sales in Swatch’s watch and jewellery sector increased 5.6 per cent, which was said to indicate a “clear gain…in market share by the Swatch Group” when compared to the 1.7 per cent increase in wristwatch exports recorded for the entire Swiss watch industry by the end of December 2014.
The financial statement maintained that Swatch was in a “very strong position” and that the company would generate “high single-digit growth in local currency despite the highly overvalued Swiss franc”.
The Swatch Group’s full annual report will be published on 12 March 2015.
Swatch to face off with Apple?
In addition, CEO Nick Hayek has told Bloomberg that Swatch will be releasing its smartwatch contender within the next three months.
During a recent earnings call, Apple CEO Tim Cook indicated that the first shipment of the Apple Watch would begin in April – meaning the debuts of the Swiss watchmaker and the US technology giant’s respective smartwatch offerings could coincide.
In the Bloomberg interview, Hayek said the smartwatch would be compatible with Windows and Android software, incorporate near-field communication (NFC) technology and allow users to make mobile payments.
What appeared to be a major point of difference for the Swatch smartwatch was that it reportedly wouldn’t need to be charged. This could be an advantage for the Swiss company given Cook indicated at a conference last year that the Apple Watch would require daily charging.
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