News The International Watch Company (IWC) has just recorded the most successful financial year in its history. Turnover for this men's watch specialist grew from 92 million Swiss francs in 1998 to 115 million last year, an increase of 27.8%. The number of watches sold surged by 13.4% to 39,000 units. According to a press release, the operating profit made remarkable gains. A strong indicator of IWC's excellent 1999 performance was the fact that it recorded growth above the already very impressive average of the whole Swiss watch industry.
These outstanding figures were the result of a team effort, with most of IWC's watchmakers working a six-day week. The number of employees rose by 3% to 350, with more posts in the finishing department forecast for this year. Furthermore, the company will be renting extra space in adjoining premises to provide greater comfort for the staff and to improve the quality of the work.
IWC distinguished itself on every important market, particularly in Asia where turnover soared by 29%. This region, whose principal markets are Hong Kong, Japan and Singapore, now accounts for one quarter of all IWC's turnover. The brand's traditional markets, Switzerland, Germany, Italy and Austria, also recorded highly satisfactory results. In the United States, a secondary IWC market until now, turnover doubled during the last accounting period.
All the company's luxury product lines benefited from a global increase in demand for high quality watches. Pilot's watches were the main contributor, accounting for 34.3% of turnover. The Da Vinci, an IWC classic, accounted for 22.9% and the Portugaise luxury watch line for 26.6%. GST sports watches also performed well, with 13.8% of total 1999 sales. It should be pointed out that this significant increase in turnover was achieved with the brand's existing product range; in other words, no new models were launched. It is the company's philosophy to constantly review each product to ensure that there is symbiosis between the latest technologies and historic inventions drawn from IWC's rich heritage.
The management attributes these unprecedented results to a combination of facrors. First and foremost, to greater public awareness of the quality of its products. IWC's new, more striking advertising image has given the brand a considerably higher profile and introduced it to a much broader public. Furthermore, distribution has been improved by reducing the network of worldwide distributors and working more closely with the 700 selected sales points, 90 of which are in Switzerland. And, finally, the collection has been reduced from 235 to 175 versions, thereby clarifying the brand's product range for the end consumer and facilitating management for the sales points.
Growth looks set to be just as positive in the short term. With the number of orders on the books on 1 January exceeding January 1999's figures by 40%, Mr Michael P. Sarp, IWC's managing director, has predicted continued growth. As the company relies on a broad production and distribution base rather than a few isolated markets and products, its future looks rosy indeed. For the year 2000, it is predicting growth of around 10% to 127 million Swiss francs, a double-figure growth rate which should be maintained in the medium-term.
To realise this, IWC will concentrate on three areas. First, it will continue using the new advertising strategy it launched last year to preserve the brand's reputation at the highest level. Second, the distribution network will be more selective and focus on core markets. Third, production capacity will continue to be developed through the expansion and optimisation of internal processes.
March 03, 2000