News The Swatch Group, flagship of the Swiss watchmaking fleet, is making quite good headway in today’s choppy economic waters. Proof in the first half-year of 2002.
With sales of 1,944 million and a net profit of 206 million during the first half-year of 2002, the Swatch Group saw both figures fall by respectively 3.9 and 13.1 %. In view of the economic situation, and particularly the expensive Swiss franc which is penalising export industries, these results are however entirely satisfactory. And they confirm the strength of Nicolas Hayek’s group. More especially in its core activity, since its 18 watchmaking brands saw their sales increase by 1.1 % in local currencies over the first six months (- 3.4 % in Swiss francs), while profitability in the watch movements and components sector increased (+ 13.2 %) despite a slight decline in turnover (- 2.5 % for internal deliveries and – 2.3 % for deliveries to third parties).
As a result of a slump in orders, and above all strong pressure on prices, the electronic systems sector, in particular companies supplying the telecommunications market, is however going through a difficult phase, with sales down by 16 % and operating profit adrift by 34 %.
In local currencies, all watch brands, from the base to the top of the pyramid, showed a slightly positive trend. The same holds true, with only a few rare exceptions, for sales by country. In tourist centres however, conditions remain precarious.
The development of jewellery collections, whether at Breguet and Léon Hatot, Omega or Swatch, is progressing successfully and according to plan.
In terms of retail sales, the group is continuing its expansion with the recent opening of a Blancpain store in Paris and a Breguet point of sale in London. Not to mention the conversion of the old Columna stores in Basle and Lugano in line with the Tourbillon concept. Recently, Lausanne also acquired a similar point of sale (see Press Review section), while Bangkok and Milan will shortly be home to Omega stores.
For the end of the year, the Swatch Group says it is "very confident" despite the lack of transparency in financial markets and the impact this could have on the world economy. The company refuses however to hazard any figures, but is renewing its commitment to maintain a policy focused on the long term through the targeted development of its industrial base.
For the Swatch Group and the industry as a whole, there can be no doubt as to the importance of the weeks ahead. Will the commemoration of the first anniversary of the attacks of 11 September allow consumers to exorcize their fears regarding the planet’s economic future or, on the contrary, will it reinforce them? For the answer, watch this space in three months time, when we draw up the balance sheet of Christmas sales!
September 12, 2002