PARIS — Currency shifts and sluggish spending dragged down Swatch Group’s first-half sales and lowered its profits.
Net income in the first half dropped 9.7 percent to $134 million. With tourism down and consumer spending sluggish, sales for the six months ended June 30 fell 6.6 percent to $1.31 billion. Dollar figures have been converted from the Swiss franc at current exchange. In local terms, the firm reported net profits of 186 million Swiss francs in the half, and a 17.3 percent decline in operating profits to 224 million Swiss francs.
The company said second-quarter sales were off 8.9 percent.
Analysts were disappointed with the results, which were sharply below expectations. Swatch highlighted improvements in traffic and sales in its stores and jewelers in July and August, in line with other companies. But Morgan Stanley luxury analyst Claire Kent was not moved and did not raise her 2003 forecast.
In a research note, she took Swatch to task for raising prices only 2 percent on its watches this year, less than competitors such as Bulgari and Richemont. “Swatch’s inability to raise prices should be viewed as a negative when valuing the stock,” she wrote.
Antoine Belge, analyst at HSBC in Paris, also questioned Swatch’s optimistic outlook for the balance of the year. “Luxury companies’ sales trends can only improve from a very depressed level in [the second quarter] on the back of a gradual recovery in Japanese travel and feel-good factor,” he wrote. “But Swatch is the luxury company the most exposed to Europe, which in our view will be the last geographic region to recover.”
On the positive side, Swatch said upscale brands Breguet, Omega and Blancpain showed gains, but allowed that its Swatch brand was slammed in May and June by a drop in tourism and currency impacts, and that Rado, concentrated in Germany, did poorly.
Taking the final spot on the mens’ portion of New York Fashion Week calendar next month will be none other than @tomford. Though he’s shown his men’s wear in New York in the past, this will mark the first time the designer has shown his men’s collection alone during New York Fashion Week: Men’s. His runway show will debut on February 6 at the Park Avenue Armory. #wwdfashion
London-based couture house @ralphandrusso has certainly been in the spotlight, having its dresses worn by @beyonce, Angelina Jolie, Meghan Markle in her engagement photos and more. For couture, Tamara Ralph focused on ornamentation — think: feathers with chain mail, jet embroidery and clusters of pearls and crystals. See the rest of the collection on WWD.com #wwdfashion #couture (📷: @giovanni_giannoni_photo)
Minnie Mouse celebrated her 90th birthday by getting her own star on the Hollywood Walk of Fame. For her celebratory luncheon, @coach’s creative director @stuartvevers dressed her in a custom made prairie dress, complete with Vever’s take on the polka dot – black sequined versions – under a cropped motorcycle jacket. The designer also put his own mark on Minnie’s classic red shoes, infusing the color with sparkles and adding some Coach crystals. “We chose colors that were very Minnie and also represented quintessential Coach elements,” said Vevers. #wwdfashion #nationalpolkadotday (📷: George Chinsee)
@nickjonas is unveiling his first-ever apparel collection through a partnership with John Varvatos. The limited-edition capsule, which makes its debut in spring, also marks the first time the designer has collaborated with anyone on a line. “The process in working with Nick is amazing. It’s inspiring to be around someone who is not only connected with the trade that they do, but also with what’s happening in the environment around him, and how that connects to what we do with style,” said Varvatos. (RG: @johnvarvatos) #wwdfashion
@margotrobbie steps out onto the red carpet wearing @miumiu. The actress is nominated for “Outstanding Performance by a Female Actor in a Leading Role” in “I, Tonya” at the #SagAwards. (📷: Stewart Cook) #wwdfashion
For @massimogiorgetti of @msgm, the Nineties are his favorite decade. “They had a huge impact on my personal growth. What I like of the Nineties is that they are not so precise in terms of style as other decades…there was actually a bit of everything,” he said. As seen on MSGM’s Spring 2018 show: tie-dye and a bit of grunge, two styles that are synonymous with the decade #wwdfashion #wwddecades (📷: @kukukuba)