Switzerland’s Swatch Group said it expects to post higher profits for 2009 after registering a “significant” rebound in sales in the second half of the year.
Swatch, which expects to publish its annual report on March 11, said sales fell 6.3 percent in the second half of the year at constant exchange rates, exceeding its earlier forecasts and making 2009 the third-best year in the company’s history. This followed a reported 15.3 percent drop in sales in the first half of the year.
“While the first half saw a significant decline, sales picked up in the second half and just exceeded — in local currencies — sales of the second half of 2008,” Swatch said. “This encouraging trend led to a phenomenal record month of December with strong Christmas sales.”
The world’s largest watchmaker, best known for its colorful Swatch watches, said 2009 sales fell 9.1 percent, or 7.3 percent at constant exchange, to 5.42 billion Swiss francs, or $5.01 billion at average exchange rates for the period. The Biel-based company also manufactures movements and components for other watchmakers.
Watch sales in 2009 decreased 7.7 percent, or 5.5 percent at constant exchange, to 4.43 billion Swiss francs, or $4.09 billion. Exports of Swiss timepieces have plummeted as consumers sharply cut spending on luxury watches and retailers slashed inventories. Swatch said the U.S., Japan and Spain remained weak in the second half, but the company had benefited from its presence across all price segments, noting that midrange price points performed well despite the global economic downturn.
The company said it expected demand to pick up at the wholesale level, too, as retailers start to normalize reduced stock levels.
Looking forward, Swatch said it expected a positive impact on sales from Omega’s position as official timekeeper of the Winter Olympics, due to begin Feb. 12 in Vancouver. The brand also expects positive returns from the opening the Swatch Art Peace Hotel in Shanghai to coincide with the World Exhibition, scheduled to run May 1 to Oct. 31.