PARIS — Swatch Group, the world’s largest watchmaker, posted record sales in the first half, as strong demand for its timepieces across all segments and regions allowed the company to snatch market share from competitors.
The Swiss group, which owns 19 brands ranging from luxury Breguet timepieces to affordable plastic Swatch watches, said net profit rose 54.5 percent to 465 million Swiss francs, or $430 million, in the first six months of the year, despite a rise in gold prices and a strong Swiss franc.
All conversions are made at average exchange rates.
The Biel-based company was shaken in June by the unexpected death of co-founder Nicolas Hayek, but acted quickly to reinforce its leadership by naming his daughter, Nayla Hayek, as chairwoman. Her brother, Nick Hayek, remains chief executive officer.
Swatch Group reported gross sales of 3.03 billion Swiss francs, or $2.8 billion, marking the first time revenues have topped the 3 billion franc mark in the first half of the year. This represented a rise of 24.1 percent in organic terms and of 22.2 percent at constant exchange rates.
“Growth has been solid in July, and we expect a strong result for the second half of 2010 in terms of both sales and profit,” Swatch said. “The major challenge will be to quickly overcome the capacity bottlenecks which already exist in some production areas.”
The increase was driven by healthy sales of watches and jewelry, which were up 32.9 percent in organic terms to 2.57 billion Swiss francs, or $2.38 billion, in the first half.
Even stripping out the negative impact of exchange rate volatility, the sales increase — at 30.6 percent — beat the overall increase of 19.7 percent in foreign sales of Swiss watches during the period, according to data published by the Federation of the Swiss Watch Industry.
During the period, the group continued to expand its retail business by opening boutiques in strategic locations, such as the Swatch Art Peace Hotel in Shanghai, which houses flagships for Swatch, Blancpain, Breguet and Omega.
Swatch Group also manufactures movements and components for other watchmakers.
Gross sales for its production segment fell 5.1 percent to 761 million Swiss francs, or $704 million, as orders for watch parts lagged behind demand for finished watches. The group said prospects for the second half were improving as order books had since matched, and in some cases exceeded, prior-year levels.
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