PARIS — Switzerland’s Swatch Group on Thursday said net profits fell 17.4 percent last year and announced “a cautious but not pessimistic outlook” for early 2009.
This story first appeared in the March 13, 2009 issue of WWD. Subscribe Today.
The maker of Omega, Swatch and Breguet watches saw net profits fall to 838 million Swiss francs, or $776.4 million at average exchange rates for the period. The group, whose brand portfolio also includes Jacquet Droz, Blancpain and Glashütte Original, said marketing costs for the Beijing Olympics impacted its operating margin in the second half.
As reported in January, the group’s full-year net sales inched up 0.5 percent to 5.68 billion Swiss francs, or $5.26 billion at average exchange, impacted by a drop in demand in watches and jewelry in the final months of 2008. “Even the luxury brands could not escape this unfavorable trend,” the company stated.
While allowing the first few months of 2009 will remain challenging, Swatch said it expects confidence to be restored in the second half. “This fundamental confidence and the long-term perspective of the group is underpinned by the daily monitoring of continued consumer demand experienced in our own retail stores, as well as the current size of the order books,” the firm stated.
Swatch is forecasting modest growth for the full year 2009.