Switzerland’s Swatch Group said it just recorded its second-best month of January in terms of sales, and that the outlook for the rest of 2010 was “excellent.”
The word from the world’s largest watchmaker, which also reported net profits fell 8.9 percent in 2009, added to recent evidence the watch sector is nearing a turnaround after seeing demand wilt during the recession.
Swatch, whose brands range from handmade Breguet timepieces to brightly colored plastic Swatch watches, posted net profits of 763 million Swiss francs, or $705 million, last year. The net margin remained unchanged versus 2008 at 14.8 percent. All dollar figures are calculated at average exchange rates for the period concerned.
The Biel-based company reported last month that sales, excluding the 2008 divestments of Sokymat and Michel, fell 8.1 percent in 2009. This compares with an overall 22.3 percent drop in Swiss watch exports during the same period, according to the Federation of the Swiss Watch Industry.
Swatch said it was “very confident” of recording further organic sales growth and improved margins in 2010.
“The main reasons for this positive outlook are the excellent start in 2010, increasing order entries as well as the improving economic environment and market confidence worldwide,” the company said.
Operating profit fell 24.9 percent to 903 million Swiss francs, or $834 million, from 1.2 billion Swiss francs, or $1.11 billion, in 2008.
The group’s operating margin fell to 17.6 percent in 2009 from 21.2 percent the previous year, but showed signs of improvement in the second half. “Taking into account that foreign currencies as well as the gold price, an important raw material for the group’s watches, did not develop in our favor, this represents a very positive achievement,” Swatch noted.
The figures come on the heels of positive results from other luxury goods firms such as Burberry, Hermès and Richemont. Analysts Bernstein Research said the operating profits of luxury goods companies should see an improvement more marked than the one recorded in the early and mid-Aughts. It cited cost-cutting efforts, the weakening euro and a restrained approach to mergers and acquisitions as positive factors.
In the medium-term, however, prospects for the sector are more subdued than in the past decade, as high debt — both public and private — was expected to lead to slower output growth. “There is a risk of hiccups between a likely short-term rebound and a more subdued medium-term growth prospect,” Bernstein said in a report published Tuesday.
Harrods plans to remove the famous statue of Princess Diana and Dodi Al Fayed from the bottom of the Egyptian escalators and hand it back to Mohamed Al-Fayed. “We are very proud to have played our role in celebrating the lives of Diana, Princess of Wales and Dodi Al Fayed at Harrods and to have welcomed people from around the world to visit the memorial for the past 20 years,” said Michael Ward, Harrods managing director. “With the announcement of the new official memorial statue to Diana, Princess of Wales at Kensington Palace, we feel that the time is right to return this memorial to Mr. Al Fayed and for the public to be invited to pay their respects at the palace.” More on the news, with reporting by @loreleimarfil, at WWD.com. #wwdnews
@prada is introducing a new project at its men’s fall 2018 show this Sunday: “Prada Invites.” The fashion house invited four celebrated creative minds – @ronanaerwanbouroullec, Konstantin Grcic, @herzogdemeuron and @rem.koolhaas – to each create a unique item with its iconic nylon material. The designs will be unveiled on the runway show, which will take place at the company’s warehouse in Viale Ortles 25. #wwdfashion #mfwm (📷: @martinocarrera)
@kering_official is spinning off its stake in puma in an effort to focus on its luxury brands, the brand operator announced yesterday. “We are proud to have supported the turnaround of Puma, which now has unrivaled capabilities to take full advantage of the specific dynamics of its global markets and is poised to achieve substantial growth,” said François-Henri Pinault, Kering’s chief executive officer and chairman. Artémis will become a “long-term strategic shareholder” of Puma with a 29 percent stake. #wwdnews #wwdfashion (📷: @jilliansollazzo)
The fashion world mourns for celebrated street style photographer, Nabile Quenum, who died at age 32 in Paris.
Quenum, creator of the fashion blog “J’ai Perdu Ma Veste,” was a fashion week fixture, and regularly shot for New York magazine’s The Cut, among other outlets, and brands such as Louis Vuitton, Moncler and Adidas. He was also actively involved in the #NoFreePhotos initiative, which kicked off in the fall. Read more about Quenum in @kbsmoke's story on WWD.com. #wwdnews
@verwanggang and @maisonladuree have teamed up on a dessert collab called Vera Wang Pour Ladurée. The collection, which launched this week, features a specialty macaroon, as well as a wedding cake inspired by one of the designer’s gowns. “I could not imagine a more delicate or sophisticated creation to grace any couple’s celebration,” said Wang. #wwdfashion