Swatch First-Half Net Drops as Rich Buy Fewer Watches
Discussion
By Thomas Mulier
Aug. 14 (Bloomberg) -- Swatch Group AG, the world’s largest watchmaker, reported a 28 percent decline in first-half profit after consumers cut spending on Omega and Breguet timepieces.
Net income fell to 299 million Swiss francs ($279 million) from 416 million francs, the Biel, Switzerland-based maker of Tissot and Blancpain watches said in an e-mailed statement today. That beat the 259 million-franc median estimate of four analysts surveyed by Bloomberg. Net sales fell 17 percent to
2.35 billion francs.
The ranks of the world’s millionaires shrank 15 percent in 2008, the fastest rate on record, with North America sustaining the biggest wealth loss worldwide, according to a survey by Capgemini SA and Merrill Lynch & Co. Switzerland’s watch industry probably will lose about 3,000 jobs in the year through September, the biggest decline in more than two decades, a trade group said in June. Swatch Group Chairman Nicolas Hayek has said he aims to avoid job cuts in the company’s watch business.
“We remain bearish on the luxury sector and remain more negative on the watches and jewelry segment compared with fashion and leather goods,” wrote Kate Woolfoot, an analyst at Nomura in London, before the results were released. She said watches depend more on male buyers and bankers, who are reducing their spending.
Exports of Swiss watches fell 26 percent in the first half, according to the Federation of the Swiss Watchmaking Industry.
Swatch Group expects “slight” profit and sales growth in the second half as exports of Swiss timepieces rebound, Hayek told shareholders in May.
Cie. Financiere Richemont SA, the world’s largest jewelry maker, said May 15 it expected a “significant” decline in results in the three months through June and the outlook for the year is “negative.”
Swatch Group is shutting some Leon Hatot stores in Europe and scaling back the brand’s development as the deepest recession since World War II weighs on demand.
Aug. 14 (Bloomberg) -- Swatch Group AG, the world’s largest watchmaker, reported a 28 percent decline in first-half profit after consumers cut spending on Omega and Breguet timepieces.
Net income fell to 299 million Swiss francs ($279 million) from 416 million francs, the Biel, Switzerland-based maker of Tissot and Blancpain watches said in an e-mailed statement today. That beat the 259 million-franc median estimate of four analysts surveyed by Bloomberg. Net sales fell 17 percent to
2.35 billion francs.
The ranks of the world’s millionaires shrank 15 percent in 2008, the fastest rate on record, with North America sustaining the biggest wealth loss worldwide, according to a survey by Capgemini SA and Merrill Lynch & Co. Switzerland’s watch industry probably will lose about 3,000 jobs in the year through September, the biggest decline in more than two decades, a trade group said in June. Swatch Group Chairman Nicolas Hayek has said he aims to avoid job cuts in the company’s watch business.
“We remain bearish on the luxury sector and remain more negative on the watches and jewelry segment compared with fashion and leather goods,” wrote Kate Woolfoot, an analyst at Nomura in London, before the results were released. She said watches depend more on male buyers and bankers, who are reducing their spending.
Exports of Swiss watches fell 26 percent in the first half, according to the Federation of the Swiss Watchmaking Industry.
Swatch Group expects “slight” profit and sales growth in the second half as exports of Swiss timepieces rebound, Hayek told shareholders in May.
Cie. Financiere Richemont SA, the world’s largest jewelry maker, said May 15 it expected a “significant” decline in results in the three months through June and the outlook for the year is “negative.”
Swatch Group is shutting some Leon Hatot stores in Europe and scaling back the brand’s development as the deepest recession since World War II weighs on demand.
Gassing Station | Watches | Top of Page | What's New | My Stuff