Swatch reveals strong 2008 results

Swatch delivered a healthy set of full-year results for 2008, with watch and jewellery sales up 6.6% against a strong performance in 2007. Total group gross sales were up 4.3% year on year, despite a poor performance from Swatch’s electronic systems division where total sales dropped 15.9%.

Sales increased on all price categories of Swatch watches and jewellery last year, and the group said that its retail operations outperformed its wholesale division. However, it reported a slowing in demand, mainly affecting wholesale sales, even hitting luxury brands, in the last few months of the year.

At its production division, Swatch experienced an increase in demand for its Swatch and Flik Flak brands. The group has been investing in the division to expand its production capabilities but said that it is still struggling to deliver all of its back orders on time, particularly on expensive watch models.

Swatch said that it is “cautious but not pessimistic” about trading opportunities for 2009 and expects “a rather manageable recession”. The group has forecast a decrease in the first three to four months of this year compared with tough comparables from 2008.

Swatch expects trading to pick up in the second half of the year, which will lead to a “mild increase” in consumption and sales.

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