Swatch Group reports 'best results of all time'

-- JCK-Jewelers Circular Keystone, 1/22/2007 7:40:00 AM

The Swatch Group AG, the world’s largest watchmaker, posted a 12.3 percent gain in gross sales in its 2006 sales, totaling 5.05 billion Swiss francs (about $4.04 billion). This will lead to an above-average increase in operating profits, which will be announced later, it said.

These are the “best Group results of all time,” said the Swiss watchmaker’s Jan. 22 announcement, and the first time it has topped five billion in gross sales.

The Group, headquartered in Biel, Switzerland, expected 2006 to be a record year, and that “this pleasing trend to continue in 2007," the statement said.

All Group segments reported record sales in 2006. "The worldwide economic boom is reflected in these more balanced growth trends," said the Swatch Group.

The most substantial sales growth, though, was in the luxury watches segment, with the Breguet, Blancpain, Glashütte Original, and Omega brands getting special mention for “growth well into double figures.”

Strong growth was also achieved by brands in the premium and mid-price segments, with additional market share being won in a fiercely-contested market by the Longines, Rado, Tissot, and Calvin Klein brands. In the mid-price segment, Hamilton was among those making “excellent progress.”

In the low-price segment, the Swatch brand is “enjoying significant growth and posting very pleasing results.”

The watch sector’s growth was strongest in Asia, followed by the United States and Europe.

The Group’s jewelry division also achieved solid growth rates and contributed to the increase in sales. The watches and jewelry division’s sales came to 3.91 billion francs (US$3.1 billion).

The Group’s production division benefited directly from the strong demand in the watch division. The favorable product mix towards more complex mechanical watch movements enabled it to achieve strong growth.

A decrease in unit sales of watches, movements and stepping motors by approximately 55 million units was attributed mainly to the strong reduction in watch movements in the lowest price category manufactured and sold in the Far East. Production in Malaysia has been halted.