The Swiss watch industry in general, and some of Europe’s top watch groups specifically, announced record results for the year 2000.
The Swiss watch industry as a whole had an exceptional year in 2000, with exports topping 10.297 billion Swiss francs (about $6.3 billion) for the first time. That was a 14.4% increase over 1999, and marked 17 months of “uninterrupted growth,” says a report by the Federation of the Swiss Watch Industry. It cited sustained demand in major markets, the strength of the U.S. dollar against the Swiss franc, and the “growing fascination” of consumers with luxury products as major reasons for the gain.
Swiss watchmakers exported 29.9 million units in 2000, a 4.6% decline, reflecting a drop in quartz watches (down 5.1%). But value was up 14.1% to 9.3 billion francs (about $5.6 billion). The United States remains the top destination of Swiss watches, importing almost 2 billion francs (about $1.2 billion) worth of watches. Steel now accounts for more than four out of 10 watches exported by Switzerland. In 2000, 12.2 million steel timepieces-or 1.9% more than in 1999-were sold.
After a sluggish 1999, exports of 18k gold watches regained their sparkle (+6.9%). Bicolor (gold-steel) products were up 2.2%. There were downturns in lower segments of the market, including plastic and aluminum watches (-15.3%) and gold-plated watches (-2.2%). In other products, Switzerland exported 6.3 million movements (+15.9%), with a 25.9% increase in value at 126 million francs (about $76.5 million). Sales of clocks, small clocks and their components remained stable, up slightly at 90 million francs (about $54.6 million).
LVMH, the Paris-based group that is one of the world’s leading luxury goods conglomerates, reported record sales of 11.6 billion Euros (about $10.8 billion ), a 35% increase over 1999. In watches and jewelry alone, the Group posted sales of 614 million Euros ($572.5 million), surpassing the Group’s 2000 target of 600 million. The group report specifically cited “the success of new products [such as] Alter Ego by TAG Heuer, as well as best sellers such as Beluga by Ebel and Chronomaster by Zenith.” Key events in 2000 for LVMH’s watch and jewelry division included acquisition of Omas, one of the world’s leading luxury pen bands, establishment of LVMH’s Watch and Jewelry Division, and improvements in distribution.
The Swatch Group, headquartered in Biel, Switzerland, reported a record 4,263 billion Swiss francs (about $2,587,000,000) in sales, the first time it had topped four billion. Overall, its sales (finished watches, watch production, electronic systems, corporate services) increased 17.6%. Its sales of finished watches specifically grew 14.3% over 1999, propelled by what a company statement called the “driving force” of its several luxury watches-including Blancpain, Breguet and Omega-which grew more than 30%. The Group also added another top luxury brand, Germany’s Glashütte-Original, at the end of 2000. “All brands showed excellent growth, with the continued marked success of Omega deserving special mention,” says the report. The middle-range segment also showed double-digit growth, with Tissot producing “especially good results.” The Swatch Group attributed its record year to rising consumer confidence in Europe, the “rapid recovery” of Asian markets, a “flourishing U.S. economy,” and the Group’s “reinforced position in all markets.”