Swiss watch exports, Swatch Group set new records

The value of Swiss watch exports in 2005 topped $9.3 billion, say new figures of the Federation of the Swiss Watch Industry. That’s a new record for the industry and 10.9 percent over the same period in 2004. Exports to the U.S. market, the top market for Swiss watches, rose 14.1 percent to $1.6 billion.

Meanwhile, the Swatch Group, the world’s largest watchmaker, said its total 2005 sales rose 8.3 percent to a record $3.5 billion.

Both said their record results were “propelled forward” by consumers’ demand for luxury timepieces, despite some less-than-favorable economic conditions, especially in Europe. They also predict continued good results in 2006. The announcements were made Thursday.

The Swiss industry’s results “outstripped” previous forecasts, the federation said in a statement, and “confirmed [Swiss watchmaking’s] excellent health.” Boosting year-end results for industry exports was an impressive 23.1 percent increase in December to $927.2 million.

“Despite the fact that the base of comparison will be very high.” The final result for this year’s exports “could exceed 2005 by as much as 5 percent or 6 percent,” the federation added in its statement.

For the Swatch Group, its 2005’s record sales were “the best result during [its] long and successful history,” it said in a statement.

Sales in its watch and jewelry division increased by 9.4 percent. Watches, its core business, grew more than its other divisions. “The luxury segment, particularly the Breguet, Blancpain, and Jaquet Droz brands as well as Omega, saw substantial double-digit growth, winning significant market shares” for Swatch in its “already solid market position.”

The Swatch Group also achieved “strong growth” in the premium and mid-price watches, particularly for Longines, Rado, and Tissot. Calvin Klein and other mid-price brands. The potential for growth in this segment, Swatch noted in its report, is “exceptionally high in America,” as well as Japan and China.

In the low-price segment, headed up by the Swatch brand, it met its targeted increase in sales, thanks in part to scaling down its range of products. It also cited “pleasing developments” in the jewelry division.

The Group, which will publish full results in several weeks, is optimistic about 2006. “The strong increase in sales in the watch segment (in particular with regard to high-end watches) will lead to a substantial increase in operative margins in this segment,” it said.

Overall, it expects its financial results in 2006 will be “considerably better than in the previous year,” and that the successful strategy and “rigorous” implementation used in 2005 will be the basis for “continued very solid growth in 2006.”

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