The Swiss watch industry, led by some of Europe’s top watch groups, announced record results for the year 2000.
The Swiss watch industry’s exports topped 10,297 billion Swiss francs (about $6.3 billion) for the first time. That was a 14.4% increase over 1999’s figures and marked 17 months of “uninterrupted growth.” A report by the Federation of the Swiss Watch Industry cited sustained demand in major markets, the strength of the U.S. dollar against the Swiss franc, and consumers’ “growing fascination” 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 Swiss francs (about $5.6 billion).
The United States remains the top destination of Swiss watches, importing units valued at almost 2 billion francs (about $1.2 billion). In Asia, most countries’ imports fell to the levels seen prior to the 1998 economic crisis, says the report. In Europe, France, Great Britain, and Italy were the major importers.
Steel now accounts for more than four out of 10 watches exported by Switzerland. In 2000, 12.2 million steel timepieces were sold—1 million, or 9.2%, more than one year previously. After a sluggish 1999, exports of
18k watches regained their sparkle (+6.9%) and bicolor (gold-steel) products were up 2.2%. There were, however, 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’s 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 the acquisition of Omas, one of the world’s leading luxury pen brands; 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 $2.6 billion) in sales, the first time it had topped four billion. Overall, its sales—including finished watches, watch production, electronic systems, and corporate services—increased 17.6%.
The company’s 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.”