Swatch profits slow as attacks hit key markets
Jul 21, 2016
Swatch Group, the world's largest watchmaker, posted a 52-percent fall in first-half profits on Thursday, with sales hurt by declining tourism after attacks in France and Belgium. The Swiss-based company also said revenues were down in its crucial market of Hong Kong.
The entire luxury watch sector has seen trimmed sales on the island since Chinese authorities introduced new anti-corruption measures in 2013 that included curbs on extravagant gifts. A company statement put first-half profits at 263 million Swiss francs (267 million dollars, 242 million euros), 52 percent lower than during the same period of 2015.
"The situation in France and Belgium will remain difficult," with less tourists travelling to the key markets following deadly attacks in Paris, Nice and Brussels, Swatch said. But the company claimed the outlook for the second half of 2016 was promising, pointing to "clear signs of tourism revival," in Spain and Italy. Swatch's Omega brand is also a flagship sponsor of the Olympics in Rio de Janeiro, which start on August 5. The company said it was expecting a "boost" during the Games.
The first three weeks of July saw strong sales in mainland China, further fuelling hopes that the company could record "an annual result closer or equivalent to the previous year," the statement added. But Patrik Schwendimann, an analyst at Zuercher Kantonalbank in Zurich, told Bloomberg news agency that "to achieve last year's results for the full year would require a bigger miracle." (AFP)
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