Swatch outperforms luxury market

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The Swatch Group luxury watch division was the best performing segment in the Group's 2001 results just released. Sales in the watch division increased by 0.7% in local currency values to SFr3,033m ($1,763m). Total Swatch Group sales increased 0.7% but this translated to a 2.6% decrease when adjusted for the higher value of the Swiss franc, especially against the euro and the yen.

Crucially, The Swatch Group said it expected net profits overall to be approximately 10% down in 2001. Like its competitors, Swatch has suffered from the global economic downturn and the sharp fall in tourism. Swatch's problems, however, appear less severe than those of LVMH which reported a profits slump of 20% or Richemont whose profits are forecasted at 33% down for the year ended 31 March.

Swatch Group said in a statement: "A major contribution was made by the strong trend in the luxury segment and the associated manufacturing activities. With the newly integrated brands Breguet, Léon Hatot, Jacquet Droz and Glashutte-Original, each of them with a rich tradition, the Group has set up an excellent starting base over the last two years. Together with Omega and Blancpain this will enable the Group to develop into one of the most important manufacturers in the top-end and prestige segment." In the medium-price segment, Tissot in particular achieved strong growth.

"With the inauguration of three new Breguet stores in Cannes, New York and Vienna; two boutiques each for Blancpain and Omega in Cannes and Paris; a Glashutte outlet in Frankfurt, plus the first multibrand store Tourbillon opening in Paris in late 2001, the foundations for a growing brand and market presence have been built," said the company.