Watch maker Swatch Group reports record CHF 4.5bn sales
02 Feb '06
3 min read
Watch maker The Swatch Group Ltd all divisions reported higher sales last year.
As in previous years, the most substantial increase was in the luxury watches segment, which continues to enjoy very strong demand.
Sales in the production and electronic systems divisions saw solid growth despite reduction of certain activities in the area of movements in the lowest price category.
There was a slightly positive currency effect in 2005 for the first time in several years, due in particular to positive developments during the second half of the year.
Their very selective hedging strategy with regard to foreign currency risks over the past year proved to be the right decision.
The decrease in unit sales of watches, movements and stepping motors by approximately 20 million units can be attributed to two main factors: on the one hand, to the planned and already announced reduction in the amount of movements in the lowest price category manufactured and sold in the Far East, and on the other hand, to the considerable fall in sales of stepping motors due to the decline in the US automobile market.
The Group's core business grew more than the other Group divisions.
The luxury segment, particularly the Breguet, Blancpain and Jaquet Droz brands as well as the Omega brand, saw substantial double-digit growth, with the Group winning significant market shares and strengthening its already solid market position.
The Group also achieved strong growth in the premium and mid-price segment, most notably during the second half of the year, and the additional marketing push in the first half of the year paid off, particularly for the Longines, Rado and Tissot brands.