The Business of Fashion
Agenda-setting intelligence, analysis and advice for the global fashion community.
Agenda-setting intelligence, analysis and advice for the global fashion community.
ZURICH, Switzerland — Swatch Group, the world's biggest watchmaker, reported its first ever half-year loss on Tuesday but Founder and Chief Executive Nick Hayek said he looked forward to a quick rebound from the Covid-19 pandemic.
Swiss watchmakers have seen their sales slide due to store closures around the world and as Chinese tourists, their most important customers, could not travel and shop.
Swatch suffered a net loss of 308 million Swiss francs ($327 million) in the first half of 2020 on sales down 46.1 percent to 2.2 billion Swiss francs, the maker of Omega timepieces said in a statement released without advance notice.
Its shares, down 28 percent this year, were up 1.7 percent at 198.8 francs at 07.20 am GMT.
ADVERTISEMENT
"We are really looking forward to a very good second half of the year that will bring the group again into profitability," Hayek said in a recorded video message.
He said the company had returned to a positive operating result in June and was seeing very high demand in markets which had come out of lockdown, including double-digit sales growth in mainland China in May and June.
He said, however, that there were nearly no sales in Hong Kong at the moment due to political unrest and sales in the United States in July were still down 20-25 percent.
Vontobel analyst Rene Weber said in a note the group had lost market share and he expected negative growth in the second half.
Swatch Group closed around 260 stores and has reduced headcount by 6.5 percent since December.
The cancellation of big events such as the Olympic Games which the company sponsors helped save costs.
Swatch had already cut its dividend for 2019 and board members' fixed pay for this year.
By Silke Koltrowitz; editors: Michelle Martin and Brenna Hughes Neghaiwi
The company, under siege from Arkhouse Management Co. and Brigade Capital Management, doesn’t need the activists when it can be its own, writes Andrea Felsted.
As the German sportswear giant taps surging demand for its Samba and Gazelle sneakers, it’s also taking steps to spread its bets ahead of peak interest.
A profitable, multi-trillion dollar fashion industry populated with brands that generate minimal economic and environmental waste is within our reach, argues Lawrence Lenihan.
RFID technology has made self-checkout far more efficient than traditional scanning kiosks at retailers like Zara and Uniqlo, but the industry at large hesitates to fully embrace the innovation over concerns of theft and customer engagement.