default-output-block.skip-main
BoF Logo

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.

Swatch Group Posts Its First Half Year Loss

The Swiss watchmaker reported a net loss of $327 million in the first half of 2020 and saw sales drop 46.1 percent.
Swatch store | Source: Shutterstock
By
  • Reuters

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.

"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

© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions

The Business of Fashion

Agenda-setting intelligence, analysis and advice for the global fashion community.
CONNECT WITH US ON
Voices2021
© 2021 The Business of Fashion. All rights reserved. For more information read our Terms & Conditions and Privacy policy.
Voices2021