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Leibish & Co

Tuesday, January 10, 2012

Swatch Group Reports Record Sales

Swatch Times Square store.

Swatch Group saw its 2011 gross sales increase 21.7 percent, year-over-year, to 7.14 billion Swiss francs ($7.5 billion) with December 2011 posting the strongest month in sales in company history.

The world’s largest watchmaker shrugged off the impact of the strong Swiss franc, which negatively affected sales by 10.8 percent. “Despite this extremely negative currency effect, sales in CHF increased by an impressive 10.9 percent over the previous record year 2010,” the company said.

The company also noted that “despite enormous pressure on margins due to the catastrophic currency situation,” it expects 2012 to be another good year for operating profit and net income.

Swatch’s Watches & Jewelry segment recorded an increase in sales of 26.1 percent at constant rates to 6.312 billion Swiss francs ($6.65 billion). Greater China was a very strong market bu the company said it “experienced significant growth” in all regions and price segments. “Investment in retail activities as well as numerous marketing offensives throughout the world contributed to these gratifying sales figures,” the company said.

The brand’s Production segment, where it provides watch components to other watch companies, reported a 32.6 percent increase in sales to 2.015 billion Swiss francs ($2.12 billion) due to “an enormous increase in demand for all types of components. Despite an expansion of production capacity, there were and still are major production bottlenecks,” the company reported.

The Electronics Systems segment mainly felt the effects of the overvalued Swiss franc against the US Dollar and the downtrend in certain key markets. Gross sales fell 16.3 percent to 336 million Swiss francs ($354.1 million).

“Despite the strongly negative currency impact during the course of the year and our traditionally defensive policy concerning price increases, Group Management expects good results for operating profit and net income,” the company said in its report. “The Swatch Group is confident of again generating qualitative growth in 2012, despite the ever more challenging comparison basis.”

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