Following the declarations by the Swiss Watch Federation with marginally growing fare numbers and record results by LVMH for the year finished December 31st, Swatch Group has quite recently reported its 2019 outcomes, which aren’t as sure as its competitors and the entire market. At CHF 8,243 million, the group net deals are down 1.8% at steady trade rates and down 2.7% at current rates. The operating outcome is down 11.4% at CHF 1,023 million.
Luxury brands have felt the effect of the complex circumstance in Hong Kong. The Chinese Special Administrative Region is the biggest market for Swiss watch sends out – about 12% of the total fares in 2019. Swatch Group comments that its presentation was especially influenced by the circumstance. The drop in deals in Hong Kong for the subsequent semester alone was roughly CHF 200 million. Therefore, the benefit of the Swatch Group is down, with an overall gain of CHF 748 million, – 13.7% to the earlier year. Excluding Hong Kong, deals increased in the second 50% of 2019 by 5% at steady trade rates.
As a comparison, Swiss Watch Exports have grown by 2.4% in 2019. The fare measurements indicate a general positive exhibition for the very good quality fragment yet a passage level section under tension. Specifically, the smartwatch development appears to come to the detriment of the lower-valued Swiss watches. With its 18-image portfolio, Swatch Group is the most presented player to the low/mid-end fragments among industry goliaths, with brands like Swatch, Tissot or Hamilton.
A key component of Swatch Group’s financial proclamations can be seen on the inventory side (which includes components, developments and watches), as the group reports inventories of CHF 6,852 million – down 1% compared to 2018, yet at the same time very high.
For 2020, Swatch Group expresses that “group the board anticipates solid development in 2020 in all business sectors in nearby money, except for Hong Kong SAR“.
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