GENEVA — The Swatch Group, the world’s biggest watchmaker, expects sales in 2012 to increase in “the upper level of single digits” chief executive officer Nick Hayek said Thursday.
“The overall situation for the group is good, growth in all segments, and in all regions of the world,” he added.
The luxury range includes brands such as Breguet, Blancpain and Omega; the middle segment has lines such as Tissot, Balmain and Certina, and the low-end features Swatch and Flik Flak.
Hayek also indicated prices for top of the range brands “might have to increase by 4 to 5 percent” this year because of the continued strong Swiss franc vis-à-vis other major currencies such as the dollar and the euro, and also because of increases in gold.
Related Articles
For middle-segment brands, he noted, the group may decide not to have any price increases. Instead, the group will try to reduce costs “to keep our margins and not lose market share,” he said.
You May Also Like
In 2011, the group increased prices in the euro zone by around 8 percent, and in the dollar area by 3 or 5 percent, depending on the brand, because of the strong franc, Mark Hayek, a member of the management board, told WWD.
Last year, the group posted sales of 7.1 billion Swiss francs, or $8 billion, up 10.9 percent on 2010, and a net profit of 1.2 billion francs, or $1.4 billion, up 18.1 percent.
Nick Hayek said, in January and February, the group had growth “that was in double digits again,” but added, “I would be careful not to just extrapolate the first two months for the whole year.”
Hayek was also upbeat about growth in the U.S. market.
“Everybody is talking about China, which I understand, but when I look at the United States, where we started two years ago to make our investments, we have growth rates that last year were 45 percent, and at the beginning of the year we continue to grow over 50 percent.”
With regards to the robust China market, Hayek acknowledged that in the very, very high end there’s, at the moment, “a slowdown,” but added one needs to be careful.
“The demand was perhaps 50, 60, 70 percent higher, every time we could not cope with production.…We have seen a drop. It means the demand now is rather in the area of 15 or 20 percent. We still can’t cope with the demand.”
Perhaps there is a switch to the middle and lower segment, he noted, adding the increases in January and February have been dramatic for brands such Longines, Tissot and Swatch.
Looking ahead, Hayek said the group plans to open about 100 stores worldwide this year, including three or four in the U.S. In addition, expansions in innovation, production, retail outlets and customer support are likely to see the group create 1,000 jobs this year.
More than half of the jobs are to be added in Switzerland as a result of planned expansions in production of some luxury brands, in dials and components, and the establishment of a high-tech logistics center in Le Locle, Switzerland, that will handle 14,000 to 20,000 watches a day.