Swatch sales plummet as company hopes for post-pandemic rebound
Swiss watchmakers have been hit hard by the pandemic this year as stores closed across Asia, Europe and the United States.
Keystone / Salvatore Di Nolfi
Swatch Group said it expected sales and profits to improve quickly in the months ahead after the coronavirus pandemic caused a “massive decline” in business for the first half of the year.
The watchmaking industry has been hit hard by the pandemic this year as stores closed across Asia, Europe and the United States.
Swatch recorded a drop in sales of -46.1% to CHF2.2 billion ($2.34 billion) in the first six months of 2020, it said in a statementExternal link on Tuesday.
It posted a net loss of CHF308 million, after a net profit of CHF415 million francs in the previous year.
However, Swatch said the group had returned to a positive operating result in June. It said it was observing very high demand in markets which had come out of lockdown, including double-digit sales growth in mainland China in May and June.
“The Group’s management is convinced that the sales and profit situation will improve quickly in the coming months, parallel to the further easing of Covid-19 measures in the countries,” it said.
“This positive outlook is strengthened by new products which will be launched in the second half of the year, as well as the lower cost base. This will lead to increased production capacity in the third and fourth quarter 2020.”
Swatch said it expected a positive operating result for the full year.
Job cuts
Despite the postive outlook, Bloomberg news agency reported on Tuesday that Swatch Group had cut 2,400 jobs, a record cull, and trimmed its store network due to the financial pressures.
The company said it had accelerated plans to shut stores permanently in Hong Kong as well as shops that sell its Swatch brand and Calvin Klein timepieces.
The job cuts were mainly at stores, as Swatch held on to production workers, Bloomberg reported. The company closed 260 stores and now has about 1,800.
More
More
Swiss watchmaking: where things stand
This content was published on
A primer on a key Swiss industry which exports its products all over the world.
This content was published on
Swiss International Air Lines (SWISS) will not be flying to Tel Aviv up to and including June 8 due to the current situation in the Middle East.
Italy and Switzerland agree on taxation of cross-border workers
This content was published on
The Italian government has approved the agreement with Switzerland on the taxation of so-called teleworking by cross-border commuters.
Nestlé water scandal: French state accused of cover-up
This content was published on
In the scandal surrounding the illegal treatment of mineral water in France, there was reportedly a cover-up of unauthorised practices by Swiss food giant Nestlé.
Air fleet of Swiss administration deemed too large
This content was published on
In the view of the Swiss Federal Audit Office, the size of the fleet should be reduced or the aircraft leased to improve cost-effectiveness.
MSC Cruises places CHF3 billion order for two more sea giants
This content was published on
Italo-Swiss company MSC Crociere has confirmed an order to the Saint-Nazaire Atlantic Shipyards for two ships worth around €3.5 billion.
Situation calm overnight above Swiss village facing avalanche
This content was published on
The situation in the Valais village of Blatten VS, which was threatened by a landslide, remained calm on Tuesday night. The anxiety continues, especially for the 300 evacuated residents.
This content was published on
A ruling by the Swiss competition watchdog is set to prolong a bitter battle among watchmakers over the delivery of moving parts.
This content was published on
Slower economic growth and a Chinese government anti-corruption campaign have cast a shadow over Swiss watch exports to China.
You can find an overview of ongoing debates with our journalists here . Please join us!
If you want to start a conversation about a topic raised in this article or want to report factual errors, email us at english@swissinfo.ch.