Swatch Group Sales Slide as Tourism Dries Up

RAPAPORT… Swatch Group, which owns Harry Winston and several prestigious timepiece brands, saw sales tumble last year as lockdowns around the world sapped demand, especially at tourist locations.

Revenue fell 32% to CHF 5.6 billion ($6.21 billion) in 2020, the Swiss company reported last week, noting that the decline was less severe in the second half than in the first. Sales of watches and jewelry fell 33% to CHF 5.34 billion ($5.92 billion), with other revenues coming from electronic systems and corporate activities. The group recorded a net loss of CHF 53 million ($58.8 million).

“Stores run by the Swatch Group in airports and at travel destinations are still suffering considerably from lack of tourists,” the company said.

As the owner of luxury watch brands including Omega and Tissot, the company is strongly reliant on high-end travel retail. This almost ground to a half in the second quarter of 2020 due to the coronavirus pandemic, and only recovered mildly in the second half. For example, Hong Kong, which derives much of its jewelry and watch revenues from tourists, remains quiet.

Swatch Group’s sales slumped 43% year on year in local currencies in the first half, and dropped 14% in the second, underlining the easing of the downturn in the latter part of the year. On another positive note, sales in mainland China grew by a double-digit percentage in the second half and for the full year, while US sales in December were in line with 2019 figures, Swatch Group added.

“Group management anticipates a strong catch-up in consumption worldwide for watches and jewelry in 2021, as has already been observed in mainland China after normalization of the health situation,” the company continued. “Demand will strengthen further as soon as travel restrictions can be relaxed or lifted.”

Image: A Harry Winston store in Chicago, Illinois. (Shutterstock)