Zurich: Swiss watchmaker Swatch Group gave an upbeat outlook for 2010 on Wednesday, saying it could emerge in strong shape from the worst recession in decades after sales and margins rebounded in the second half of 2009.
The world’s largest watchmaker on Wednesday said that its annual gross sales fell 6.3% when adjusted for currency swings and 2008 divestments in 2009 to 5.4 billion Swiss francs ($5.23 billion), but was still the third best year in the group’s history.
Analysts at bank Wegelin said in a note the group, which is best known for its colourful plastic watches but also owns higher-end brands such as Breguet, Blancpain and Omega, had proven relatively resilient to the crisis thanks to strong brands and broad regional reach.
“The outlook is more than promising and profits should continue to be very strong if the world economy keeps recovering,” they said.
The group’s upbeat outlook adds to recent signs of the watch industry emerging from the most severe drop in demand it has faced in some 20 years as shoppers start to treat themselves again after months of restraint.
Earlier this week luxury goods group Richemont, which competes with LVMH and Hermes, posted forecast-beating sales over the Christmas period.
Swatch group said it was very confident of growth in sales and operating profit margins in 2010, adding that both were expected to have improved in the second half of 2009.
A promising trend can be identified, based on the excellent sell-through figures in January 2010 as well as the order entries for the months to come, the group said in a statement.
Sales in the group’s key watch segment fell 5.5% on an unadjusted basis, but largely outperformed Swiss Watch Federation export sales, gaining market share for the group in practically all segments, Swatch said.
The group said it had record sales for December, which was also the best month of the year.