ZURICH • Higher gross sales clocked within the first half of the 12 months may have prompted Omega maker Swatch to shock the watch trade just lately when it known as time on its participation in Baselworld.
The Swatch Group is pulling out of the annual watch and jewelry commerce honest, an event that has been celebrated within the luxurious trade calendar for a century.
Swatch, crucial exhibitor at Baselworld, joins different manufacturers equivalent to Girard-Perregaux and Ulysse Nardin which might be ticking off the honest – held yearly in March – from their advertising and marketing calendar, citing excessive prices and inadequate returns.
Only 650 exhibitors confirmed up at Baselworld 2018, a 50 per cent decline from the 12 months earlier than. A decade in the past, there have been 2,087 exhibitors.
The strain on advertising and marketing has additionally been decreased as Swiss watchmakers have seen gross sales and margins recuperate this 12 months after a chronic downturn attributable to a meltdown in Chinese demand.
Swatch Group mentioned it anticipated robust demand in Asia and America to maintain fuelling gross sales progress this 12 months after first-half web revenue bounced again from weak year-ago ranges.
The company, which took fewer cost-cutting measures to guard margins than peer Richemont, was hit tougher through the lean years, and is now poised for a stronger restoration.
“The month of July continues the very constructive pattern.
“The second half of the year offers excellent opportunities for continued strong growth and further expansion of market share,” mentioned the world’s greatest watchmaker whose merchandise vary from the costly Breguet to extra reasonably priced Longines and plastic Swatch timepieces.
Sales rose 12.6 per cent to four.266 billion Swiss francs (S$5.83 billion), pushed by “very high growth rates” in Asia and a “double-digit sales increase” in North America, whereas enlargement in Europe was extra variable.
But analysts pointed to more difficult situations within the second half, equivalent to commerce tensions that might increase tariffs, and mentioned they anticipated progress to clock in at a decrease tempo.
Stirring the following technology’s curiosity in mechanical watches that work with no battery is vital to the way forward for the Swiss watch trade as omnipresent cellphones inform the time extra precisely than any mechanical watch.
“Consumers want real values not only materially but also emotionally,” mentioned the Swatch Group, as its flamboyant chief government Nick Hayek sought to elucidate why Swiss watches would hold their enchantment in a world “where everything is interchangeable and quickly loses its value”.
The company additionally highlighted the growing curiosity in preowned merchandise, a latest pattern within the trade, however didn’t say whether or not it might actively enter the class as some friends have carried out.
Richemont in May reported disappointing annual outcomes, notably resulting from stock buybacks of unsold watches, but additionally talked about the restoration in Hong Kong, the most important export market for Swiss watches.