Swatch Group's profits plummet in first half

Zurich - Swiss watchmaker Swatch Group published its half-year results on Thursday. The results were heavily affected by weak consumer spending in China, causing its net profit to plummet.

The group, owner of the multicoloured plastic watch brand and other brands, including Tissot, Longines and Omega, saw its net profit fall to 17 million Swiss francs for the six months to June. This compares to 147 million francs in the same period one year earlier, it said in a statement.

Its turnover fell by 11.2 percent to three billion Swiss francs. This was due to weak consumer spending in China, Hong Kong and Macao. It was also impacted by weakness in Southeast Asian markets "heavily dependent on Chinese tourists", the Swiss watchmaker acknowledged.

Its wholesale activities in the Chinese market fell by more than 30 percent. Sales in its own stores "fared slightly better, with a 15 percent drop", it quantified. The US, Mexico and Canada, on the other hand, recorded double-digit growth.

The watchmaking sector in Switzerland has been severely affected by the drop in demand in China. According to the watch federation's figures published separately on Thursday, Swiss watch exports to China fell by 18.7 percent between January and June compared to the same period one year earlier. Exports to Hong Kong fell by 13.3 percent.

For the second half of the year, however, Swatch Group said that "initial positive signs of improvement are visible", according to the statement.

It expects a "reduction in inventories at Chinese retailers and, consequently, a resumption of orders". It believes that e-commerce in China should also help boost consumption. The US, Japan and India still have great growth potential, it said.

This article was translated to English using an AI tool.

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