Consumers are willing to splash out on watches in markets where shops are open, in Asia and also the United States, Swatch Group Chief Executive Nick Hayek told an online media briefing on the watchmaker’s full-year results on Thursday.
“People want to compensate after the crisis is over, they want to spend … they want to have sure values. We see it in mainland China, Macau, Korea, Taiwan, Thailand. The restriction that is blocking us to develop the full power of sales we had before 2020 is of course tourism,” Hayek said.
He was less upbeat on Europe, saying it was repeating last year’s situation and not really learning a lot about how to handle the coronavirus pandemic.
Swatch Group in January posted a net loss of 53 million Swiss francs ($57.34 million) for 2020, its first in decades, as the COVID-19 pandemic shuttered shops and smartwatches made inroads into the market, hitting demand for Swatch plastic watches.
In the group’s annual report published on Thursday, Chairwoman Nayla Hayek said she did not blame the loss “on management mistakes or a change in consumer behaviour, but on the futile policy of total lockdown”.
In a separate statement, the Swiss Watch Federation said the industry’s exports stabilised in February after falling 22% last year. Shipments to the U.S. market and China grew, helped by a favourable comparison base, but volumes in the entry-price segment, to which Swatch Group has significant exposure, fell almost 40%.
Citi analyst Thomas Chauvet said exports had not shown a meaningful improvement yet. He said Swatch Group’s forecast for 2021 sales slightly below 2019 levels was “possibly optimistic given higher store closures at the start of the year, ongoing travel restrictions and slow vaccination programmes”.