Swatch Group has posted its first-half net profits. The results beats the analysts' estimates. Although Swatch net profits fell to 301 million Swiss francs, Swatch expects demand to pick up in the second half. Swatch indicated that sales in the past few months and current orders are healthy.
Brands under the Swatch Group, e.g. Omega, Tissot, Longines and Hamilton posted higher profits last month compared to the same month last year. The mid-range brands like Tissot and Longines as fairing better as there is a move by consumers favouring less expensive brands. Also these brands are not reliant on the tough American and Japanese markets.
High-end brands like Blancpain, Breguet and Glashuette are facing a more difficult time, not because consumers are not buying but retailers are not ordering. According to Swatch, this tendency is slowing improving as retailers are expected to start ordering again.
Analysts estimate the Swiss watch industry will lose about 3,000 jobs and some even expect about 100 brands to go bust within the next year.
Source: Reuters, Bloomberg, Federation of the Swiss Watch-making Industry, Watchtime