Omega, Tissot, and Longines Owner Swatch Warns COVID-19 Lockdowns in Europe Could Hurt Sales

By Adriaan Brits Thursday, March 18, 2021

Swiss watch company Swatch reported improving demand for its products for this year but warned that fresh COVID-19 lockdowns are likely to have a negative impact on this year’s sales.

Swatch logo on front of building.

Sales Are Picking Up

Swatch is expecting Q1 business sales in the United States (US) to rise by 15% compared to a year-ago period. Although this is an encouraging sign for the company, it is worth pointing out that the Northern and Southern America sales generate less than 10% of the total business sales.

The owner of watch brands Swatch, Omega, Tissot, and Longines reported its sales fell 32.1% last year compared to 2019. The COVID-19 pandemic forced the watch business to close its stores, with the renewed restrictions in Europe in February and March hurting the company’s business again. For 2020, the company reported a net income of CHF533 million ($573.5 million).

Based on the January data, the company is hoping to return to pre-pandemic business sales levels, but new lockdowns are posing a threat.

“Our aim is (in 2021) to get as close as possible to 2019, but when I look at how in Germany or Italy they are closing and opening, I don’t know,” Nick Hayek, CEO of the company, told journalists today.

Europe is the second-largest market for Swatch as it contributed with 24% to the group’s total sales last year, down from 28% in 2019.

“Europe and Switzerland are impacting us, Switzerland is a big business with tourists, and as long as there are closures and tourism is not happening it will be more difficult of course to approach the 2019 numbers.”

Asia, on the other hand, remains the biggest and the most important region for the Swiss watch business, with two-thirds of total sales coming from this region. The latest data points to rising watch sales are in mainland China, Macau, Korea, Taiwan, and Thailand.

According to a Morgan Stanley and LuxConsult research paper on the Swiss watch industry in 2020, Tissot delivered more watches than any other top brand in 2020 (2.4 million), followed by Longines with 1.5 million.

Shares of Swatch are trading moderately lower in today’s trading session in Switzerland. The company has a market capitalization of CHF14.40 billion ($15.5 billion).

Summary

Swatch said it is witnessing recovering sales in 2021 after its full-year business sales fell over 32% in 2020 amid the COVID-19 pandemic.

About the Author


Headshot for author Adriaan Brits
As an analyst of global affairs, Adriaan has an MSC from Oxford, with diverse interests in the digital economy, entertainment, and business. He is a specialist trainer in Advanced Analytics & Media.

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