Profit breaks in the first half of the year

The Swiss watch concentration of Swatch Group published results on Thursday, which were severely affected by the weak consumption demand in China. The gwinn collapsed in the first half of the year.

The group, owner of the colorful plastic clock brand Swatch and other brands such as Tissot, Longines and Omega, made a profit of CHF 17 million from January to June (18.2 million euros). In the same period of the previous year, the profit was still CHF 147 million. The company announced this in a press release.

Sales fell by 11.2 percent to three billion Swiss francs. The reason for this was the weak demand for consumption in China, Hong Kong and Macao. The Southeast Asian markets, which “strongly depend on Chinese tourists”, also contributed to the decline in sales, the Swiss watch manufacturer admitted.

The company’s wholesale business in the Chinese market shrank by more than 30 percent. The sales in their own boutiques developed “a little better” and recorded a decrease of 15 percent, according to the group. The United States, Mexico and Canada, on the other hand, had two -digit growth.

The Swiss watch industry is badly affected by the decline in demand in China. According to separate figures from the Swiss Watch Association on Thursday, the exports from Swiss watches to China decreased by 18.7 percent between January and June compared to the same period last year. After Hong Kong, exports fell by 13.3 percent.

For the second half of the year, however, the Swatch Group sees “first positive signs of improvement”, the statement says.

The company expects “warehouse cut -out among the Chinese retailers and consequently a resumption of orders”. E-commerce in China should also contribute to the stimulation of consumption. The USA, Japan and India continue to offer great growth potential, according to the Swatch Group.