Swatch, the leading watch company globally, faced a notable decline in sales during the first half of 2020 due to the COVID-19 pandemic and subsequent lockdown measures. The Swiss-based group, which owns renowned brands such as Omega, Longines, and Tissot, reported a staggering 46.1% decrease in sales compared to the same period last year, amounting to 2.2 billion Swiss francs ($2.3 billion, 2.1 billion euros). This significant drop in sales led to a net loss of 308 million francs in the first half of the year, in stark contrast to the 415 million franc profit recorded during the same timeframe in 2019.

These sales figures fell slightly below the predictions made by financial experts, while the loss surpassed their expectations. Swatch attributed the steep decline in sales to the lockdown measures imposed by governments worldwide as part of their efforts to curb the spread of the virus. At certain times, these measures forced up to 80% of sales channels to temporarily close. Nevertheless, by June, Swatch had already resumed profitable operations.

The company expressed confidence that its sales and profit situation would quickly improve in the coming months as countries gradually ease COVID-19 restrictions. In an earnings statement, Swatch remarked, “A positive operating result is expected for the full year.” The company is relying on the launch of new products and reduced costs to offset the losses incurred during the first half of the year. Swatch also highlighted a significant rebound in regions where lockdown measures have been lifted, citing double-digit sales growth in mainland China in May and June compared to the same period last year.

To adapt to the challenging economic conditions, Swatch made the difficult decision to permanently close about 260 sales points in the first half of the year and reduce its workforce by 6.5%, leaving approximately 33,700 employees. These measures were necessary to navigate the sales downturn and ensure the long-term sustainability of the company.

While the impact of the coronavirus pandemic has undeniably been substantial for Swatch and the watch industry at large, there is optimism for recovery in the second half of the year. Swatch’s strong brand presence and reputation, alongside the gradual easing of lockdown measures, offer encouraging signs for the company’s performance in the upcoming months.

Links:
1. Swatch Official Website – https://www.swatch.com/en/
2. Omega Official Website – https://www.omegawatches.com/