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Graphic shows changes in Swiss watch exports.


Swatch falls to first loss in nearly 40 years

By Duncan Mil

January 28, 2021 - Swatch Group reported its first annual loss in almost 40 years as the pandemic battered demand in the luxury sector. Swiss watch exports fell by a third in 2020, to 16.1 billion Swiss francs (€15.0bn).

The company posted a net loss of 53 million francs (€49.2 million) for 2020, its first loss since 1983 -- the year Biel-based Swatch Group AG was founded and launched the Swatch plastic watch.

The value of Switzerland’s exports of watches dropped 21.4% in 2020 -- a decline on par with the 2009 financial crisis -- the Federation of the Swiss Watch Industry said Thursday (January 28).

However, as the country’s third-largest exporter and a pillar of the Swiss economy, the Swiss watch industry will adapt and recover, concludes a recent Morgan Stanley study of the industry.

Morgan Stanley reports that mega-brands and niche brands should fare better than those in the lower price segments. Timepieces with a wholesale value above CHF 3,000 should account for an all-time high of 71 per cent of Swiss watch exports in value versus just 10 per cent in volume. Unsurprisingly, all eyes are on China, the only market to have grown since January.

Sales in China -- the world’s largest market -- grew by 20 per cent in 2020 to CHF2.4 billion. According to the Federation of the Swiss Watch Industry, sales in the other top four markets, U.S., Hong Kong, Japan and the United Kingdom, fell by 17.5, 36.9, 26.1 and 24.6 per cent respectively.

PUBLISHED: 28/01/2021; STORY: Graphic News