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Swatch Group chief says situation 'improving'

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AFP
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today Mar 30, 2009
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GENEVA, March 30, 2009 (AFP) - Swatch Group, the world's biggest watchmaker, on Monday said orders begun picking up in March, suggesting the situation was "improving" for the industry.


Swatch campaign Spring-Summer 2009

March "confirms that the situation is improving" and that "retailers have began to place orders," Nick Hayek, Swatch's chief executive, told AFP.

"We are no longer talking about cancellations in the order of 50 to 60 percent," he said on the sidelines of Baselworld, the world's biggest showcase for the watch industry held in the northern Swiss city until Wednesday.

"Some retailers are buying more, the same, or 15 to 20 percent less" compared to a year ago, Hayek said.

While confirmation would have to wait until the middle of the year, "we have a good chance that the situation will stabilise and that the second half ... will allow us to recover a part of the slowdown in January and February.

"In March, consumers continued to buy, stocks are running out ... and the retailer will have to continue buying and gradually, the situation will normalise," Hayek said.

He acknowledged that sales in the first half would fall below the year-earlier level.

For the full year, sales would also dip below 2008 levels, but "even if we sell eight to 10 percent less by year-end, we will still have done better than in 2007," he added.

If demand for watches has been little dampened by the financial crisis, huge swings on the foreign exchange market have wrecked havoc on Swatch's earnings.

The group, with a vast array of brands from the eponymous plastic watch to the luxury Breguet hand-crafted timepiece, lost 230 million Swiss francs (200 million dollars) due to unfavourable currency effects in 2008.

Hit by the economic crisis, Switzerland's watch export volumes plunged 22.4 percent in February.

Experts in the sector believe that exports could fall 20 percent in the first half of 2009.

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