Swatch clocks up increased profits as it defies China hitch
SWATCH, the world's biggest watch maker, cheered investors yesterday with a first-half rise in profits despite a crackdown in China on traditional gift giving.
While rivals were dented by the new rules on giving luxury gifts to party officials and business chiefs, Swatch saw a 6 per cent rise in profits to Sfr768m (£532m).
Its chief executive, Nick Hayek, said Swatch, which sells watches ranging from its colourful plastic ones at £35 to top of-the-market Omegas at more than £3,500, had managed to do well in China's low to mid-price markets.
Mr Hayek had already signalled that the first half would be tough going, but yesterday Swatch said: "The outlook for the group remains very promising, and a strong second half-year is expected."
Overall, Swiss watch makers have seen double digit falls in sales to China but the market still accounted for a quarter of worldwide sales in the six months to June.
Swatch expects an improvement in China during the second half and has several new products, including its new mechanical Swatch Sistem51.
It bought the luxury watch brand Harry Winston for $1bn in March and said it expects a "significant" contribution from it in the second half.