Swatch Group’s sales fell sharply in the first half of 2024 due to weakened demand for luxury goods across China, Hong Kong, and other Southeast Asian markets. The Swiss conglomerate reported a 14% drop in revenue, totaling CHF 3.45 billion ($3.87 billion). Adjusted for constant exchange rates, sales decreased by 11%, reflecting the impact of currency fluctuations.
Revenue from jewelry and watches declined by 14% to CHF 3.3 billion ($3.71 billion). Additional revenue was generated from electronic systems and corporate activities. The company’s net profit plummeted by 70% to CHF 147 million ($165.3 million).
Swatch Group, which owns brands such as Omega, Tissot, and Harry Winston, attributed the sales drop to a significant reduction in luxury goods demand in China, Hong Kong, Macau, and Southeast Asia. These markets, which rely heavily on Chinese tourists, saw substantial declines. Despite this, the Swatch brand managed to surpass its sales figures in China compared to the previous year.
The downturn in the Asian market overshadowed strong sales in the US and Japan, and steady demand in Europe. Swatch anticipates that the Asian market will remain challenging through the end of the year but expects conditions to improve in the long term.
The company remains optimistic about China’s potential and expects continued strong growth in Japan and the US in the latter half of 2024. Additionally, Swatch highlighted promising prospects in Europe, noting that Omega, as the official timekeeper for the Paris Olympics, is expected to gain significant global media attention.
Swatch also reported positive outcomes from its cost-cutting program initiated earlier in the year, with the full benefits expected to materialize in the second half of the year.
