Luxury conglomerate Swatch Group have released financial figures from 2012 showing that earnings are up a billion dollars over the previous year. The Swiss company, which is the world’s largest holder of watch manufactures, earned $8.79 billion (CHF 8,143 million), an increase of 14% over 2011. Although the company owns various holdings, the Watches & Jewelry segment was one of their strongest earners, with double-digit growth at luxury manufactures like Breguet, Blancpain, Glashütte Original, Omega and Longines.
An increase in demand from the burgeoning Asian market has driven growth in the watchmaking industry, and Swatch has capitalized with additional expansion of production capacities. Market share has been increased thanks to adaptive expansion, which CEO Nick Hayek told the Wall Street Journal in 2011 was a clear priority. “In some segments we have had capacity problems and we could have sold more. For brands like Blancpain, Breguet, and Omega, growth could have been more,” Mr. Hayek said. Expansion also helped the company recoup losses such as the significant marketing expenses splashed out on the London Olympic Games.
Overall, the Swatch Group have weathered the financial slowdown better than many others in the industry; in the same WSJ interview, Hayek commented that “everybody is talking about a slowdown but we don’t really see it…Some areas have more problems than others, but there are lots of opportunities for growth.” Although customers may be spending less overall, they tend to favor investments like the purchase of a luxury timepiece. “Swiss-made means something to people,” says Hayek.
With indications of positive growth in 2013 after the all-important holiday season, it looks like the Swatch Group is set for another good year to come.
Pictured above (far left) is Swatch Group CEO Nick Hayek. Photo courtesy Reuters. Source courtesy the Swatch Group.