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RAPAPORT... Swatch Group's sales increased 8.5 percent year on year to $5 billion (CHF 4.535 billion) at constant exchange rates in the first half year that ended on June 30. An overvalued Swiss franc strengthened further against currencies in all of the group’s important sales regions, negatively impacting revenue by $200 million (CHF 188 million) or 4.5 percentage points.
Swatch Group's profit fell 11.5 percent year on year to $754 million (CHF 680 million).
In the watches and jewelry segment, Swatch Group recorded sales growth of 8.8 percent at constant rates and 4.3 percent at current rates. Harry Winston made further significant investments in a wider product range and an increased availability of high-end jewelry, as well as in the new watch collection which was presented at Baselworld 2014 and which will be available in its retail stores in the second half of 2014. The brand also invested in renovation of its retail stores.
The electronic systems segment was exposed to the overvalued Swiss franc, particularly against the dollar and yen. Sales fell 2 percent year on year to $162 million (CHF 146 million).
Swatch Group employed over 34,000 as of June 30 and inventory totaled $6.35 billion (CHF 5.729 billion) as the company increased the level of semi-finished and finished products. Swatch anticipates that all of its operating segments will experience a promising second half of 2014, particularly in the U.S. and Japan.
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