Swatch upbeat despite adverse impact of Swiss franc surge

Swatch Group forecast a strong end to the year as shoppers snapped up lower-priced models of its namesake brand in mainland China, helping counter a decline in Hong Kong that has buffeted the luxury watch industry.

Sales in the greater China region will increase in the second half, excluding currency shifts, the company said yesterday, pushing the stock up the most in more than two years.

Consumer demand for Swiss watches remains high globally after sales growth accelerated in May and June, Swatch said.

The outlook gave a boost for the company after earnings were damped by the surge in the Swiss franc. First-half operating profit declined 8.3 per cent to SFr761 million (€730 million) as the franc’s surge against the euro and weak demand in Hong Kong eroded sales. – (Bloomberg)