Swatch sees double-digit 2014 growth as China improves

Swatch, the world's biggest watch maker, expects double-digit sales growth this year on the back of stronger demand in China, easing concerns of a downturn in this key export market.

Swiss watchmakers sold less in China last year after the government cracked down on illegitimate gift-giving of luxury items, but Swatch – whose brands range from the cheap plastic watches that gave the group its name to pricey Omega and Breguet timepieces – has fared better than rivals.

This reflects the fact that its mid-market Tissot and Longines brands, which do not cost enough to be considered possible bribes, sell well to China’s rising middle classes.

"Swatch Group will have double-digit growth [next year] even if mainland China is only growing single-digit. We are strong in all regions of the world," chief executive Nick Hayek said.

He added that the company, whose shares rose more than 3 per cent, was seeing good growth in mainland China in the entry and mid-price segment, but also an improvement in the high-end category as growth at its main brand, Omega, was about to turn positive.

"There are still some problems in the luxury segment in mainland China ... customers and retailers are uncertain what to buy. There was a psychological shock, but the situation is normalising," Hayek said. However he said Swatch did not wish to become a big player in the new breed of "smart" watches being touted by tech companies such as Sony, Samsung and Qualcomm and which can replicate smartphones in making calls, accessing the web and running apps.

Swatch also posted a 9.1 per cent rise in gross sales last year, just short of analysts estimates.

This compares with a 1.7 per cent rise in total Swiss watch exports in the 11 months through November, a sign Swatch gained market share. Swiss watch exports to Hong Kong and China, fell 6 and 15 per cent respectively. –(Reuters)