Swatch sales rise in 2013 but misses targets

The world's biggest watch group Swatch posted an 8.3-percent increase in sales in 2013 on Friday, but said it undershot targets because of unfavourable exchange rates. The Swiss watchmaker said in a statement before its full results that its sales soared to 8.8 billion Swiss francs ($9.7 billion, 7.1 billion euros) last year, up from 8.1 billion a year earlier. Swatch, most known for its brightly coloured plastic-cased watches, thereby fell short of the 9.0 billion francs it had aimed to generate. This did not come as a surprise: Swatch chief Nick Hayek has warned for several months that exchange rates could eat into the annual result. The number lies in the middle of market expectations, according to a poll by the AWP financial news agency finding analysts anticipated a sales figure of between 8.7 and 8.9 billion francs. In 2013, Swatch Group faced "an extremely adverse currency situation," the company lamented in a statement, stressing its sales figure had been hard-hit by an over-valuation of the Swiss franc against the dollar and the yen. "In the second half of the year, the negative effect on sales due to exchange rates was over 100 million francs," the company lamented. Despite the currency impact, Swatch said it expected to posted good operating profit and net income results when it publishes its full 2013 earnings, no later than February 20. Swatch, which operates in every price range, from the Flik Flak watches for children to prestigious timepieces under for instance the Breguet brand that can cost more than $1.0 million a piece, meanwhile easily outperformed the overall market. Swatch, based in the northwestern town of Biel, said its watch and jewellery division, which comprises most of its activities, had seen sales swell 10 percent in 2013. This compared to the Swiss watch industry's mere 1.8-percent rise in wristwatch exports for the first eleven months of the year, Swatch said. Looking ahead, the company hailed "the strong start by all brands in the first few days of January," stressing "dynamic growth is expected for the entire year 2014."