Swatch Is Seeing Gross sales Hunch, and It is Due to China

• Watch group Swatch noticed its gross sales decline by greater than 12% and its earnings by 75% in 2024.
• It attributed its weak outcomes to a “persistently tough market state of affairs” in China.
• 2024 was a nasty 12 months for luxurious manufacturers, from LVMH and Kering to Champagne producers.

Swatch reported weak gross sales and a serious stoop in working earnings in 2024, owing largely to weak demand from Chinese language customers.

The posh watch group, which owns watch large league manufacturers like Omega, Tissot, and Longines, noticed its gross sales decline 12% and its earnings drop about 75% final 12 months.

Within the earnings press launch revealed on Thursday, the group posted internet gross sales of 6.7 billion francs, or $7.4 billion. This was a 12.2% decline from 2023 when it earned 7.9 billion francs.

Its working revenue dropped about 75% from about 1.2 billion francs in 2023 to 304 million francs in 2024.

The group attributed the outcomes to a “persistently tough market state of affairs and weak demand for shopper items total in China.”

Swatch’s press launch stated gross sales in China, together with Hong Kong and Macau, slid round 30% in 2024.

It additionally added that there was a “enormous drop in demand for shopper items” in Southeast Asian markets, which it stated are “closely depending on Chinese language vacationers.”

Nonetheless, it reported stronger gross sales in different key markets, such because the US, Japan, India, and the Center East. It stated that within the US, Tissot gross sales exceeded $100 million for the primary time.

Total, luxurious Swiss watchmakers struggled with weak demand in 2024. In September, Bloomberg reported that Girard-Perregaux and Ulysse Nardin, Swiss luxurious watch manufacturers owned by Sowind Group, turned to the federal government for monetary assist to deal with low demand.

In the meantime, the Rolex resale market has additionally been cooling for greater than two years after its COVID-era excessive, owing partly to a surge of watches coming into the market.

A nasty 12 months for luxurious items

Watches are usually not the one luxurious merchandise impacted by waning demand in China.

In 2024, total luxurious spending stagnated, and massive manufacturers noticed their share costs drop. Kering, the proprietor of Gucci, YSL, and Balenciaga, noticed its inventory fall greater than 40% final 12 months.

And luxurious conglomerate LVMH’s gross sales declined by 3% within the third quarter of 2024, partly due to weakened shopper confidence in China.

Representatives for Swatch didn’t reply to a request for remark from Enterprise Insider, despatched exterior common enterprise hours.