Sales at Swatch Group fell in the first half of 2024 as demand weakened for luxury goods in China, Hong Kong and other Southeast Asian markets. 

Revenue dropped 14% year on year to CHF 3.45 billion ($3.87 billion) for the six months, the Swiss conglomerate reported last week. Sales slipped 11% at constant exchange rates, with currency fluctuation affecting the final figures. 

Sales of jewelry and watches declined 14% to CHF 3.3 billion ($3.71 billion). Other revenue came from electronic systems and corporate activities. Group net profit plunged 70% to CHF 147 million ($165.3 million).  

“The huge reduction in demand for luxury goods in China (including Hong Kong and Macau) and in the Southeast Asian markets, which are heavily dependent on Chinese tourists, had a considerable negative impact on sales and results due to the strong presence of the group’s brands in the region,” the owner of Omega, Tissot and Harry Winston explained. “In contrast to this, the Swatch brand exceeded its sales in China compared to the previous year.” 

The decline in the Asian market outweighed strong sales in the US and Japan, as well as stable demand in Europe, the company noted.  

Swatch expects the market in Asia to remain challenging through the end of the year, it said. However, it believes the situation will ease in the long term.  

“China’s potential remains intact,” the company observed. “Further strong growth is expected in Japan and the US in the second half of 2024.”  

Swatch also pointed to “promising” prospects in Europe, noting Omega, the official timekeeper of the Olympic Games in Paris, was expected to receive global media coverage. 

“The cost-cutting program introduced at the start of the year has begun to bear fruits,” it added. “The full positive impact…will be felt in the second half of the year.” 

Image: A Harry Winston store in Shenzhen, China. (Shutterstock)