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Swatch sees healthy 2013

Jan 10 2013 09:32 Reuters

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Zurich - Swatch Group, the world's biggest watchmaker, has beaten expectations with a 14% rise in full year sales, after taking market share from rivals.

"The strong group brands performed convincingly in all regions and price segments, notably outside greater China as well, and realised further conspicuous growth in market share," Swatch said on Thursday.

The Swiss group posted 2012 sales of 8.14bn Swiss francs ($8.8bn), compared with a forecast for 8.05bn in a Reuters poll. 

Swatch had said several times that reaching the 8bn franc target would be challenging due to the impact of a weak dollar and slowing growth in debt-stricken Europe and the important Chinese market. 

Known for its colourful plastic, Swatch watches and high-end Breguet and Omega brands, the company is the first luxury goods group to report 2012 sales. Peer Richemont will post a trading update on Jan 21. 

Sales growth in the global luxury market is estimated to have slowed to 5% in 2012 from 13% in 2011, as Chinese and European customers rein in spending, consultancy Bain & Co and luxury goods trade body Altagamma said recently.

LVMH has seen sales growth slowing, and Burberry  and PPR's Gucci have warned of tough trading in growth market China.

However, while cooling Chinese growth has dampened demand for ultra-pricey timepieces, Swatch has reported that mid-priced watches are still flying off the shelves in China.

Strong demand for Swiss watches in China's second-tier cities and other Asian markets should continue to drive export growth in the next 12 months, a recent survey of 50 Swiss watch executives found. 

Swatch said it expected to report "good" operating profit and net income for 2012 - due on Feb 21 - taking into account marketing expenses for the London Olympic Games and unfavourable currency swings.  ($1 = 0.9271 Swiss franc)

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