Swatch Group Tanks – Coronageddon 39


Swatch Group watch brands

“The Swatch Group reported its first annual loss since the early days of the Swiss watchmaker almost 40 years ago,” reports. Before we run the numbers, know this: Coronageddon is obscuring an existential threat to Swiss watches in general and the Swatch Group in particular. This isn’t news to regular readers of this series. Anyway, here’s where the Group stands now . . .

The Swatch Group ended 2020 with sales down 32 percent from the previous year, losing $60m on gross revenue of $6.29b. [Click here for the full report.] You might think that’s the way the COVID cookie crumbles. Truth be told, that’s a 10 percent greater export drop than the entire Swiss watch industry suffered during the same time period.

Swatch Group Swatch

It’s the first time the Swatch Group has seen red ink since 1983, its birth year, the year it launched the Swatch watch. The plastic fantastic quartz timepiece was a runaway success, lifting the company to dizzying heights. The Swatch Group used its windfall to hoover-up Swiss watchmakers driven to extinction by the quartz crisis.

The corporate mothership currently shelters 18 watch brands, including Blancpain, Breguet, Glashütte Original, Harry Winston, OMEGA, Longines, Tissot, Hamilton, Certina, Rado and Swatch. Fast forward to yesterday. Swatch Group survives pandemic . . . to end 2020 close to break-even‘s headline prevaricates.

OMEGA boutique - Swatch Group

“Omega suffered a 10-day production interruption due to a cyber-attack, which led to delivery delays and lost sales,” they report. Who knew? But I’m not surprised to learn that a 70 percent increase in online sales across the Group only contributed “between 20% and 30%” of the 32 percent smaller pie. Look and feel is still the deal.

Swatch Group execs are looking ahead and feeling confident. “For 2021, the group is forecasting sales approaching those of 2019, with significantly improved margins.” Watchpro somehow fails to mention the 500-pound gorilla in the room: the smartwatch.’s account of The Swatch Group’s fortunes does not.

Apple Watch main screen

There has been rising competition from smartwatch competitors such as Apple whose products count steps, calories, heart rate as well as connect to the internet . . .

Swatch is more vulnerable than its rivals as analysts estimate it generates at least a third of its sales from watches which sell for under $1,000 – a comparable price point to products made by Apple and others.

The Swatch Group should have bought Fitbit. Meanwhile, the Tissot T-Touch Connect Solar is their late-to-the-game answer to the smartwatch. The model hits the U.S. market in the summer of 2021, where it may well land with a thud.

It’s a 47.5mm hybrid with its own operating system (SwALPS) that competes with Casio ana-digi watches, not the Apple Watch and its ilk. How could it? The T-Touch lacks a heart rate monitor, or anything like the 20k Apple Watch apps inside Cupertino’s walled garden.

Without a “proper” smartwatch, despite asserting that “Swatch is pleased with the high demand for its SwatchPAY! models with credit card function,” I reckon the Swatch Group can kiss that third of their total sales goodbye. Probably more. The Group’s lower priced brands will have to downsize dramatically and/or die.

SWATCH store

Swatch knows they have to reconfigure their business to make their money – pretty much all their money – from their luxury brands. Last year, the Group closed 384 retail stores (including 60 stores in Hong Kong), cut their global workforce by 10 percent and opened 55 upmarket boutiques.

Their future depends on the luxury watch business recovering from Coronageddon and growing enough to compensate for the ongoing loss of volume sales at the bottom of the market. Swatch has some great luxury brands and plenty of free cash flow: $780m (down 21.3 percent against the previous year). But the clock is ticking and the current climate is almost as bleak as an Ingmar Bergman movie.

Swatch Group - December Swiss watch stats

The Federation Horlogère Suisse’s stats are in for December. Oxymoronically, the Federation says the numbers indicate “a gradual recovery but still on a sharply downward trend . . . with most markets posting sharp declines.”


Swiss watch exports worldwide FHS

At the moment, China is the only bright spot – exports were up 45.2 percent! BUT the rise reflects the fact that Chinese nationals aren’t allowed to leave the People’s paradise to spend their money at [what used to be] international shopping meccas.

If you spread the export stats globally, sales are down the aforementioned 21.8 percent compared to last year.

Swatch Group - exports down by price

If the People’s Republic of China’s economy tanks or become inaccessible (for whatever reason), the Swatch Group is f*cked. Its rivals too. But again, the real and present danger to Swatch lies at the bottom of the market.

As the chart above indicates, it’s still pretty dire at the top of the market. Swiss watch exports above $3300 are way down 6.4 percent. Thanks to the rise and rise of the smartwatch, it’s a bloodbath at the bottom. Swiss watch exports below below $562 fell 19.5 percent last month. That’s Swatch (the watch) territory.

Longines Heritage Military Marine National - Swatch Group picture

The good news: Hamilton, Tissot and Longines’ products fall between the two stools, where sales are up relatively speaking. Can the Swatch Group survive on mid- and up-market timepieces without volume mass market production? Not in its current form, no.

Which is why The Swatch Group is evolving. The key fact for stockholders is, as always, growth. Without a smartwatch, without booming luxury watch sales (and production ability to match), the Swatch Group will have to shrink. How, how fast and how far remains to be seen.

Swatch versus Apple beach

If The Swatch Group is ready to make tough decisions, if their shareholders are willing to wait and live with diminished expectations, the Group will emerge from Coronageddon smaller but vital. Otherwise, at some point, they’ll be forced to sell the crown jewels to keep what’s left of the conglomerate afloat. Watch this space.


  1. Interesting stuff! Especially that the 500 – 3000 CHF range Swiss watches are UP, while anything else is down.

    I’m not so sure that the answer is for Swatch to make a “smart watch.” That niche (as it were) is pretty well dominated by Apple and Android phone accessories. They were FIRST. And, it’s VERY hard to compete with those who are well-established FIRST. I think there’s a reason Casio has been reluctant to enter the “smart watch” market. Nobody wants a Casio “smart watch.” When consumers think “smart watch,” they’re thinking Apple or Android… and mostly Apple, for better or for worse.

    Considering that I am a newbie to this horological universe (relatively speaking), you can take anything I say with a whole bunch of salt. And, my perspective is one from a very limited experience within a narrow scope of the watch marketplace. Admittedly, I dove deep into the Japanese end of the market, and more specifically, the Casio end.

    Risking being labeled a “fanboi”….

    But, in my time in the Casio world, I have observed a rather fanatical audience for their products (myself included). They make a HUGE variety of rather inexpensive watches. While some (outsiders) would argue that they’re “all the same,” they simply aren’t. They’ve developed an AVID following, chomping at the bit to see what they’ll come up with next. And, they are priced to be accessible to the masses.

    While I have not looked specifically for it, I’m not aware of a similar following of fans for Swatch watches (or similar). Are there internet forums for Swatch fans? As comprehensive as the list of watch brand sub-forums is over at, there isn’t one for Swatch.

    It would seem, to this naive newbie, that Swatch’s “thing” is basically different colors. Lots of colors. They are primarily fashion watches. Casio’s G-Shock line, for example, offers a lot of options that go beyond (but include) fashion. They offer functional options that serve a variety of environments or uses. No, I don’t NEED a barometer or an integrated compass on my watch. But, damn… it’s cool! Moon phase or tide? Don’t need that, either. But, who else does that???

    I don’t NEED a watch that can be dropped from a 10-story building. But, it’s cool to know my watch could withstand the abuse. I don’t need a watch that resets itself to the atomic clock every night and recharges the battery constantly with exposure to light. But, there is something to be said for “set and forget.” Who else does that? OK… Citizen and Seiko do it a bit.

    There’s a reason there are Casio-related forums, sub-forums, and Facebook groups (a TON of them). And, they are VERY active. Ask me how I know. 😉

    Yes, I realize that this article refers to the Swatch GROUP, not just the Swatch brand of watches. But, from what I can tell, almost all the brands under the Swatch Group umbrella are upscale brands. I suspect Omega, Blancpain, Breguet, et. al. will survive. But, the lower end, mass-market brands will continue to suffer, UNLESS they have a “unique selling proposition” that creates an enthusiastic following (like Casio).

    • ^This. I wouldn’t say I’m a Casio fanboy, but I’ve at some point over the last year I’ve acquired half a dozen Casio watches. There are Seiko fans; Casio fans; Parnis, Corgeut, Steeldive, and Sharkey fans; Orient fans; and I wouldn’t be surprised if there were Citizen fans. I know there are people who love Omega, Hamilton and Longines just as much as the aforementioned brands, but I’ve never encountered a Swatch enthusiast let alone a Calvin Klein or Leon Hatot collector on the internet.

      • OK… Your comment made me curious. I went to the WUS forum’s brand-specific sub-forum list and cut / pasted a sampling of the brands, including some you listed… to see which were getting the most traffic and posts. Here we go! Casio leads at #1 (in terms of posts). Seiko and Omega have serious followings, as well. Interesting!

  2. Yeah, my list was based largely on what I’ve seen, and was in no way scientific. I’m not surprised by any of the brands on your list, even Longines. But I’ve never seen someone post pictures of their “sweet Jaquet Droz” on Reddit.

  3. Swatch Group is not a great investment (unless wallstreetbets adds it to its pump and dump list), but it is not in any risk of going away either.

    Of the 7 Swiss watch brands that do over $1 billion in sales annually 3, Omega, Longines, and Tissot, belong to Swatch Group.

    Swatch Group is also the only large Swiss group selling Swiss mechanical watches for under $1,000, so I tend to respect them for making mechanical watches accessible.

    It would be interesting to see the numbers broken out by quartz and mechanical watches, I suspect in all price ranges mechanical watches are stable or growing, while “dumb” quartz in in a nosedive.

    My last two watches are mechanical Sistem51s in the <CHF200 category, but the Sistem51 is really the only Swiss mechanical watch in that category, and that category is being dragged down by quartz.

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