Swatch rides the wave of success with Moonswatch

In recent years, Swatch has become quieter, but since the launch of several Moonswatch models at the end of March, the brand has been on everyone's lips again. The long queues outside Swatch stores are evidence of this and have not got any shorter in the last three months. "The growing daily demand in the markets currently far exceeds the available products," Swatch announced on Thursday at the same time as the half-year results. The Moonswatch was therefore sold out again shortly after the last delivery. The respective colors of the watch represent different planets and other celestial bodies such as the sun, moon and Pluto.

Clever marketing strategy

The fact that the hype surrounding the Moonswatch is so great has to do with a clever marketing strategy. The Moonswatch, which was the result of a collaboration between the two Swatch and Omega brands belonging to the group, is on sale in just 110 Swatch Group stores for 250 francs a piece. "If you want to buy one, you have to come to us," Group CEO Nick Hayek had recently told the Handelszeitung said. As customers can only buy the watch in selected stores, availability is even more exclusive than with the Group's own luxury brands Breguet, Blancpain or Glashütte Original, according to Swatch. And although the eleven different-colored watches have been widely advertised on social media, Swatch does not intend to sell the Moonswatch online in the future either. However, sales are to be expanded by 25 stores in July and August. Since the beginning of last week, eleven colorful Fiat 500s have also been on a road trip across Europe, selling the watches along the way. Here, too, Swatch is deliberately creating suspense: exactly where the journey will take them remains a secret.

Growth despite China lockdown

Swatch is also keeping to itself how much Moonswatch contributed to Group sales in the first half of the year. This rose by a total of 7.4 percent to 3.61 billion Swiss francs. This was despite the fact that demand for watches and jewelry in China, where Swatch normally generates around 40 percent of its sales, collapsed completely in April and May due to coronavirus lockdowns. The closures in China cost Swatch a total of 400 million Swiss francs in sales, it said. On the other hand, the Europe, Americas and Middle East regions recorded double-digit sales growth, while the war in Ukraine impacted Group sales by less than one percent. The operating profit EBIT even climbed by a quarter to 503 million Swiss francs in the first six months of the year. The corresponding margin was 13.9 percent compared to 11.9 percent in the previous year. At the bottom line, profit rose to CHF 320 million, up from CHF 270 million.

Confident for the year as a whole

Despite geopolitical tensions and the slump in demand in the Chinese market, which is important for the watch industry, Swatch is confident for the year as a whole. The "daily increase in demand" for the Moonswatch is also likely to contribute to this. The Group continues to expect double-digit sales growth in local currencies in the current year. Swatch sees "extremely positive" growth prospects for all price segments in the second half of the year. Regionally, the strongest growth is expected in America, Asia and mainland China, it said. (SDA/swi)