Hong Kong’s political unrest has resulted in the first fall in annual profits at the Swatch Group since 2018.
The world’s biggest watchmaking group, which owns brands like Omega and Longines, just announced its 2019 results, showing declines in both sales and profits.
Net profit fell 13.7%, while sales declined 1.8% at constant exchange rates, or 2.7% at current rates, to 8.24 billion francs.
The drops in profit and sales were primarily due to a drastic contraction of its business in Hong Kong – a city with a population of just 7.4 million – where Swatch Group owns over 90 retail stores, largely catering to shoppers from the China. Sales in Hong Kong for the second half of 2019 fell by 200 million francs.
While Hong Kong was the key driver of the decline, it was not the only one. The luxury watch business in general is suffering from anaemic growth, which is also evidenced by the watch division results at diversified luxury groups like LVMH and Kering.
On a more positive note, Swatch Group has managed to fulfil its stated aims of reducing operating expenditure and thinning inventory. Operating expenses dipped about 6%, while operating cash flow rose 30% in 2019. And after several consecutive years of growth, the group’s inventories declined by 1% in 2019, to a still-substantial 6.85 billion francs at cost.
It’ll be a slow 2020…
With Swatch Group predicting the situation in Hong Kong will continue to be “challenging” in 2020, it is in a weaker position relative to other luxury conglomerates.
Some of its watchmaking peers have with less exposure to Hong Kong and China, while diversified luxury groups like LVMH make most of their money in fashion and leather goods, which has enjoyed more robust demand than luxury watches.
Unsurprisingly, LVMH recently announced stellar results for 2019, with both revenue and profit rising 15%, with particularly strong performances at Louis Vuitton and Dior. Its watch and jewellery division, on the other hand, only eked out a 3% rise in sales, with jewellery outperforming watches.
For the full Swatch Group announcement, visit Swatchgroup.com.
Originally unveiled as a sub-brand of Seiko in 1960 dedicated entirely to high-precision wristwatches – and only sold in Japan for most of that time – Grand Seiko has now become an independent brand. This year is the 60th anniversary of its founding, and the occasion is being commemorated with a quartet of limited editions (with perhaps more to come later in the year), including two quartz watches powered by the 9F85, a new, top-of-the-line quartz movement.
All of the anniversary editions feature a dial in dark blue, one of Grand Seiko’s signature colours, albeit executed in different materials or finishes, ranging from a stamped pattern to mother of pearl. All of the men’s models also have a red seconds hand, creating a red and blue aesthetic that’s uncommon for Grand Seiko.
The flagship 60th anniversary watch is the Heritage Collection Hi-Beat 36000 Limited Edition (SBGH281), a variant of the 44GS “modern reinterpretation” that features broad, mirror-polished case flanks that are steeply sloped, a distinguishing characteristic of the 44GS case style.
It’s powered by the 9S85, an automatic movement operated at 36,000 beats per hour, hence the “Hi-Beat” label. Only 1,500 will be made.
The Hi-Beat limited edition also features a gold “GS” logo on the dial
The other mechanical model in the anniversary line-up is the Elegance Collection Women’s Automatic Limited Edition (STGK015), powered by the 9S27 automatic movement.
Its dial is dark-blue mother of pearl, with 11 brilliant-cut diamonds as hour markers. Limited to 300 watches, the STGK015 has a cushion-shaped, 28.7 mm case set with another 45 diamonds on the bezel. All of the diamonds mean that despite being the simplest in terms of mechanics, this is the most expensive of the anniversary range.
The other two anniversary models are both quartz, equipped with the 9F85. It’s a new calibre that’s part of the 9F family of hand-assembled, high-tech quartz movements that run within 10 seconds a year.
The key feature of the 9F85 is the independent hour hand – that can be set forwards or backwards in one hour steps – meaning the time can be adjusted when the wearer crosses time zones, without affecting the synchronised time of the watch.
The first of the anniversary editions, the Heritage Collection Quartz Limited Edition (SBGP007), is equipped with a specially adjust version of the 9F85 movement that’ll run within five seconds a year, making it twice as accurate as the standard movement.
The case back of the SBGP007 with a gold Grand Seiko medallion
Like all specially regulated Grand Seiko watches, this has a gold star on the dial, which is also decorated with a repeating, stamped “2020” motif.
And the second model is the Sport Collection Quartz Limited Edition (SBGP015), powered by the standard 9F85. Unusually, it has a dark blue ceramic bezel, giving it a look distinct from the average Grand Seiko.
At the same time, it is the only watch in the anniversary collection with a screw-down crown – and water-resistance of 200 m – as well as luminous hands and markings, features found only on the Sport models.
Key facts and price
Grand Seiko 60th Anniversary Heritage Collection Hi-Beat 36000 Ref. SBGH281
Case diameter: 40 mm Case height: 13.3 mm Material: Steel Water resistance: 100 m
Movement: 9S85 Features: Hours, minutes, seconds, and date Frequency: 36,000 beats per hour (5 Hz) Winding: Automatic Power reserve: 55 hours
Strap: Steel bracelet
Limited edition: 1,500 pieces Availability: From February 2020 at Grand Seiko boutiques and retailers Price: US$6,300, or 640,000 Japanese yen
Grand Seiko 60th Anniversary Elegance Collection Women’s Automatic Ref. STGK015
Case diameter: 27.8 mm Case height: 11.2 mm Material: Steel Water resistance: 100 m
Movement: 9S27 Features: Hours, minutes, seconds, and date Frequency: 28,800 beats per hour (4 Hz) Winding: Automatic Power reserve: 50 hours
Strap: Steel bracelet
Limited edition: 300 pieces Availability: From February 2020 at Grand Seiko boutiques and retailers Price: US$9,500, or 1 million Japanese yen
Case diameter: 40 mm Case height: 10.8 mm Material: Steel Water resistance: 100 m
Movement: 9F85, specially regulated to ±5 seconds a year Features: Hours, minutes, seconds, and date; independently adjustable hour hand Winding: Quartz Power reserve: Approximately 3 years
Strap: Steel bracelet
Limited edition: 2,500 pieces Availability: From March 2020 at Grand Seiko boutiques and retailers Price: US$3,800, or 400,000 Japanese yen
Grand Seiko 60th Anniversary Sport Collection Quartz Limited Edition Ref. SBGP015
Case diameter: 40 mm Case height: 12.4 mm Material: Steel with ceramic bezel Water resistance: 200 m
Movement: 9F85 Features: Hours, minutes, seconds, and date; independently adjustable hour hand Winding: Quartz Power reserve: Approximately 3 years
Strap: Steel bracelet
Limited edition: 2,000 pieces Availability: From April 2020 at Grand Seiko boutiques and retailers Price: US$3,900, or 400,000 Japanese yen
