Is The Worst Over For Swiss Watchmakers Like Swatch? – 17/8/09

Only time will tell, however there is some good news to report from the Swatch Group. We read in a Bloomberg article on Friday that “Swatch Group AG, the maker of Omega and Breguet watches, led a surge by luxury-goods stocks after saying sales show ‘signs of recovery’ after a ten-month collapse."

Financial analyst Rey Wium also told Bloomberg that, “These numbers could indicate that the worst is over for the watchmakers.” This will be welcome relief as several companies reported recently that overall profits were down due in some part to watch overstocks, (see The MO Down Bulgari Down But Not Out, 4/8/09).

Swatch shares also rose 13 percent, the strongest in the past 10 months, and erased the effects of financial crisis following the collapse of the Lehman Brothers Holding Inc – which, if you wind the clock back, was almost a year ago. How time flies.

This share rise also had a domino effect with Richemont and LVMH shares both increasing, 5.5 percent and 3.3 percent respectively.

Article by: Melinda O'Rourke