Watches & Jewelry Division Boosts Swatch H1 Results
July 23, 13
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Net income showed an increase of 6.1 percent from the year-earlier period to CHF 768 million ($820 million), and a 19.2 percent return on net sales.
The firm reported sustained growth in all regions, and says its outlook for the second half of 2013 is positive.
The leading global watch maker, its brand portfolio contains 20 brands. It said the integration of the Harry Winston retail division, that it bought for around $1 billion late last year, will only really become noticeable in the second half of this year.
The Watches and Jewelry unit, which now also includes production activities, continued to remain the growth driver. "A great deal of investment has been plowed into the marketing activities of all of the brands, ranging from investment in new groundbreaking innovations to investment relating to the redesign of booths for the Watches and Jewelry Fair Basel [BaselWorld].
"The acquisition of the Harry Winston brand did more than simply round off the group’s already broad brand portfolio; it also expanded the high jewelry segment, along with the segment’s value chain from production up to and including the retail network. This infrastructure was also provided with the investment required to better utilize the huge potential offered by the brand and its organization.
"Furthermore, in the first few months following the acquisition, all debts were settled, the equity capital base expanded and, during this process, the inventory was also immediately increased. The latter was initiated in order to ensure that our clientele has access to the best selection of jewelry as well as to increase its availability. As the name Harry Winston is synonymous with the finest high jewelry featuring the most beautiful diamonds, in May we invested in the singular, largest and purest diamond in the world to date. This 101.73-carat diamond now bearing the name “Winston Legacy” was acquired for $26.7 million and reconfirms the number one position of this high jewelry brand. The Harry Winston brand also has an extremely large and almost untapped potential in the watch sector, which the group now aims to expand further using its experience around the world. The necessary funds will also be invested into this activity.
"The outlook for the group remains very promising, and a strong second half-year is expected. The continued integration of the Harry Winston brand will also make a significant contribution, as this brand has huge, almost untapped market potential in the high jewelry and watches activities," the firm said.