Accounts in the red for Swatch in 2020 for the first time in almost 40 years. Due to the coronavirus crisis, the world’s largest watch manufacturer suffered a loss of 53 million francs in 2020, compared with a profit of 748 million in the previous year. To find a deficit in the company’s history, it is necessary to go back to 1983, the year the company was founded in its current form and the launch of the Swatch plastic watch.
The containment measures of the pandemic, the closures of shops and the travel restrictions have severely affected the activity of the group, which – according to data released today – closed the year of the pandemic with a decrease in revenues of 32% to 5 , 6 billion francs. In the current year, the Swiss company expects a strong recovery in demand: the management therefore believes it is possible that sales in local currencies will return to approach the pre-pandemic levels of 2019. Profit margins should also improve significantly. Given the bad performance of 2020, however, the board of directors proposes in the meantime to lower the dividend, from 5.50 to 3.50 francs. As expected, investors did not like this step, who also looked at the critical judgments of analysts: the data are worse than expected, and than presented by other giants of the so-called luxury segment such as Richemont and LVMH. Consequently, the Swatch stock has come to lose almost 4% on the stock exchange. Swatch is the most important watch manufacturer on the planet in terms of finished items placed on the market. It manages 18 brands (three examples: Omega, Tissot, Longines) and employs over 36,000 people worldwide. The company was founded by Nicolas Hayek (1928-2010), an entrepreneur of Lebanese origin, born and raised in Beirut and moved to Switzerland in 1949 with his family. His son Nick Hayek is currently CEO of the group, while his daughter Nayla Hayek is chairman of the board. According to economic historians, the work of the Hayeks made a decisive contribution to saving the Swiss watch sector, which at the end of the 1970s had gone into crisis in the wake of low-cost Asian production.
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