Swatch optimistic despite sharp drop in profits

Swatch group profits were nearly halved last year as global watch market weakness took its toll, the Swiss company reported on Thursday, but predicted "healthy growth" ahead.

Swatch optimistic despite sharp drop in profits
File photo: Fabrice Coffrini/AFP
Swatch owns luxury brands such as Breguet, Omega, Longines, Hamilton and Calvin Klein watches.
Net profit fell 47 percent to 593 million Swiss francs (554 million euros, $598 million), compared with analysts' forecasts centred on 666 million.
Sales were also below target at 7.5 billion francs, compared to expectations of 7.7 billion.
Watch and jewellery sales dropped by just under 11 percent as a marked slowdown in 2015 ran into early 2016, it said.
The end of last year, however, saw fresh movement in sales, especially in China, Swatch said.
“The months of November, December and January showed, particularly in mainland China, very good growth in the Watches and Jewelry segment, with a substantial improvement in operating margin,” the group said in a statement.
“Based on the positive development of the last three months, healthy growth is expected for the year 2017,” it said.
Swiss watchmaking had a bad year in 2016, when the industry's sales dropped by ten percent after a 3.3 percent fall in 2015, calling time on five years of uninterrupted growth.

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Swiss watchmaker Swatch wins latest trademark battle with Apple

A top Swiss court on Thursday handed the watchmaker Swatch victory in a trademark dispute with US technology giant Apple – the latest in a series of legal disputes between the two firms.

Swiss watchmaker Swatch wins latest trademark battle with Apple
Swatch Group CEO Nick Hayek with the Zero One wristwatch in 2014. File photo: AFP

In the current case, Apple had alleged the Swiss company’s ‘Tick different’ slogan was too similar to the US company’s ‘Think different’ slogan of the 1990s.

Apple originally filed an objection with the Swiss Federal Institute of Intellectual Property, but that organisation turned down the complaint.

Read also: How luxury watchmakers are gearing up for Brexit

The US company then took the case to the St-Gallen based Federal Administrative Court.

To have a chance of winning its case against Swatch, Apple had to prove that the famous slogan – the related TV commercial won an Emmy for Outstanding Commercial in 1998 – had more than 50 percent recognition in Switzerland.

However, the Federal Administrative Court ruled Apple had not provided sufficient evidence that this was the case and found in Swatch’s favour.

The evidence for awareness of the slogan in Switzerland consisted of just several articles on Apple in Swiss broadsheet NZZ.

This dispute was just the latest in a series of legal confrontations between the two companies.

In 2007, Swatch, which is headed up by charismatic businessman Nick Hayek, trademarked the term ‘iSwatch’ before Apple was able to register the term ‘iWatch. 

The Swiss watchmaker also trademarked the expression ‘One more thing’, which was made famous by Apple co-founder Steve Jobs.

Apple has had other legal problems in Switzerland. In 2012, it reportedly paid 20 million Swiss francs (€17.8 million) to Swiss Federal Railways to avoid going to court over its use of the design of the Swiss railway clock in its i06 operating system.