Swatch Group said it expected sales and profits to improve quickly in the months ahead after the coronavirus pandemic caused a “massive decline” in business for the first half of the year.
The watchmaking industry has been hit hard by the pandemic this year as stores closed across Asia, Europe and the United States.
Swatch recorded a drop in sales of -46.1% to CHF2.2 billion ($2.34 billion) in the first six months of 2020, it said in a statement on Tuesday.
It posted a net loss of CHF308 million, after a net profit of CHF415 million francs in the previous year.
However, Swatch said the group had returned to a positive operating result in June. It said it was observing very high demand in markets which had come out of lockdown, including double-digit sales growth in mainland China in May and June.
“The Group’s management is convinced that the sales and profit situation will improve quickly in the coming months, parallel to the further easing of Covid-19 measures in the countries,” it said.
“This positive outlook is strengthened by new products which will be launched in the second half of the year, as well as the lower cost base. This will lead to increased production capacity in the third and fourth quarter 2020.”
Swatch said it expected a positive operating result for the full year.
Despite the postive outlook, Bloomberg news agency reported on Tuesday that Swatch Group had cut 2,400 jobs, a record cull, and trimmed its store network due to the financial pressures.
The company said it had accelerated plans to shut stores permanently in Hong Kong as well as shops that sell its Swatch brand and Calvin Klein timepieces.
The job cuts were mainly at stores, as Swatch held on to production workers, Bloomberg reported. The company closed 260 stores and now has about 1,800.