Swatch Group’s share price is in the doldrums after falling 25% from a peak of CHF 342 in early March to CHF 257 this week.
But it is far from alone among luxury businesses to have suffered a reaction from the markets to this year’s economic headwinds.
Watches of Switzerland Group’s stock is down from an all time high of £14.70 to £6.13 this week.
Omega is in the news for all the wrong reasons with the Speedygate scandal denting trust in its archivists.
Overall, Swatch Group has been growing more slowly than the wider Swiss watch market.
Revenue rose by 2.5% in 2022 at prevailing exchange rates, while exports for the entire Swiss watch industry were up by 11.4%.
According to the annual Morgan Stanley report on the state of the Swiss watch industry, Longines and Tissot, Swatch Group’s second and third biggest brands after Omega, saw sales drop in 2022 by 22% and 12%, respectively, the only two brands among the top 20 Swiss watchmakers to register falling revenues last year.
However, this is not a column about kicking a company when it is down (it would be ludicrous to label a growing company with turnover last year of CHF 7.5 billion as down).
Quite the opposite.
What these figures and financial market reactions overlook is a vastly improving line up of products and signs that the group is finding its feet with innovative marketing initiatives and retail partnership programmes.
Swatch Group has consistently insisted it will never return to global trade shows after it turned its back on Baselworld in 2018.
All its major rivals looked long and hard at this decision, but almost all are now back at the revamped Watches and Wonders.
Swatch Group should do the same, in my opinion.
But investment in smaller, local marketing activations are working. Omega’s Her Time House in London this spring was a triumph.
Rado’s three year sponsorship deal for the England men’s and women’s cricket teams, starting in time for this summer’s Ashes, has dramatically raised the brand’s profile with a British and global audience.
Rado is also the number two watch brand on Tiktok, with its most-watched video viewed by 5.1 million potential customers.
It is on the product front that Swatch Group is making the greatest strides.
Omega’s Seamaster range, including the Aqua Terras, has been improving for years, and this week’s unveiling of an entirely new suite to mark the family’s 75th anniversary, is a perfect mix of style, heritage and precision engineering.
And I’m told the launch event in Mykonos was a good deal more fun than a grey day in Basel.
Longines’ line up better today than for many years.
Core collection Spirit and Hydroconquest watches hit all the right notes for today’s consumers.
But it is the somewhat unsung Legend Diver range’s blend of tradition, sporty styling and eye-catching colours that stand out for me.
Longines is unarguably the leader in its price range, in my view, with exceptional value for money watches in the £2,000 to £4,000 space.
Even more affordable, and no less desirable are the current collections from Tissot.
The PRX has been a breakout hit since its reintroduction with quartz and automatic models in 2021, and powerful marketing campaigns across social media have introduced Tissot to an entirely new generation of young customers.
Tissot has followed up with the revival of its Sideral Powermatic collection of 1970s styled automatics in popping red, blue and yellow looks for under $1,000.
Tissot, Longines and other Swatch Group brands such as Certina, Rado and Hamilton, benefit from the movement making of ETA, which is now all-but exclusively manufacturing for the group’s brands.
Purists will contest whether brands can therefore say they are using inhouse movements but, regardless, these are advanced calibres with production at scale that delivers excellent value for money.
Omega is rolling out boutiques, mostly with independents and major multiples, plus its own corporate monobrands.
Longines is just starting a similar programme.
Tissot needs stronger distribution, but it has a great story to tell to prospective partners.
Brands like Rado, Certina and Hamilton are likely to get noticed as they up their marketing games.
It is too early to say that all this activity is going to lead to a strong rebound for Swatch Group.
I personally think its key brands need to return to Watches and Wonders as part of a broader strategy to build the strongest possible relationships with the press and retailers (who have such a strong influence over consumers), but I recognise that many of their recent initiatives are designed with the same purpose, and cost a lot less than the reported $50 million per year the group sank into Baselworld at the end.
Swatch Group is a CHF 7.5 billion supertanker, which takes enormous forces to change course, but there have been discernible nudges to the tiller that are already delivering results.