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Swiss watchmaker Swatch predicts record sales this year as China reopens and tourism picks up after Covid-19 to boost sales in the region.

Net sales increased by 4.6% to 7.5 billion francs last year at constant exchange rates, compared to the previous year. Operating profit rose 13% to 1.16 billion Swiss francs ($1.3 billion), excluding analysts’ forecast of 1.19 billion Swiss francs.

However, sales increased by 25% in local currencies in all regions except China, where Covid-19 lockdowns resulted in a shortfall of more than 700 million Swiss francs, Swatch said. .

“After the end of the Covid-19 measures, consumption quickly picked up, not only in China, but also in the surrounding markets of Hong Kong SAR and Macao,” Swatch said in a statement on Tuesday.

The easing of travel restrictions in China will “reinvigorate sales in tourist destinations”, he added, saying that January’s sales growth in China “reinforces the group’s expectation to aim for a record year in 2023”.

Beijing’s zero Covid strategy over the past three years has “severely dampened” growth, he said.

Swatch has “massively” increased inventory, spending on raw materials, work in progress and semi-finished goods, given potential energy shortages and bottlenecks in deliveries, it said. .

“This measure will also pay off, given the surge in demand in China following the release of its zero Covid strategy,” he said.

The company recorded double-digit sales growth in Europe, America, the Middle East and most of Asia, excluding China.

Swatch launched the MoonSwatch collaboration, a £207 plastic version of Omega’s Speedmaster in March, prompting thousands of shoppers around the world to line up to buy it. It garnered 1 million sales.

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