The Swatch Group In 2000: Another Record-Breaking Year
On 2 May this year, The Swatch Group, headed by Nicolas Hayek, its Chairman and Managing Director, presented its annual report 2000 to the press.
1999 was a record year for The Swatch Group, and the last financial year was exceptional with 4.263 billion francs turnover and a 651 million net profit. At the Annual General Meeting on 22 May, the Board of Directors will therefore be proposing a partial reimbursement of the nominal value of shares to the shareholders, i.e. 172 million francs equivalent to more than twice the dividend received last year.
The Swiss Federal Council has enacted legislation allowing the nominal value of shares to be reduced to one centime. The Board of Directors of The Swatch Group will therefore be proposing to the next General Meeting a ten to one split of the Group’s shares. The current value of the registered share is ten francs: after the partial reimbursement, it will be worth 4.50 francs and once the split has been completed the nominal value will be just 45 centimes. The same calculation will be applied to the bearer share; it will decrease in value from 50 francs to 2.25 francs.
The press conference held on 2 May provided an opportunity for the group to introduce its different projects. According to Mr Hayek, the luxury sector is going through an adjustment process. His group has decided to invest 2 billion francs in new technologies and in the creation of new production units. Another strategic aspect is the development of the “retail” division. This provides a direct link with the customer and an increasing number of the group’s brands, in particular those belonging to the luxury watchmaking division will be opening boutiques exclusively dedicated to their respective labels (Glashütte, Omega, Swatch, Breguet, Blancpain, Léon Hatot). Other boutiques will offer several different brands. Boutiques of this kind will be inaugurated in the course of the year in Cannes, London, Frankfort and New York. Mrs Arlette Emch stated that: “retail outlets guarantee control of the brand’s image”.
Mr Anton Bally introduced Tissot’s T-Touch (see picture), a watch equipped with many functions (altimeter, compass, weather reports, temperature, chronograph) activated by a gentle touch on the crystal glass.
Mr Michele Sofisti talked about the Skin Chrono by Swatch. Its 6.6 mm thickness makes it the flattest watch in the world.
Mr Nick Hayek junior recognised that the Internet has become an undeniable commercial force and unveiled the virtual shop opened by Swatch to meet the demand of the American market. This site can be accessed from anywhere in the world but shipments will only be made to US residents. Mr Hayek pointed out that this idea will probably never be applied to luxury brands. A client willing to pay a large amount for a watch would not want to do without visual and tactile contact with the desired object and benefit at the same time from the advice of a specialist before making his decision.
Records are made to be broken. The Swatch Group proved the point yet again with its year 2000 results!