Mar 17, 2022
Swatch Group sees no big business impact from Russia crisis
Mar 17, 2022
Swiss watchmaker Swatch Group does not expect a material negative impact on its sales or regarding access to raw materials following Russia's invasion of Ukraine, its Chief Executive said on Thursday.
Nick Hayek said Russia accounted for around 1% of group sales and it didn't source any gold from the country that has been hit by western sanctions. The company's cheaper Tissot and Swatch labels were its biggest brands in Russia, showing its business there was "not only oligarchs," he told a press conference on its already announced annual results.
"We have no sources (of) gold in Russia," Hayek said. "The other precious materials, we also have a lot of stock and multi sourcing ... so for the Swatch Group, we see no impact, except for prices that will maybe go up over the mid or long term."
"We are shocked about the situation, it's only been three weeks," Hayek said. "We should all take three deep breaths and hope a solution will be found."
The group, also known for Omega and Longines timepieces, said last week it had temporarily suspended the operations of its stores in Russia "due to the increasing complexity and difficulty of the situation" after initially only halting exports.
Doing business in Russia has become complex since Russia's invasion of Ukraine, which prompted the United States, Britain and the Europe Union to impose sweeping sanctions.
Only about 1% of Swiss watches were exported to Russia last year, watch federation statistics show, but wealthy Russians also like buying luxury goods abroad.
Swatch Group sells many watches via wholesale partners, but Hayek said it also had 52 stores in Russia.
One of its brands, Longines, opened its first flagship store in Moscow last year and Swatch Group's more affordable Tissot brand also developed its retail network and signed agreements for new monobrand pop-up stores in various regions in Russia. Its Swatch brand also opened two new stores in Moscow last year.
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