Turnover for The Swatch Group UK Limited, distributor and retailer for Omega, Longines, Tissot and all other group brands in the UK and Ireland, dropped by 39% in 2020 as the pandemic forced stores to close.
Reported sales for the UK business had risen sharply in 2018 and 2019 after a structural change meant the business expanded from operating as an agent for Swatch Group to becoming a full service wholesaler as well as a retailer for its brands.
Swatch Group UK sales dropped from £180.5 million in 2019 to £110.3 million in 2020.
Operating profit fell 81% from £9.8 million to £1.9 million, despite the company cutting distribution and administrative expenses for the year by £13 million and receiving £3.1 million from the Coronavirus Job Retention Scheme and its equivalent in Ireland.
“The decrease in pre-tax profit and turnover are driven primarily by the impact of covid-19 and the disruption caused both to retail and wholesale as a result of government restrictions and lock downs,” the company says in a strategic report accompanying the accounts.
The total number of employees in sales and distribution dropped from 335 at the end of 2019 to 262 by the end of 2020, trimming £3 million from the annual wage bill. Customer service employees were stable at 141 people.
Swatch Group’s UK results were broadly in step with the global performance which saw sales fall from CHF 8.2 billion to CHF 5.6 billion (down 31%).
In the UK, Swatch Group’s results compare less favourably with Rolex, which reported a 13% rise in sales in 2020, and LVMH Watch & Jewellery, which reported sales for TAG Heuer, Hublot and Zenith down by 9% last year. Richemont’s financial year ends on March 31, so has not yet published accounts for the pandemic-affected year beginning April 1, 2020.