Swatch Group AG’s Omega watch brand will reach annual sales of 3 billion Swiss francs ($3.1 billion) as it adds shops in the U.S. and the new Ladymatic model helps boost revenue, Chief Executive Officer Nick Hayek said.
The world’s largest watchmaker, whose 18 brands include Breguet, Longines and Tissot, plans to hire 1,000 to 2,000 employees to resolve capacity constraints because it can’t keep up with orders, Hayek said in a phone interview today. Omega will reach its sales target “soon,” he said, declining to provide a more specific timeframe.
“Demand is so big we don’t know how to cope,” the executive said. “It’s a good problem to have. We could not build any stock up for Christmas. This is something we never saw before.”
Swatch Group, based in Biel, Switzerland, said today that sales rose 19 percent to 6.44 billion francs in 2010, led by demand for luxury brands in Asia, central Europe and the Middle East. The company would have added another 500 million francs of sales if Breguet, Omega, Blancpain, Longines and Swatch’s production had kept up with demand, the CEO said.
The company’s “biggest headaches” in 2010 were capacity constraints and the strength of the franc, said Hayek, who is 56. The franc gained 19 percent against the euro last year.
Longines may reach 1 billion francs of sales in 2011, and Swatch, Breguet and Tissot may also reach that level eventually, Hayek said. Swatch Group could eventually reach annual revenue of 10 billion francs based on the growth of its existing brands, the executive said, declining to forecast when.
Omega opened 10 boutiques at the end of 2010 in U.S. cities such as Nashville, Tennessee and Hackensack, N.J. The brand will open 20 more U.S. shops in the next four months, Hayek said. The average price for Omega watches sold in company-owned stores is 2.5 times the average price for an Omega sold by other retailers in the U.S.
“You have to take Omega as a new force in the U.S.,” Hayek said. The brand will add about 50 total stores in that market, he said.
The Ladymatic, which sells for 5,000 francs to 32,000 francs, was introduced at the end of last year, with ads featuring Nicole Kidman. The watch, which has silicon components, comes with a four-year guarantee, twice as long as normal. The model has almost sold out, Hayek said.
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