Swiss watch-maker Swatch Group, owner of Longines, Omega and Tissot, announced on Friday it is halting its exports to Russia, in the wake of the sanctions imposed following the invasion of Ukraine, even though the group’s Russian stores remain open.
“The Swatch Group is monitoring and analysing the situation very closely,” stated the Swiss group in a message to the AFP agency, confirming information published by WatchPro, a specialist watch industry magazine. “For the time being, we have put all our exports to Russia on hold owing to the troubled general situation,” added Swatch.
All of the Swatch Group’s subsidiaries and employees in Russia continue in their activities and “our stores in the country remain open,” added the group, renowned for its colourful plastic watches but also for its extensive portfolio of luxury watch brands, without disclosing its revenue in the country.
Swatch is based in Bienne, where a large part of Switzerland’s watch output comes from, and owns 17 brands, ranging from children’s watches Flik Flak to prestige brands such as Breguet and Blancpain, to a fine jewellery brand like US diamond specialist Harry Winston, bought by Swatch in 2013.
According to Jean-Philippe Bertschy, an analyst at Vontobel, Russia accounts for approximately 2% to 3% of the group’s sales, and “for less than 5% of [the purchases by] Russian consumers in general.” A significant portion of watch purchases is notably made by consumers during trips abroad.
At 9.43 a.m. GMT on Friday, the Swatch Group’s share price was down by 5.14% to CHF247.30, while the SPI, Switzerland’s broader stock market index, had dropped by 2.32%.
Besides the market’s exposure to Russia, the main issue is understanding what the “lasting economic consequences triggered by this invasion will be,” said Bertschy, acknowledging to AFP that it is currently still “difficult to estimate the negative impact this conflict will have on the luxury sector at large.”