Swatch posts 20% profit rise on Tiffany compensation

A model poses for the Swatch match campaign (SWATCH)

The world's biggest watchmaker, Swatch, stretched its lead over the rest of the industry today, generating record sales last year and seeing an "auspicious" start to 2014.

Despite currency headwinds as investors looking for safe havens drove up the value of the Swiss franc, the firm posted sales of 8.82 billion SwFr (£5.6 billion) in 2013, up more than 8 per cent.

This growth was more than four times faster than the 1.8 per cent rise in exports seen by the Swiss watch industry overall, “generating a significant increase in market share”.

The sales momentum has continued into January with all Swatch’s brands — including the pricey Omega sported by Daniel Craig’s James Bond — starting well, Swatch said.

Profits fared even better, topping forecasts with a 20 per cent rise to 1.92 billion SwFr (£1.33 billion), boosted by a payment of 402 million SwFr in damages from US jeweller Tiffany.

Tiffany warned on profits in December after a court ruled in Swatch’s favour over a failed joint venture struck in 2007 to make watches together under the Tiffany brand.

The Chinese market is also expected to recover this year after a government crackdown on bribery “gifts”. Swatch fared better than rivals as its Tissot and Longines brands still sell well to China’s rising middle classes.