United States consumers now face a price increase of up to 10% on Swatch products due to the implementation of tariffs.

The Swatch Group, the world's largest watch group founded in 1983, has announced a substantial drop in net profit for the first half of 2021. The group's net profit has decreased by 88.4%, falling from 3.445 billion Swiss francs (3.696.05 billion euros) in the same period last year to 3.059 billion Swiss francs (3.282 billion euros) in the first half of 2021.

This decline can be attributed, according to the group, "exclusively to China". Wholesale sales in China fell by more than 30%, while its own stores shrank by half, 15%. As a result, China, which once accounted for 33% of the group's total sales, now represents 24% of the total.

Despite this challenging period, the Swatch Group's portfolio of brands, ranging from luxury segments such as Omega, Longines, or Breguet, to distribution brands like the namesake Swatch or Flik Flak, reported an operating result of 68 million Swiss francs (72.96 million euros), a decrease of 66.66% compared to the same period last year.

The group's CEO, Nick Hayek, has appealed for investor calm over the price increase and the market plunge in China. In an effort to offset tariff policies, Swatch has announced a price increase of between 5% and 10% on its products in the United States. However, no mention of this impacting the sales drop in China is made in the article.

In a positive note, Swatch recorded a net profit of 17 million Swiss francs for the first half of 2021, despite the significant drop compared to the same period in the previous year. The group also expects an improvement in sales in China in the second half of the year due to a possible increase in consumption.

The result before taxes also fell by 68%, from 72 million Swiss francs (77.25 million euros) to 225 million Swiss francs (241.40 million euros). This decline in profit, particularly in the first half of the year, is a stark contrast to the group's net profit for the first half of 2020, which stood at 3.445 billion Swiss francs, or 3.696.05 billion euros.

United States consumers now face a price increase of up to 10% on Swatch products due to the implementation of tariffs.