By John Revill
GRENCHEN, Switzerland--The decision by Switzerland's central
bank to scrap a long-standing policy of capping the value of the
franc earlier this year has hurt the country's businesses, the
chairwoman of Swatch Group AG (UHR.VX) said Thursday.
Chairwoman Nayla Hayek said the world's largest watchmaker faced
a difficult economic environment caused by the rapid appreciation
of the franc against the euro, the currency of one of Biel-based
Swatch's most important markets. The rise in the franc reduces the
number of francs Swatch records on its sales in the Eurozone, and
also cuts the company's profitability.
Ms. Hayek expressed disappointment the Swiss National Bank
abandoned the policy of capping the franc at 1.20 francs per euro,
saying it had left "Switzerland and its employers high and dry."
But she added that the company would be able to weather the
difficult situation as it has in the past.
At the same meeting, Swatch Chief Executive Nick Hayek said
demand for watches remained good around the world. Figures
published Thursday showed Swiss watch exports rose 2.1% year on
year in the first four months of 2015.
"I take this as a signal that consumption worldwide is good,
very good," he said. He added that he hoped the franc would weaken
later in the year.
Mr. Hayek also said that Swatch will launch its own smartwatch
with remote payment functions this summer. The Swatch smart watch
would be launched first in Switzerland and "one big country," he
said, without elaborating.
Rather than launching a dedicated smartwatch, Swatch is
integrating some smart functions into its existing lineup of
timepieces by using a wireless technology known as near-field
communications. That technology will allow the watch to be used for
tasks like cashless payments and hotel-room access.
The watch is Swatch's response to Apple Inc.'s (AAPL)
smartwatch, which was launched earlier this year, as well as
similar devices produced by Samsung Electronics Co. Ltd. (SSNHZ)
and others.
Write to John Revill at john.revill@wsj.com
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