Executive Briefings

At Omega, a New Factory for Orders From China

August frustrates Raynald Aeschlimann, president and chief executive at Omega.

When he welcomed a guest to his office for a tour of the company's new production building here early last month, the 47-year-old chief executive was clearly unhappy. Production was running at just 60 percent of capacity, largely because Omega suppliers still shut down for almost the entire month, a summer holiday tradition in Europe.

“I want to run a full 52 weeks,” he said, gesturing toward the adjacent building where, the tour later showed, rows of assembly desks were only about half occupied.

Like most Swiss watch brands, Omega and its parent company, Swatch Group, have had a rough few years. Omega experienced a sharp drop in sales in 2015, which it linked to China’s economic slowdown and the government’s continuing crackdown on corruption and high-priced gifts.

But while Swatch does not break out sales or revenue by brand, its recent half-year report announced growth in June and July for all its brands, especially the luxury segment that includes Omega, and included a strong outlook for the rest of the year.

Aeschlimann called June a “strong month” for Omega, noting double-digit sales growth in China, its star market.

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When he welcomed a guest to his office for a tour of the company's new production building here early last month, the 47-year-old chief executive was clearly unhappy. Production was running at just 60 percent of capacity, largely because Omega suppliers still shut down for almost the entire month, a summer holiday tradition in Europe.

“I want to run a full 52 weeks,” he said, gesturing toward the adjacent building where, the tour later showed, rows of assembly desks were only about half occupied.

Like most Swiss watch brands, Omega and its parent company, Swatch Group, have had a rough few years. Omega experienced a sharp drop in sales in 2015, which it linked to China’s economic slowdown and the government’s continuing crackdown on corruption and high-priced gifts.

But while Swatch does not break out sales or revenue by brand, its recent half-year report announced growth in June and July for all its brands, especially the luxury segment that includes Omega, and included a strong outlook for the rest of the year.

Aeschlimann called June a “strong month” for Omega, noting double-digit sales growth in China, its star market.

Read Full Article