Swatch Group sees sales growth in China in 2014

GENEVA (Reuters) - The world's biggest watchmaker Swatch Group expects sales in China to grow in local currencies this year, its chief executive said at the company's annual results conference on Thursday. "I see growth in China, but in local currencies because the current problems everywhere in the world put upward pressure on the Swiss franc," Nick Hayek told journalists at jewellery brand Harry Winston's factory in Plan-les-Ouates near Geneva. Executives of the group's high-end brands, such as Breguet and Omega, said sales had turned positive since the beginning of the year. Watchmakers sold less in China last year after the government cracked down on gift-giving of luxury items, but Swatch has fared better than others because it is less exposed to the high-end segment. Sales growth at the group's more affordable brands, such as Longines and Tissot, had not slowed down and was still strong in China, Hayek said. Swiss export data showed on Thursday that watch exports rose 7 percent in February. Exports to mainland China were down 0.7 percent, but shipments to Hong Kong, their biggest market, rose 18.7 percent. Hayek said he expected the industry as a whole would grow 5-10 percent this year. Asked whether Swatch would be able to do better, he said: "I cannot give you a precise forecast but we should have good growth in local currencies." In January, Hayek had said double-digit sales growth should be possible in 2014. On Thursday, he warned currency fluctuations might knock 400-500 million Swiss francs off sales this year if exchange rates stayed at current levels. Switzerland's watch industry, which produces almost exclusively in Switzerland, is under pressure from a strong Swiss franc that makes its products more expensive abroad. The maker of Omega watches and Harry Winston jewellery posted an 8.3 percent rise in 2013 gross sales to 8.82 billion Swiss francs ($10.08 billion) and a 20.2 percent jump in net profit to 1.93 billion francs earlier this year. Shares in Swatch fell 1.9 percent by 1200 GMT. (Reporting by Silke Koltrowitz; editing by Keiron Henderson)