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Swatch, the maker of Tissot and Longines watches, said big spenders are trading down to its cheaper brands as it posted expectation-beating profits of Swfr 301 million (£169 million) for the first six months of the year.
The Swiss watchmaker said sales of its luxury marques Blancpain and Omega, once the must-have buy for City traders, have been hit by the downturn, but predicted that second-half sales will be back at last year's level.
First-half sales fell 17%, less than analysts expected.
Chief executive Nick Hayek blamed retailers for being “scared” of placing orders. He said jewellers had been running down stock built up during the boom years, while others were hamstrung by banks after credit markets tightened.
Hayek said: “The very high-end brands such as Blancpain, Breguet and Glashütte are having a more difficult time, not with respect to customers — they are buying — but because retailers are scared about ordering watches costing $200,000, $300,000, $400,000.”
But he said retailers were starting to order watches across Swatch's range at a normal level again.
The results triggered a rise in share prices of luxury goods makers across Europe. Richemont, which makes Cartier watches, jumped 7% in Zurich, while LVMH gained 7% in Paris.
