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Swatch Group Returns to Profit, Sees Strong Sales Ahead

SwatchPAY! watches, usable for pay-by-the-wrist contactless payments, are seen at the shop of Swiss watch manufacturer Swatch in Zurich, Switzerland April 14, 2021. (Reuters)
SwatchPAY! watches, usable for pay-by-the-wrist contactless payments, are seen at the shop of Swiss watch manufacturer Swatch in Zurich, Switzerland April 14, 2021. (Reuters)
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Swatch Group Returns to Profit, Sees Strong Sales Ahead

SwatchPAY! watches, usable for pay-by-the-wrist contactless payments, are seen at the shop of Swiss watch manufacturer Swatch in Zurich, Switzerland April 14, 2021. (Reuters)
SwatchPAY! watches, usable for pay-by-the-wrist contactless payments, are seen at the shop of Swiss watch manufacturer Swatch in Zurich, Switzerland April 14, 2021. (Reuters)

Swiss watchmaker Swatch Group said it expected double-digit sales growth in local currencies this year after sales and profits recovered in 2021.

It returned to a net profit of 774 million Swiss francs ($845 million), from a 53 million loss in 2020, while sales at constant currency rose nearly 30% to 7.31 billion francs, the maker of Omega and Longines watches said in a statement on Tuesday.

Sales of Swiss watches recovered strongly last year from the slump caused by pandemic-related lockdowns, but Swatch Group has been losing market share to industry major Rolex and connected watches like the Apple Watch.

Its shares, which rose significantly less than peers last year, fell out of the blue-chip SMI index in September.

Peer Richemont also posted a sales jump this month thanks to its strong jewellery business amid a wider luxury goods revival.

Swatch Group's operating margin reached 14%, after 0.9% last year and 12.4% in 2019. Its Watches & Jewelry segment (excluding production) had an operating margin of 17.7% for the entire year and 18.4% in the second half.

It said its board of directors would decide on its dividend proposal at its next meeting.

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Zalando Uses AI to Speed Up Marketing Campaigns, Cut Costs

FILE PHOTO: A person with a shopping bag of Zalando outlet walks along Kurfuerstendamm shopping street looking for bargains in Berlin, Germany, December 3, 2022. REUTERS/Lisi Niesner/File Photo
FILE PHOTO: A person with a shopping bag of Zalando outlet walks along Kurfuerstendamm shopping street looking for bargains in Berlin, Germany, December 3, 2022. REUTERS/Lisi Niesner/File Photo
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Zalando Uses AI to Speed Up Marketing Campaigns, Cut Costs

FILE PHOTO: A person with a shopping bag of Zalando outlet walks along Kurfuerstendamm shopping street looking for bargains in Berlin, Germany, December 3, 2022. REUTERS/Lisi Niesner/File Photo
FILE PHOTO: A person with a shopping bag of Zalando outlet walks along Kurfuerstendamm shopping street looking for bargains in Berlin, Germany, December 3, 2022. REUTERS/Lisi Niesner/File Photo

European online fashion retailer Zalando is using generative artificial intelligence to produce imagery faster for its app and website, it said on Wednesday, as AI shakes up the fashion industry and cuts costs.
Zalando, which sells branded clothes, shoes, and accessories across 25 markets in Europe, is using AI to produce imagery quickly enough to respond to short-lived fashion trends spread on social media. It is also developing AI-generated "digital twins" of models to use in its marketing.
"We are using AI to be able to be reactive," Matthias Haase, vice president of content solutions at Zalando, told Reuters in an interview.
Using generative AI cuts the time needed to produce imagery to around three to four days from six to eight weeks, and reduces costs by 90%, Haase said, adding the AI-generated content drives greater engagement from customers.
"It's not because of AI content that is better than human-created content, it is really about how new, how relevant it is to our customers," Haase added.
Around 70% of Zalando's editorial campaign images were AI-generated in the fourth quarter of last year as it has increased use of the technology. AI-generated images illustrated Zalando's recap of the year's biggest trends, including "brat summer", "mob wife", and double denim.
For an industry used to costly, meticulously planned fashion shoots on sets or in far-flung locations, the prospect of using AI to speed up production and use marketing money more efficiently is of particular appeal to retailers with far smaller budgets than the big, luxury players.
Zalando is the latest retailer to try out AI-generated digital twins of models, after Sweden's H&M in March said it created digital twins in collaboration with a modelling agency.
The AI-generated three-dimensional replicas enable Zalando to feature a model in a campaign and show an exact replica of that model in the app's product pages, without needing to take hundreds of photos.
Asked how generative AI could affect job prospects for fashion photographers, Haase said traditional fashion shoots will still be needed, but that photographers and other creatives will also have to adapt to using AI tools.
"Creative people fear that AI makes creatives redundant," Haase said. "I don't see that at all, to be honest... I see it rather that creative minds have now, instead of two hands, six hands."