By Michelle Graff
Biel/Bienne, Switzerland-- Swatch Group reported Thursday that its profits declined sharply in 2014, amid moves it is making to combat the strong Swiss franc and launch a competitor to Apple Watch.

In its full-year report released Thursday, Swatch Group reported that gross sales in 2014 were nearly $10 billion, a 5 percent increase as compared with 2013 when gross sales totaled $9.57 billion.

Net sales climbed to $9.4 billion from $9.2 billion, a 2 percent increase year-over-year.

Operating profit, however, dropped 24 percent to $1.9 billion from $2.5 billion in 2013. Net income also declined, totaling $1.5 billion, a 27 percent decrease year-over-year.

In its Watch & Jewelry segment specifically, without production, gross sales rose 6 percent and net sales climbed 4 percent in 2014, “despite an ongoing long-term defensive price adjustment policy,” Swatch Group said.

Exports of wristwatches for the entire Swiss watch industry to the end of December 2014 increased about 2 percent.

The company reported that all brands made additional marketing investments last year in markets they believe will grow: the United States, Japan and mainland China. Omega, specifically, signed a renewal contract until 2022 with the U.S.’s PGA Golf tour and Longines increased its presence in the equestrian industry, mainly in Japan and the U.S.

Going forward, the company said several brands have raised their prices between 5 and 7 percent in select markets to “compensate for the very unfavorable currency situation,” referring to the Swiss franc’s comparable strength against the euro and U.S. dollar after it was untethered from the euro last month.

In addition, various news sources including Bloomberg reported this week that Swatch Group plans to release and begin selling a smartwatch within the next three months, one that will allow consumers to make mobile payments, work with Windows and Android software, and operate without needing to be charged.

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