Swatch Group upbeat on 2011 despite strong franc

ZURICH (Reuters) - Swatch Group , the world's largest watchmaker, gave an upbeat outlook for 2011 as it expects strong demand for its watches to help offset the impact of the soaring Swiss franc.

Swatch Group, best known for its colorful plastic Swatch watches, notched up sales of 6.4 billion francs in 2010 in another record year for the group as consumers in Asia, Central Europe and the Middle East bought its luxury watches.

The company, which also owns higher-end brands such as Breguet, Blancpain and Omega, said sales had grown at a double-digit rate so far in January.

Its upbeat comments echo those from luxury groups Richemont , Tiffany and Burberry .

The company, which unexpectedly released its sales figures, is due to post full-year results in February. The group said it sees a rise in net income compared to 2009, while profitability is also expected to be better.

"Very strong set of figures which were a shade better than we expected, again driven by Asia. The January comment -- double digit local currency sales already -- is very positive," Kepler Capital Markets analyst Jon Cox said.

Swatch's shares opened higher and were about 1.4 percent up by 5:13 a.m. EST.

China's appetite for expensive timepieces has helped the luxury watch industry to recover quickly from its worst slump in decades.

Swatch said the appreciation in the Swiss franc shaved off 3 percentage points on sales growth.

Bernstein analyst Luca Solca said the Swiss franc impact was anticipated.

"I don't believe it should be a surprise for the market. Another strong update after Tiffany, Richemont, and Burberry," Solca said, adding that the 2011 outlook was very encouraging.

(Editing by Jane Merriman)

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