If The Royal Pop Follows The Labubu Playbook, Swatch Is A Strong Buy

I rate the Swatch Group a STRONG BUY, behind the transformative potential of its AP x Swatch 'Royal Pop' collaboration, which may open a new product category altogether. SWGAY already boasts luxury-level gross margins (82%+), but unlocking idle production capacity via new product categories is key to the market rerating as a luxury house. The Royal Pop targets an underserved female demographic and could create a new 'fashion watch' category. I see strong parallels to Pop Mart's Labubu success.