Swatch Group buoyed by upbeat demand in February

BIEL, Switzerland (Reuters) - Swatch Group (UHR.VX), the world's largest watchmaker, enjoyed double-digit sales growth in February, continuing the strong trend seen the month before, the Swiss-based company said on Thursday.

"We've seen double-digit sales growth in January and February," Chief Executive Nick Hayek told reporters on Thursday, a month after the release of full-year results from the group whose products range from cheap and colorful Swatch watches to high-end Omega and Breguet timepieces.

"All segments see extraordinary demand and all markets, with the exception of Greece and Japan, are growing," Hayek said at the group's annual results media conference. "Stock levels are very low at the moment."

Hayek has already set a medium-term target for the company to achieve annual sales of 10 billion Swiss francs ($10.7 billion) and said he expected to reach this within three years without acquisitions. In the past year the group notched up sales of 6.44 billion francs.

Consolidation in the industry is picking up as the world's largest luxury goods group LVMH (LVMH.PA) continues its shopping tour, snapping up Italian jeweller Bulgari BULG.MI for 3.7 billion euros after building up a stake in Hermes (HRMS.PA).

Asked if Swatch had considered a bid for Bulgari, Hayek said: "Looking at Bulgari was never on our agenda. We would not spend so much money. If we made an acquisition, we would finance it with our cash and not through a bank loan."

The Bulgari acquisition will bolster LVMH's watch and jewelry portfolio, making it an even more serious competitor for Swatch and Richemont (CFR.VX), owner of prestigious jewelry brand Cartier.

Both Swiss groups have sufficient firepower to go for buys. Swatch had cash of 1.8 billion Swiss francs at the end of 2010 while Richemont had 2.2 billion euros ($3.1 billion).

The big challenge in 2011 will be to satisfy the high demand for all its products, Hayek said. Swatch Group will invest between 200 million francs and 250 million this year to extend its production capacity, he said.

Last week, Hayek said in a newspaper interview the group was aiming for record sales of more than 7 billion francs in 2011.

Swatch shares were down 1.1 percent at 1212 GMT, lagging a 0.4 percent weaker STOXX Europe 600 personal and household goods index .SXQP.

(Editing by Dan Lalor and David Holmes)