European luxury goods shares fall, Swatch hits 6-1/2-year low

LONDON, July 15 (Reuters) - European luxury goods firms fell sharply on Friday, with Swatch slumping 13 percent to its lowest in 6-1/2 years after the world's biggest watchmaker warned its first-half profit would drop by 50-60 percent.

Shares (Berlin: DI6.BE - news) in Swatch touched their lowest level since late 2009 after the company said it expected sales to fall about 12 percent in the first half, due to dwindling sales in Hong Kong and Europe.

"Let us remain at the sidelines for Swatch Group and the Swiss luxury goods sector," Baader Helvea analysts said in a note.

Swiss watchmakers are grappling with weak demand as fewer Chinese tourists shop for timepieces in Hong Kong and Europe and as a strong Swiss franc pushes up the production cost for "Swiss made" watches.

Shares in other luxury goods companies fell, with Richemont down 3.3 percent and LVMH falling 2.5 percent.

(Reporting by Atul Prakash; Editing by Sudip Kar-Gupta)