Nayla Hayek, the Chair of the Board of Directors of the Swatch Group, recently addressed the 2013 General Assembly of the group’s hareholders in Biel, Switzerland. During the address, Hayek spoke about the rebound of the Swiss watch industry.
Last year, the Swatch Group posted gross sales of CHF$8,143,000,000 (approximately US$8,538,326,364), a billion francs more than the previous year. But when the Swatch Group was born in 1983, the Swiss watch industry was in serious decline. “In the early 1980s, the Swiss watchmaking industry was practically bankrupt,” Hayek told the General Assembly. “In this situation, something had to be done. At the time, ETA had in its files an idea for a technical feat. The watch barons of the day showed little enthusiasm for such a low-prestige project. But it was nonetheless potentially able to generate business. So the decision was taken to give this “thing” a try. But in typically Swiss fashion, the idea was to take things slowly and cautiously. In Switzerland, you don’t just forge full speed ahead. Not even if you are at death’s door. First, you test it to see if it will really work. A few watches were made to see how they’d sell through an American distribution partner in Texas. An ad campaign was prepared for an inexpensive, colored plastic watch with the Swiss Made label: Swatch. The result? A flop!”
Despite losses of over CHF$156,000,000 as a result of this failed project, the company that would subsequently become Swatch Group continued on. After relaunching the Swatch in Switzerland, then Germany and England, the company had a hit on their hands. “The company that was the best embodiment of the Swiss watch industry had recaptured the success that had eluded it for so long,” Hayek said. “By virtue of the commitment shown by all members of his staff, along with innovation, ideas and dreams, a lot of emotion, and a huge amount of hard work, it pulled itself up to where it is today. In 2012 it reached an operating margin of more than 25%, with an equity-capital ratio of more than 83%, nearly 30,000 employees, more than half in Switzerland; and today it has the financial strength to make important acquisitions such as the exclusive jewelry and watch brand Harry Winston in early 2013.”
Indeed, the group’s brands, which include Breguet, Blancpain, Glashütte Original, Jaquet Droz, Omega, Longines and Union Glashütte, are thriving. With demand for luxury timepieces growing, the Swatch Group has also led the industry in securing a growing production capacity. “We have continued to fight for the truly important Swiss Made by making such decisions concerning the manufacture of our products as seemed to us essential and beneficial in the long run,” Hayek concluded. “The various acquisitions, decisions, and strategic advances – all of which strengthen Swiss industry, which create real products and real value – allow us to present this General Meeting of Shareholders with particularly outstanding results today.”
Nayla Hayek, third from left, is pictured with Ingmar De Vos, HRH Princess Haya, and Juan-Carlos Capelli. Photo by Sandro Campardo/Getty Images for FEI.