High-end brands will be searching for alternative suppliers now that Swatch Group has decided to lower the watch part supplies to rival watchmakers. For decades Swatch has served as one of the main suppliers, providing as much as 80% of Swiss movements and their Nivarox arm, which dominated the market for oscillating parts and escapement (the heart of a watch’s mechanism).
Many of the brands at the Geneva watch fair said they are confident they would survive the groups decision, while others implied there would be tough times ahead. Some of the small exclusive brands will have no problem finding alternative suppliers because of the small quantities and high retail prices, others would have to make large investments and hire more employees to compensate for the shortage of parts.
High-end watchmaker Girard-Perregaux is having to turn away watchmakers who want to buy its in-house movements. The brand only makes about 10,000 watches per year and supplies movements to PPR’s Boucheron and Bottega Veneta, and like most everybody else, gets their escapements from Nivarox.
Chief Executive Nick Hayek of Swatch Group has made it clear that he no longer desires to have to furnish movements and parts to everybody and wants to be able to choose his clients.