Hayek Sr. to step down as Swatch Group CEO

Nicolas G. Hayek Sr., 73, chief executive officer and chairman of the Swatch Group, the world’s largest watchmaker, will step down as CEO, following approval by Swatch’s board of directors, “in the coming months,” he says. Hayek, whose marketing and business expertise is widely credited with reviving the Swiss watch industry in the early 1980s and has led the Group into luxury watches and jewelry, will remain as chairman.

Succeeding him as CEO of the conglomerate, which owns 18 major watch brands in the mass-market, mid-price and luxury categories, will be his son Nicholas (“Nick”) G. Hayek Jr., 47, as reported by JCK Online in September 2001. Hayek Jr. is currently chief executive officer of Swatch Ltd. and a member of The Swatch Group board.

Hayek Sr. made the announcement May 7 at the annual press conference on the Group’s’ financial results in Biel, Switzerland. He said he has been transferring his responsibilities to his son for over a year. “He now has taken over 70% of the duties as CEO,” Hayek told reporters.

In March, the Swatch Group reported net income for 2001 of about $329 million (504 million Swiss francs), 7.7% below 2000, largely due to the sluggish global economy and the impact of Sept. 11’s terrorist attacks on business. However, at the May 7 meeting, Hayek said there has been a significant increase in orders in 2002’s first quarter, especially for its luxury brands, where the company has put increased emphasis. After a weak start this year, sales rose in March, and April was “better than it was last year,” said Hayek.

Nicholas G. Hayek Sr. is one of the powerful “movers and shakers” in the global watch business and one of the most influential businessmen in Europe. His personal fortune is estimated in published reports at about $2.4 billion, making him one of the world’s wealthiest people.

Hayek Sr. has led what is now called The Swatch Group since its formation in 1983. Then known as SMH (or the Swiss Corporation for Microelectronics and Watchmaking Industries Ltd.), it was created by a merger of what were then the two largest Swiss watch manufacturers, ASUAG and SSIH. Both had been seriously weakened by the impact on Swiss watchmaking of the industry-changing quartz watch revolution launched by Japanese watchmakers in the 1970s.

The new group, under Hayek, implemented new production and marketing techniques, including automation, which revitalized Swiss watchmaking. Among its unique products was the Swatch watch, the innovative, low-cost plastic fashion watch, which debuted about the same time and became a worldwide success. In 1998, the group changed its name to The Swatch Group to reflect the continuing success and importance of the brand.

The Swatch Group, headquartered in Biel, Switzerland, today is the world’s largest manufacturer of finished watches. It has about one-fourth of the world’s watch sales and produces some 120 million watches, movements, and stepping motors. It has some 50 production centers in Switzerland, France, Germany, Italy, the U.S. Virgin Islands, Thailand, Malaysia, and China.

Its watch brands include Blancpain, Breguet, Glashûtte Original and Jacquet-Droz (luxury); Omega, Rado, Longines and Union Glasshûtte (prestige, upscale); Tissot, Certina, Mido, Pierre Balmain, Leon Hatot, Hamilton, and Calvin Klein (mid-price); Swatch (in the mass-market segment), Flik Flak (for children), and Endura (private label watches).

Capitalizing on the brand names, the Group in 2001 opened three more Breguet stores in Cannes, New York, and Vienna; two boutiques for Blancpain and Omega in Cannes and Paris; a Glashütte sales outlet in Frankfurt; and its first multi-brand top-range store in Paris under the name Tourbillon.

It has also launched jewelry lines under the Breguet, Swatch, Leon Hatot, and Omega names.