The Swatch Group in June celebrated production of its 333 millionth Swatch Watch, its namesake industry-changing watch introduced in 1983. The milestone was marked at “Splashtival,” a public festival in Lugano, Switzerland, where a new Swatch Watch collection (Jelly in Jelly) was unveiled. (A limited edition of 3,333 watches, with a design created by the Blue Man Group, will also be produced.)
Presiding over the celebration was Nicholas G. Hayek, 78, chairman of the board and co-founder of the Swatch Group. At its current rate of production and sales, Swatch Watch should pass the 1 billion mark by 2033, said Hayek in an interview with the Swiss financial publication Finanz und Wirtschaft.
The Group, which produces 18 brands as well as watch movements and some electrical equipment, expects its total annual sales to grow 150 percent by fiscal year 2008. Its 2005 sales rose 8.3 percent and tallied 4.5 billion Swiss francs ($3.7 billion) in 2005. Hayek predicted that should reach almost 7 billion Swiss francs (about $5.7 billion) by 2008.
The watch for which it’s named debuted in 1983. It was an innovative response to heavy competition from inexpensive Asian watches with quartz movements, which had revolutionized watchmaking in the 1970s and seriously weakened the Swiss industry, based on mechanical watches.
Swatch Watch came from Switzerland’s two largest (but financially struggling) watchmakers—SSIH and ASUAG—which merged in 1983 as ASUAG-SSIH, with Hayek at the head.
The new watch was designed to be a casual, disposable, inexpensive (under $50), fashionable accessory, with new lines and designs coming out quarterly. It was plastic-cased, with an improved quartz module produced with innovative automation and fewer parts (cutting production costs 80 percent).
The combination of affordability, design, aggressive marketing, and innovative production made Swatch Watch a worldwide success almost immediately. That led to Swatch Stores, Swatch collectors clubs, and official timekeeping at several Olympic Games and Ski and Snowboard World Cup competitions. Swatch watches featured designs by noted artists, and were produced in a wide variety of styles, including metal-cased (Irony), diver (Scuba), flat chronographs (Skin), an Internet- connected watch able to download data (Paparazzi), and one with Swatch’s revolutionary Internet time concept (Beat).
Swatch Watch’s success helped revive the Swiss watch industry, while providing a solid financial base for ASUAG-SSIH, renamed SMH (1986) and then Swatch Group (1998). The Group started new brands and acquired others in popular to luxury categories. (In the United States, Swatch watches are no longer sold in jewelry stores, but through its 44 Swatch stores, plus a few select small retailers, and at www.swatch.com.)
Although worldwide sales of Swatch Watch have weakened, the Swatch Group it built is now the world’s largest watchmaker. “We’re No. 1 in the watch industry, and we will remain so,” declared Hayek in Lugano.