In conversation with Nick Hayek, CEO Swatch Group

Nick Hayek, CEO Swatch Group

Nick Hayek is conducting the biggest Swiss horological orchestra with 29.600 employees and a turnover in 2013 of 8.143 billion Swiss Francs. I invite you to listen to our conversation taped yesterday at the Swatch Group HQ.

I have been to the Swatch Group headquarters in Biel in Switzerland yesterday. Now back in the office I just uploaded my conversation with Nick Hayek for you. I have to tell you it was a long conversation. It´s 45 minutes of real inside talk about the Swatch Group and the Swiss Watch Industry and we could have talked even longer.

The 45 exclusive minutes I am offering you are thrilling.

Nick Hayek gives some real insides, talks about new developments in and investments of the Swatch group, he gives some insides about the Swatch “Sistem 51”, he makes a world first announcement for a future development for Swatch, he describes the developments in and the importance of the so called entry and mid price ranges, he gives an interesting outlook for Omega and he analyzes the wellbeing of the Swiss Watch Industry. And he jokes around with me, showing me again that he has a real good sense for humor and that he is everything else then a bore. Also the pictures I took yesterday do proof this 🙂

It´s not simple to meet Nick Hayek and occasions like this are quite rare, since the CEO is always very busy. I know Nick Hayek for many years now. We first met when he first started to work for Swatch (not to be mistaken with Swatch Group) and became the Swatch CEO.

Today Nick Hayek 
is the President of the Executive Group Management Board and member of the Board of Directors of the Swatch Group. Together with his sister Nayla Hayek, she is the Chairwoman of the Board of Directors of the Swatch Group, and his nephew Marc Alexander Hayek, he is member of the Executive Group Management Board of the Swatch Group, the Hayek´s carry foreward the heritage of Nicolas G. Hayek, the founder and former Chairman and Delegate of the Board of Directors of the Swatch Group.

Let me first give you some facts and figures about the Swatch Group:

 

The Swatch Group in the year 2012:

  • 29,600 Employees (+1500 compared to 2011)
  • 20 Watch Brands
  • Some160 production plants (in Switzerland)
  • 35 countries with a Swatch Group Organization
  • 156 Companies worldwide
  • 8.143 billion Swiss Francs Sales

These watch and jewelry brands belong to the Swatch Group

 

Watch and jewelry brands belonging to Swatch Group

Interesting and impressing, isn’t it?

 

I do now invite you to listen to my conversation with Nick Hayek, taped yesterday in Biel at the Swatch Group headquarters. Take some time, sit down, relax and enjoy!

 

 

 

Nick Hayek in his office yesterday …

Nick Hayek, CEO Swatch Group
Nick Hayek, CEO Swatch Group

 

These were the two watches Nick Hayek was wearing yesterday: Omega and Swatch

Nick_Hayek_CEO Swatch Group_3

Omega Seamaster

Nick_Hayek_CEO Swatch Group_5

Swatch Sistem 51, the brand new, revolutionary, automatic Swatch that will come to the markets end of the year

Nick_Hayek_CEO Swatch Group_4

 

In Nick Hayek´s office…

Nick Hayek “shouting” at me. And please look what´s written on my T-shirt … 🙂

Alexander Linz and Nick Hayek
Alexander Linz and Nick Hayek

 

Look exactly what you see behind Nick Hayek´s head. It´s a Santa Claus´ hat. So if people sit at the table exactly under the drawn hat, they will always look a bit funny. Nick Hayek has a lot of charisma, but he also always good for a joke.

Nick_Hayek_CEO Swatch Group_0

Yes, we can!!!!

Santa Claus hat

 

Pictures taken in the corridor just in front of Nick Hayek´s office…

Nick Hayek when he was young and working for the brand Swatch

Nick Hayek, CEO Swatch Group
Nick Hayek, CEO Swatch Group

Nick Hayek in a ski bob smoking a cigar …

Nick Hayek, CEO Swatch Group
Nick Hayek, CEO Swatch Group

A young Nick Hayek at the Olympic Games

Nick Hayek, CEO Swatch Group
Nick Hayek, CEO Swatch Group

Nick Hayek and George Clooney

Nick Hayek and George Clooney
Nick Hayek and George Clooney

A warning just in front of Nick Hayek´s office

Swatch Group

 

Nick Hayek, thank you once again for your time and the inspiring conversation!

Nick Hayek, CEO Swatch Group
Nick Hayek, CEO Swatch Group

 

And for those of you now being interested in even more details let me offer you this additional information:

 

The Swatch Group today

 The Swatch Group Ltd. is the number one manufacturer of finished watches in the world. The Group is active in the manufacture of finished watches, jewelry, and watch movements and components. It produces nearly all of the components necessary to manufacture the watches sold under its 19 watch brands and the multi-brand Tourbillon retail label, as well as the entire Swiss watchmaking industry. In addition, it operates its own worldwide network of distribution organizations. The Swatch Group is also a key player in the electronic systems sector.

The Swatch Group takes its name from the extraordinarily successful story of Swatch, one of the world’s most widely recognized consumer brand names. Less than 30 years ago, the Swiss watchmaking industry was battling a serious crisis. The first Swatch watches were released in 1983. The years since then have seen the recovery of the Swiss watchmaking industry as a whole, and the establishment of The Swatch Group as a strong, diversified industrial holding. This solid foundation has allowed the Group to broaden its reach and extend its range of brands. Today, the Swatch Group offers watches in all price categories, and Swatch Group monobrands and the multibrand Tourbillon retail mark hold leadership positions in all market segments:

• Breguet, Harry Winston, Blancpain, Glashütte-Original, Léon Hatot, Jaquet-Droz, Omega and Tiffany & Co. in the Prestige and Luxury range;

• Longines, Rado and Union Glashütte in the high range

• Tissot, ck Calvin Klein, Certina, Mido, Hamilton and Balmain in the middle range

• Swatch, Flik Flak and Endura (private label) in the basic range segment

• Tourbillon, the retail mark under which all selected Swatch Group watch and jewelry brands of the Prestige and Luxury range, as well as Swatch products are offered in a unique and exclusive multi- brand environment.

• Hour Passion, the retail boutique that offers all Swatch Group brands of the high and middle ranges down to the basic segment in a distinctive, high-class multi-brand environment

Today, the Swatch Group and its brands continue to invest heavily in research and development, driving the steady expansion of their leading position in materials and process technologies and in product design and manufacturing. In particular, the Swatch Group engages in significant development activities in microelectronics and micromechanics. The Group is also active in the field of service sectors. Sports timing and measurement technologies, although not a core business, play a key role in terms of brand and Group visibility. A strong number of Swatch Group companies serve as official timekeepers at a variety of international sports events, including the Olympic Games.

 

The Swatch Group yesterday

Under the leadership of Nicolas G. Hayek, the Swatch Group achieved worldwide renown as the crown jewel of the watchmaking industry. In the early 1980s, Mr. Hayek led the firm’s recovery from a severe crisis. His decisive leadership was critical to the launch of the Swatch watch in 1983 and subsequently drove the continuous development and improvement of all Swatch Group brands. His innovative strategies also served as important models for the Swiss watchmaking industry as a whole and played a key role in the revival of the industry. The achievements of N.G. Hayek have been widely recognized in Switzerlandand beyond, resulting in a number of notable awards, including that of Doctor honoris causa, awarded by the Universities of Neuchâtel and Bologna in 1998. In 2003, he was named Officier de la Légion d’Honneur de France. Nicolas G. Hayek was Chairman and Delegate of the Board of Directors of The Swatch Group Ltd from 1986 to 2010.

In 1998, SMH (Swiss Corporation for Microelectronics and Watchmaking Industries Ltd.), founded by Nicolas G. Hayek in 1983 through the merger Swiss watchmakers ASUAG and SSIH, was renamed The Swatch Group. At the time, both SSIH and ASUAG held a number of well- established Swiss watch brands. ASUAG had been founded in 1931, SSIH a year earlier through the amalgamation of Omega and Tissot. SSIH’s principal objective was to market quality Swiss watches. By taking over companies that produced high-quality movements and a number of lower-end watch brands, SSIH gradually managed to establish a strong position as a Swiss watch manufacturer. ASUAG’s mandate was to maintain, improve and develop the Swiss watch industry. ASUAG also expanded gradually through the purchase of companies that made movement-blanks and a number of finished watch manufacturers that were subsequently brought together under the subsidiary GWC General Watch Co. Ltd.

In the 1930s, both ASUAG and SSIH sought to combat the severe economic crisis and ensuing unemployment by means of complementary research and development programs in their respective companies. It proved difficult for both, however, to implement a common industrial policy for the subsidiaries concerned. Following repeated crises in the Swiss watch industry, by the 1970s both ASUAG and SSIH were once again in trouble. Foreign competition, in particular the Japanese watch industry, with its mass production of cheap new electronic products and new technology, was rapidly establishing a strong foothold in the market. Eventually, both ASUAG and SSIH faced liquidation, and foreign competitors were offering to buy prestigious brands such as Omega, Longines, Tissot, and others.

At this point, Nicolas G. Hayek, at the time Chief Executive Officer of Hayek Engineering, received an assignment to develop a strategy for the future of both companies. In 1983, the soon to be renowned Hayek Study recommended a number of measures designed to enable the survival and ultimate recovery of the companies. Critical steps included the merger of ASUAG and SSIH into SMH and the launching of a low- cost, high-tech, artistic and emotional «second watch» – the Swatch. The subsequent implementation of the measures recommended by the Hayek Study, together with the take-over of the majority of shares by the Hayek Pool and the nomination of Nicolas G. Hayek as CEO, successfully created new opportunities and established a new culture. Within five years, the SMH Group was to become the most valuable watchmaker in the world.

 

The Swatch Group tomorrow

In the years ahead, the core business of the world’s largest manufacturer of finished watches will clearly remain in the watch industry. Swatch Group companies are constantly adding innovative new watches to the brand product lines, inspired by the grand traditions of Swiss quality and craftsmanship and made possible by the enormous resources the Group brings to bear through its technology research and development teams.

The successful introduction of jewelry products by selected brands has established a basis for a growing presence in this sector. A range of Group companies supply movements and components not only to Swatch Group brands, but to the entire Swiss watch industry and to selected watchmakers outside Switzerland.

The Swatch Group also continues to develop high-tech components for the computer, telecommunications, medical applications, automotive and electronics industries. Swatch has taken advantage of the Group’s vast experience, know-how and production capacities in micromechanics and microelectronics to develop its activities in the sector of the mechanical watch (Sistem51) but is also active in the telecommunications and internet sectors, where Swatch Access (wireless access control, internet access, e-commerce) is but one example of the brand’s remarkable ability to transform advanced technology into successful products.

At the top end of the market, The Swatch Group will further reinforce its presence in the Prestige and Luxury segment with a growing number of mono-brand outlets for Breguet, Blancpain, Glashütte Original, Jaquet Droz, Léon Hatot, Omega, Longines, Rado and Swatch. The multi-brand boutiques under the high-end «Tourbillon» label and the “Hour Passion” boutiques are proving increasingly successful. The Tourbillon brand boutiques offer all Swatch Group luxury brands products – watches and jewelry collections; the Hour Passion stores carry the products from the high, middle and basic ranges – highlighting each brand’s appeal in specially designed environments.

 

 

 

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37 Comments

  • Good day our family associate! I need to declare that this article is wonderful, wonderful published and come using the majority of essential infos. Let me fellow more posts like that .

  • Loved this interview! Sorry I didn’t comment sooner. I’ve had it bookmarked since you released it. Really enjoyed it! Keep up the excellent content. Best, Chris

  • Thanks for the interview. I’m a tech guy blogging gadgets at ARMdevicesz.net and I was lisrening through this interview wondering if the ARM Powered smart electronic watch segment woulkd be mentionned by the Swatch CEO. I guess not yet? When is it going to be released? We need Swatch to use Pixel Qi LC, E Ink, Bluetooth4, run sub-Android on the wris, wireless charging, vibrate function, speaker sound alert, so many features Swatch group needs to master, announce (marketing) and release, not leave it to Korean, American, Chinese or Hapanese to take the future of the wrist watch market!

    • I just posted my unboxing/review video of Sistem51 here: http://armdevices.net/2013/12/19/swatch-sistem51-review-automatic-mechanical-swiss-watch-for-the-mass-market/

      As a Swiss I want to video-blog the Swiss watch industry in the months to come, and I really hope Swatch is preparing E Ink, LCD (Pixel Qi if possible), Bluetooth 4, vibrator, speaker/microphone and etc, so many other new features that I hope Swatch has their teams of R&D people working on for 2014 release. It would be sad to let Apple, Samsung, Google etc dictate how Smart Watches are going to be for the world. Swatch must mean Smart Watch, or make them SSwatch, Smart Swiss Watch.

  • Many thanks for this great interview, this tape should be played in business schools. Industrial thinking across the entire value chain versus marketing “something”….
    I agree that it is somehow strange that one competitor is obliged to supply his other competitors who can save on R&D and spend the difference on marketing and/or bonuses.

    It was not mentioned in the discussion that Rolex has invested heavily in production over the last years (e.g. the new factory in Biel) and is building up Tudor. They will have to react in one way or the other to the antimagnetic Omegas and will need their own movements to put into all the +250.000 Tudors they are wanting to sell. We can expect news from them and this will be an interesting match of two industrialists.

    By the way, I am fpr sure going to buy a Swatch 51 !

    • Rainer, thank you very much for your positive feedback! For more information what Tudor plans to do please read (in case you have not done it already) my post and all the comments about Rolex`little sister…

  • Most interesting, I felt listening to Hayek Jnr that he is maturing – his comments sound.
    After the tragic death of his father, the ‘jury’ was out on his ability to run the group.

    I was waiting patiently to hear his comments on COMCO and SWATCH groups desire to reduce sales to outside companies.
    Something I entirely agree WILL BE beneficial to the SWISS watch industry (in time)
    BUT – I also agree here:
    http://www.watchtime.com/wristwatch-industry-news/fast-comco-halts-swatch-group-escapement-cuts/

    Finally the discussion on ‘anti-magnetic’ was excellent
    Thanks for sharing this with us
    PS: I have visited Omega’s excellent Museum, and discuss HOROLOGY with its Curator.
    I own among other early pieces a 1908 OMEGA Left Hand Side Crown watch.
    Once again
    thanks
    Adam

    • Adam, I will for personal reasons NOT enter the also ongoing very political discussion about the new COMCO´s decision. Let me just add this: I have been educated by the Jesuits (high school) to think and act liberal and to be tolerant and at university (business administration) I learned how to behave in an economic-liberal way. So what shall I comment here? 🙂

      • Thanks – fully understand.
        My concern is of course I agree that it was time to make other manufacturers – manufacture. That can be only good for the industry and Horology.
        I am just concerned that this decision does not ‘shoot the Swiss in their own foot’
        By allowing competitor (countries) to grow stronger with the help of tier 2 and 3 Swiss manufacturers who will have to look and turn to alternative sources.
        Regards
        adam
        Guest Wristwatch Curator NAWCC Museum – Pennsylvania

        • Adam, there are still TOO MANY opportunists out there. Small ones and big ones… and Swatch Group is still seen as a supermarket. How can even big groups have been so “blind” and not invest in their own future. Did those managers just want to increase their bonuses by making more profit and not invest in a healthy future

          Questions, questions …

          • no exactly, they rely on heavy marketing and therefore sell the facade (what you see); besides they consider there are enough non informed customers to make such business model flower.
            What they forget is that internet is going towards an all information platform, where such blogs as yours and from many others enthusiast put the information at the tip of the fingers. Old day marketing, even if expensive, therefore bursts and flops with increased frequency.

          • Oh. I am not talking quick buck opportunists
            But established great manufacturers like Dubey and Schaldenbrand
            Look the history in Horology of Mme Cinette Robert.

            It is correct – these great brands with provenance and heritage should have their supply’s off?

            No I think not, they were are great SWISS companies – small but great.

            Adam

  • Wonderful interview, he is on point with everything, except in the US. Sadly he has no idea what is going on in his own shop in America. Double digit growth, yet 2-3% increases among watchmakers. Retention of NGH trained watchmakers is minimal and most have jumped ship due to poor management. The after sales service is essential, yet highly over looked here.

  • I cannot say enough good things about this article and interview. Very well done and insightful.

  • great interview!
    but in all of your, or even other interviews, he never speaks about the german brands of the swatch-group, like glashuette original or union.
    i would love to know how he personally sees them.

  • Once again well done! Very interesting insights of the thinking of Mr Hayek. I really like his comments about the other or some manufacturer how only buy from him then fine tune and sell it. When this will stop we do not know but hope sooner then later. But we have to be fair only the Swatch Group could come out with the system 51 no one has R&D and finances like them. Hope only it will wake up some other brands to be more inovative.

  • I love Swatch! (& Jaquet Droz)How about a repeater along with the Chronographe. I heard birds in the background. Ha! Great interview Linz!

  • By the way, Alexander,
    considering how enthusiastic you are about “anti-magnetic drive”; if you would be buying a Planet Ocean watch, would you postpone or would you buy as it is now? (with only the spring in Si)

    • Nick, it depends if you still can wait or not. When you can, you should wait for the amagnetic version. It will be a total new generation of watch and movement …

      • and how looong do you think I’ll have to wait till the miracle lands in the Planet Ocean? (Chronometer, three hand version)
        Mr.Hayek is talking about 5 years!!!

  • One could almost take this interview as a sequel to the list “10ten brands with in-house movements”.

    Looking at the list the consumer sooner or later (I admit some buy the watch just to show off) ask himself what he gets for the money.

    Cartier, Breitling, Chopard do have an in-house movement, that is however limited to just a line of their watches. The mentioned movements are good, but certainly not on the Omega level. In retail they cost more than Omega.
    Omega is higher in finish and elegance. (at least in my opinion).
    Some will mention L.U.C from Chopard, however it’s necessary to add, that Chopard sells those movements as jewellery (gold cases), something I would not buy foe every day use and wear.

    Looking at the list Omega goes way beyond any competitor in “the what you get for your money” check. Also in finish, elegance and choice of design Omega tops the list.

    What Omega seriously lacks are elegant dress watches.
    DeVille has such bleak dials; the Hour-Vision decoration looks good on a photo and much less on the wrist. Many customers don’t like the form of the case.

    Constellation (as a AP – Royal Oak design contender) is something for Asian markets; a bracelet with a watch.
    Instead of making a design or two, only a new case is needed (the movement is available), Omega is recently putting out strange watches like X-33 and Bullhead. Target public unknown.
    The Constellation 1952 is made only in Sedna gold, the strap lugs are missing (Omega DeVille was only limited Basel 2004; it had the same beautiful design with very nice straps).

    So, for those who are not into Seamaster range, there is little choice.

    Other Swatch brands have even stranger lineups.
    The new Blancpain Bathyscape looks cheap and certainly not “sexy” if we use Mr.Hayek’s words. The Fifthy Fathoms is an “oldmobile”. The rest of the catalogue is Breguet like (watches that are the dream of every museum curator).

    • Nick, I see the things a bit different then you do. For me t h e Omega watch is the Speedmaster. I collect Speedmaster since almost 30 years. I also like the X33, I own the “old” version. The Bullhead was sold out very quickly, an international collectors community buys such watches.

      The “Fifty”, as I call it is CULT and not an Oldtimer, the new one looks good on the wrist you should have a closer look and what Breguet does is just outstanding – sorry! If you don’t like that more conservative style, wait what you will see next year concerning the Type XX.

      Tastes are so different and it is impossible to create a kind of universe style everyone likes … 🙂

      • uhmm, well, uff, I like three hand watches, so Speedmaster is too cluttered for my tastes. Type XX is not a three hand watch, so it’s out od the list.

        As far as the style goes, I suppose I’m as classical as a Roman ruin, therefore I would not put a Speedmaster, X-33 or Bullhead on my wrist even if I got paid for it.
        Actually, I would quickly take a Casio from the first shop window in sight.

        I tried the Blancpain Bathyscape looks cheap on the wrist; and it was only my opinion. Three other potential customers decided not to buy it for the same reason; the old Fifthy Fathoms looks way better than this new sub-species version.

        My favorite dress watches as design goes:
        http://www.audemarspiguet.com/en/watch-collection/jules-audemars/jules-audemars-selfwinding/15120BC.OO.A002CR.03
        (no steeel version, only jewellery-gold edition)

        http://www.glashuette-original.com/collection/the-4-pillars/detail/senator-perpetual-calendar/

        my favorite sporty watch is Omega Planet Ocean Chronometer; on a strap.

        • Nick, a good choice the AP and the GO … I would go for the GO Senator Perpetual Calendar. This is a real fantastic watch. Looks good and it´s 100 % in-house… One of the finest Saxon caliber you can get …

          • What I wanted to point out is that Omega lacks such dress watches in the lineup, if the brand wants to be in the true “Prestige Segment”.

            Well, I prefer the Omega Planet ocean.
            AP is only in gold and I’m not into buying a piece of jewellery.
            G. O. is nice and available in steel.However, the calendar complication is not for every day use of the watch, since it’s not as robust as a “plain” movement as service goes.

            Omega has the Si spring, a robust movement. The ultimate thing would be that non magnetic drive; however I have no idea when it comes to PO.

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