This boost is essential, says Hayek, who acknowledges facing financial hurdles like many others. “We are expanding globally except in China. However, discussions on financial challenges often overlook our independence. Unlike many luxury groups, our balance sheet shows about 86% equity with no debt or goodwill linked to our brands. Our profits might be lower, but that’s because we maintain operations, retain our workforce, and manufacture solely in Switzerland. This choice costs us hundreds of millions annually due to the strong Swiss Franc affecting turnover and profits.”
As the Hayek family holds 39% of Swatch Group shares and with Hayek being part of the founding family, he draws inspiration from his father’s dedication to Swiss manufacturing. Swatch Group operates 150 factories and trains over 500 apprentices each year, supplying Swiss watch brands both within and outside the group. This interconnectedness means the group’s performance mirrors the broader industry’s struggles. “Despite some financial market pressures to focus solely on luxury, relocate production, or prioritize profits above all, we adhere to our long-term strategy,” he states. “This sometimes makes us appear unconventional in the stock market. But my father always believed in selling watches, not shares.”
The current focus is precisely that. Hayek intends to continue launching quality products that foster consumer loyalty and boost revenue. “Mistakes are part of entrepreneurship, and sometimes things could have been better,” Hayek explains. “Trying new things involves risks, but these should not prompt a change in strategy or group attitude.”
Reflecting on the Royal Pop launch, Hayek insists he would not change his approach. “Among 220 stores, only 20 to 30 encountered issues, mostly unrelated to organizational mistakes,” he notes. While some online critics suggested an online reservation system to manage crowds, Hayek counters that such a system likely would have failed given the 25 billion social impressions. “In theory, it’s appealing, but practically, it’s unfeasible. Still, we’re contemplating future collaboration launches and innovative methods. Something exciting, potentially challenging for resellers, may be on the horizon.”
In light of the Royal Pop’s success and industry-wide challenges, more Swatch collaborations are anticipated. “Collaborations often start with instinct and are followed by rationale,” he observes. “The Moonswatch, four years on, continues to thrive. Royal Pop was an unexpected hit, so we have more projects planned. A particularly provocative initiative is set for July 16, highlighting the speculative nature of today’s world.”
