The Fabulous Story of the Swatch Group

The story of the Swatch Group begins in 1983 with the merger of two major Swiss watchmaking groups: ASUAG and SSIH. The group was then named Société de microélectronique et d’horlogerie (SMH) before adopting the more appealing name Swatch Group in 1998.

In the early 1980s, the SMH and SSIH groups were on the brink of financial collapse, hit in particular by the fierce competition from the Japanese watch industry and its low-priced products.

• ASUAG (Société générale de l’industrie horlogère suisse SA), a company founded in 1931, owned the brands Longines, Rado, Certina, Hamilton, etc.
• SSIH (Société suisse pour l’industrie horlogère), founded in 1930, owned Omega and Tissot.

Nicolas George Hayek, chairman of Hayek Engineering, an international strategy consulting firm, is brought in to save the two companies. His firm then produces the now-famous Hayek report, which recommends two key strategies.

• The first is to merge SMH and SSIH, thus creating the SMH group.
• The second proposed measure is the creation of a “second watch” sold at an unbeatable price, well made, featuring an unprecedented design and manufactured in Switzerland. The Swatch concept was born. The Swatch watch broke with watchmaking conventions by using only 30 watch components versus the usual 100. This nuance made it possible to cut production costs by nearly 80%. Designed not to be repaired, the case is ultrasonically welded: only the battery can be replaced.

Nicolas Hayek, buoyed by the success of his proposals, takes the helm of the SMH group.

In 1983, he spearheads the launch of the Swatch watch and gives the company fresh momentum through constant improvement of its brands and products. This rise in product quality would ultimately pull the entire watch industry in its wake. The SMH group becomes a model to follow.

In 1998, the SMH group is renamed The Swatch Group, in tribute to the watch that saved the watch industry.

The Swatch Group, based in Biel, Switzerland, is today publicly listed and accounts for 25% of global sales, making this watchmaking behemoth the world’s number-one producer of watches (manufacturing, jewellery, watch movements and watchmaking components), with a portfolio of 19 watch brands spanning every price segment.

• Luxury with Breguet, Blancpain, Glashütte-Original, Jaquet Droz, Léon Hatot, Omega and Tiffany & Co.
• Upper-end with Longines, Rado and Union Glashütte
• Mid-range with Tissot, ck Calvin Klein, Certina, Mido, Hamilton and Balmain
• Entry-level with Swatch and Flik Flak
• Custom watches (watches made for companies) with the Endura brand.

The group also owns a network of boutiques called Tourbillon, offering the most prestigious Swatch Group brands in 20 cities around the world (Crans-Montana, Geneva, Lausanne, Lugano, Montreux, St. Moritz, Amsterdam, Baden-Baden, Beijing Grand Hyatt, Beijing Park Life, Beverly Hills, Kitzbühel, Las Vegas, New York, Nice, Porto Cervo, Puerto Banus, Saint Barth, Shanghai and South Coast Plaza).

Also worth noting is the ETA watch manufacture, which produces movements for the Swatch Group as well as an impressive number of watch brands (read our article on ETA: click here).

The group, aware that research and development are the keys to success, is extending its knowledge and expertise into more varied fields: microelectronics, micromechanics, telecommunications, the automotive industry (SMART) and services.

On 28 June 2010, Nicolas Hayek succumbed to a heart attack in the offices of the Swatch Group’s headquarters in Biel. A genius of the watch industry, a visionary, has passed away.