Swatch Group is preparing for a generational change

Siblings Nick Hayek (CEO) and Nayla Hayek (Chairwoman of the Board of Directors) revealed this in an interview with the newspaper "Schweiz am Wochenende".

„There is a clear plan for how the board of directors will develop in the future,“ say the two main shareholders of the Swatch Group. It has long been speculated that Mar Hayek (son of Nayla Hayek), who was elected to the board two years ago, will take over the reins. „We aren’t forcing him into anything,“ comments Nick Hayek, leaving the decision regarding the group’s future CEO open. „Marc is doing an excellent job; he’s thriving in his role. But we also have very strong people in operations who can and want to take on more responsibility.“

Hayek, 71, also gave no specific details about the timing of the handover in the interview. "We don't discuss our plans with journalists. But yes, the moment will come; I'm not getting any younger. If something happens to me tomorrow, there's no problem. We have a plan."„

Whether his successor will act more in line with Steve Wood's vision is an intriguing question. The American, whose investment company Greenwood Investors holds 0.5 percent of the publicly traded Swatch Group, ran for a seat on the board of directors as a representative of the owner shareholders in May of this year. According to official Swatch Group statements, he was unsuccessful. Woods disagrees and believes that the election process was not conducted properly.

Woods has repeatedly and vehemently criticized the Swatch Group's strategy. He told the Swiss magazine The Market:

He stated that he would bring fresh perspectives as a member of the board of directors. This would include strengthening prestige brands such as Breguet, Blancpain, and Harry Winston.

„They need to invest in a first-class customer experience and implement massive personalization programs that focus on scarcity and exclusivity. That’s exactly what their competitors like Richemont and LVMH are doing very well. The luxury goods market is fiercely competitive,“ said Woods.

Background: Since the beginning of 2023, the shares of the Swiss company have lost about fifty percent of their value. And the balance sheet also shows negative figures for sales and profit.

Swatch Group is not withdrawing from the stock exchange.

As a publicly traded company, the Swatch Group must have a board of directors, even if it were to delist from the stock exchange. Nick Hayek himself repeatedly flirts with this idea. And he makes no secret of the fact that he's not a fan of stock trading. But withdrawing would be too expensive. The 74-year-old chairwoman of the board, Nayla Hayek, also admits this in an interview with "Schweiz am Wochenende": "Yes, that's true." "We don't sell stocks, we sell watches," adds her brother, Nick Hayek.

„Of course we get criticism because of the share price, but we get more praise for focusing on our products, employees and customers instead of just the stock price,“ says Nayla Hayek, explaining: „For us, this company is like a child. A family member. And all our people are family members. We can’t just walk into the boardroom and say: Okay, now we’re going to increase profits, now we’re going to lay off 4,000 people.“

Nick Hayek explains the simple reason why competitors like Richemont perform better on the stock market: „Richemont is (…) not comparable to us. They operate exclusively in the luxury segment, and over 75 percent of their revenue comes from jewelry, which doesn't have to be ‚Swiss Made‘. Because they focus solely on luxury, their industrial base is much smaller and less vertically integrated than that of the Swatch Group.“

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