Published: April 22, 2011
At Swatch, an Enviable Problem: An Excess of Eager Customers for Its Products
By RAPHAEL MINDER
BASEL, Switzerland — Nick Hayek, the chief executive of the Swatch Group, is facing a problem many of his corporate counterparts might envy: he’s doing too much business.
Swatch, the world’s largest watchmaker, is rushing to add factory capacity so that it can make enough watches to meet demand. It wants to add as many as 2,000 employees this year — about 1,500 of them at home in Switzerland. But it is struggling to find enough qualified people.
“Managing our stock is at the moment not an issue for us because demand is so big that we unfortunately don’t even have the time to build up any stock,” Mr. Hayek said last month at Baselworld, the watch industry’s biggest fair. “I hate that feeling of missing sales because of a shortage in products.”
As a management consultant, Nicolas Hayek had been hired by banks to close two manufacturers in the early 1980s, at a time when Swiss watchmakers were getting crushed by less expensive Japanese competitors. Instead, he merged and acquired a stake in the struggling companies and revived the industry with the introduction of the inexpensive plastic Swatch watch.
...Mr. Hayek takes pride in not having responded to alarmist forecasts and cut back production at the onset of the financial crisis. He also says the United States and other Western nations too quickly abandoned manufacturing that formed the backbone of their economies.
“Instead of crying and blaming China for producing goods at a lower cost for the whole world, countries like the U.S., for example, should realize that outsourcing most of the production is a big mistake,” he said.
“The success of Switzerland and in particular of its watch industry — not just in the luxury segment — is the proof that entrepreneurship is likely to flourish in a country that believes in maintaining manufacturing and factories, even with a very high cost base. That is something that the U.S. used to understand, but the days of Henry Ford and others are sadly long gone.”
...Mr. Hayek said he was concentrating on developing the brands that his company already owned. “There might be some more takeover opportunities for us in this industry, but we are not hunting for takeovers,” he said. “We can reach 10 billion francs of sales just by internal growth, and that is our main objective.”
...“We sell watches and not shares.”