This boost is needed. “[We’ve had] financial challenges like everybody,” Hayek says. “We grow everywhere in the world except in China. But when people talk about financial challenges, they forget that we have always been independent. If you compare our balance sheet to many luxury groups, we have around 86% equity — no debt, no goodwill attached to our brands. So yes, we have less profit. But that’s because we keep our factories running, we keep our people, and we produce everything in Switzerland, despite the strong Swiss Franc that makes us lose hundreds of millions of turnovers and profits [every year].”
As a majority shareholder of Swatch Group (the Hayek family owns 39% of shares) and part of the family that founded the business, Hayek remains inspired by his father’s commitment to Swiss manufacturing. Swatch Group has 150 factories and trains more than 500 apprentices each year, producing for Swiss watch brands within and outside the group, meaning that, as the wider industry suffers, so does the group’s bottom line. “Despite pressure from some in the financial markets telling us to focus only on luxury or produce somewhere else, [or] fire our workers and make profit our sole priority, we stay with our long-term strategy,” he says. “That’s why we sometimes look a little strange in the stock market world. But my father did exactly the same thing; he always said: we sell watches, not shares.”
The focus now is on just that. Hayek aims to keep launching good products that boost consumer loyalty and generate more revenue. “Sometimes, you make mistakes; sometimes, there are things you could have done better. But that is normal in the life of an entrepreneur,” Hayek says. “If you try new things there is also a risk that it does not work. However, that is not what should trigger a change of strategy or attitude of the group.”
Hayek says he wouldn’t do anything differently if he was to launch the Royal Pop again. “Out of 220 stores, there were about 20 to 30 where there were issues, and most of the issues were not because of a mistake in organization,” he says. Some critics online suggested that there should’ve been an online reservation system, to avoid the overcrowding, though Hayek believes any such system would have crashed, if the 25 billion social impressions were anything to go by. “In theory, it sounds good, but in reality, it’s impossible. However, we are already thinking about future [collaboration] launches and another innovative way of doing so. There might be something exciting coming soon, which will be a headache for resellers.”
So, in the glow of the Royal Pop, and in the face of major industry challenges, we should expect more Swatch collabs. “Collaborations start often in the stomach with a feeling, and the head comes afterwards,” he says. “Look at the Moonswatch: it’s still growing like hell, four years later. Royal Pop was a total surprise, so of course we have things in the pipeline. There is a very nice operation coming on July 16 that’s very provocative, all about how speculative the world has become.”
