Swatch fire strikes entire Swiss watch industry

Swatch fire strikes entire Swiss watch industry

A fire in one of Swatch Group’s factories threatens to impact the entire Swiss watch industry, as the company is an important parts supplier for its Swiss competitors.

Production back at full speed soon

About two thirds of all Swiss watches are built with Swatch parts: it has a Swiss monopoly on certain mechanisms and incidentally, a fire raged at a factory that creates these parts. CEO Nick Hayek has announced that there was only limited damage, and that within three to four weeks, full production could be resumed, but nevertheless, quite a few deliveries will be delayed.

 

Swatch has to deliver its system to competitors in Switzerland, as it has a dominant market position. It had reached an agreement in October to lower its forced deliveries to 75 % of the average of the past few years, with the goal to reach 55 % by 2015.

 

Swatch Group had a 2012 turnover of 6.5 billion euro. The first half of 2013 saw a 8.7 % increase to 3.4 billion euro, delivering a 620 million euro net profit.

 

 

 

(Translated by Gary Peeters)

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