Swatch Watch

"We sell the mentality of Switzerland," said the late Nicolas Hayek, founder of the Swatch Group Ltd., as reported by Margalit Fox in a New York Times obituary (6/29/10). What Nicolas sold was a lot of Swiss watches at a time when they were otherwise in decline — and perhaps headed for extinction. In fact, Nicolas had been retained by a group of Swiss banks to draw up a plan to liquidate Switzerland’s watchmaking industry. But Nicolas ended up buying two of its biggest companies instead, and reinventing the business.

This was the early 1980s and the problem was that Seiko and other Japanese watchmakers were making cheap, digital watches, and the public was snapping them up. Nicolas’s solution was the Swatch, which were "lightweight, with vibrantly colored bands and breezy novelty faces." With just "51 parts, as opposed to the nearly 100 needed to make a traditional wristwatch," the Swatch initially "retailed for less than $35" in the United States.

The nifty part was that the watches became collectibles: "It was very likely the first time that ordinary people had even considered owning multiple watches." Nicolas himself sometimes wore as many as four watches on each arm — cheap and luxury models (which his company also made) alike. The best part was that Swatch sales drove sales of more expensive watches, too: "By redirecting consumers’ attention to Swiss watchmaking as a whole, the little plastic watch lifted all boats." Nicolas Hayek was 82, and died the day before yesterday, with his watches on, at the Swatch Group headquarters in Biel/Bienne, Switzerland.