the Insiders


July 1, 2010 11:21 PM

Fashion, Retail

Father Time

In the mid-Eighties, Swatch watches were an indicator of one’s position in the hierarchy of cool....

In the mid-Eighties, Swatch watches were an indicator of one’s position in the hierarchy of cool. Teens wore the peppy plastic timepieces in multiples, the faces staggered in a fanciful zigzag up the wrist. The trend may or may not have started on the more crinkly wrist of Swatch co-founder and longtime chairman Nicolas G. Hayek.
Hayek passed away earlier this week doing what he loved, working at the Biel, Switzerland, headquarters of Swatch Group, now the largest producer of finished watches in the world. He, too, loved wearing multiple timepieces at once, and could select from among his group’s brands — from the feisty Swatch right up to Breguet, the venerable house that harkens back to the early days of Swiss watchmaking.

Like earlier profiles of Hayek, his obits invariably discussed both sides of his business without noting the connective tissue: nearly two decades before working the economic extremes of fashion consumption became a trend in itself, Hayek was a pioneer in the realm of high-low. He was a man ahead of his time in other ways, as well, specifically in his dedication to developing green methods of manufacturing for the auto industry. And he remained throughout his career something of a merry renegade, arguing that the high-wage West must not secede its manufacturing capabilities to the more cost-friendly East.

About 30 years ago, Hayek was an entrepreneurial consultant to the railroad industry in Switzerland. With the country’s lauded watchmaking industry in shambles under the assault of inexpensive digital competition from Japan, he was asked to oversee the sale of two anchor manufacturing groups, SSIH and ASUAG, to a Japanese concern. Hayek got involved, but differently than expected, merging the two firms and ultimately buying in and taking over their management.

Hayek didn’t invent the cheap Swiss watch — it was already in development. Rather, he identified it as the immediate salvation of the formerly all-high-end Swiss industry and, along with it, its core of jobs.

“It is possible to build high-quality, high-value, mass market, consumer products in high-wage countries at low cost,” he told the Harvard Business Review in 1993. “Notice I said build, not just design and sell.”

He considered a healthy dose of chauvinism not just acceptable but essential. “It’s not just possible to build mass market products in countries like Switzerland. It’s mandatory,” he argued. “This is a principle I am passionate about — and a principle business leaders in the United States and Europe don’t take seriously enough. We are all global companies competing in global markets. But that does not mean we owe no allegiance to our own societies and cultures.”

That core belief led Hayek to throw his support behind the plastic watch, a shock to the system of the rarefied, hand-trained Swiss. As Western teenagers went crazy for Swatch’s witty plastic fare, he lost no time in noting a cultural resonance that, he argued, ran deeper than mere fashion. He thus fed the frenzy with highly creative marketing, whether via artistic collaboration or trumpeting the brand’s launch in Germany with a giant Swatch suspended from the exterior of the tallest building in Frankfurt.

Just as he celebrated high-quality accessibility, Hayek also touted the pleasure of exquisite and exquisitely priced timepieces. They are not, he argued, pricy anachronisms, but pieces of art. He orchestrated the renaissance of the ailing Omega brand, and, in 1999, Hayek’s Swatch Group bought Groupe Horloger Breguet, the house founded in 1775 by Abraham-Louis Breguet who once undertook construction of a pocket watch for Marie Antoinette. The piece was so involved that it took forever to complete, and some unfortunate political unrest got to the Queen before the watch did. That historical tidbit led Hayek to write a check for the restoration of her beloved Petit Trianon at Versailles, which reopened in 2008.

Such counterpoint put Hayek 20 years ahead of the high-low curve. And he never lost his zeal for innovation. As recently as at Baselworld in May, he stressed the need for the kind of daring that goes beyond the desire for wealth. In an interview with, he sounds as if he’s offering advice for the ages. “I have a message for young people,” he said. “Please don’t sit in front of the computer and think you can make money by playing on the stock exchange. You are not creating wealth and you are not creating anything. You create things by being an entrepreneur, creating new ideas and products, and new jobs and new wealth.”

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