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Swatch Group Warns LVMH, Richemont Over Watch Parts

Swatch Group Warns LVMH, Richemont Over Watch Parts

Swatch Group Warns LVMH, Richemont Over Watch Parts
March 15
00:18 2019
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BIEL, Switzerland — Nick Hayek challenged rivals Compagnie Financière Richemont and LVMH Moët Hennessy Louis Vuitton by warning that Switzerland’s biggest watchmaker would stop supplying crucial movements to its major competitors after the expiry of their current contracts.
The threat, made at Swatch Group’s media conference at the flamboyant new home of its top-selling Swatch brand, marked the latest salvo in the years-long tussle between the watchmaking operations of some of the world’s top luxury goods groups.
Movements are the hearts of mechanical watches, and Swatch Group, through its ETA subsidiary, is by far the dominant Swiss supplier. Swatch tried almost a decade ago to restrict sales to third parties. However, its initiative provoked an investigation by Switzerland’s competition authority, which ascertained ETA’s market dominance and obliged it to maintain sales, albeit at an annually declining rate. That obligation expires at the end of this year.
“We’re not worried at all. We need all the capacity for ourselves. They should be worried, It’s not self-service anymore,” said a combative Hayek, referring to his big rivals.
Like his now deceased father, the current Swatch Group chief executive officer has railed against Richemont and especially LVMH‘s mid-market Tag Heuer brand.
The Hayeks, Swatch Group’s biggest shareholders, have

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