by ANDY HOFFMAN

WHEN the Swatch was born four decades ago, the plastic timepiece breathed new life into the staid Swiss watch industry, which was struggling to compete with cheap quartz models from Asia.

By the early 1990s, Swatch sales soared to about 20 million a year as consumers snapped up the colourful designs that married Swiss-made precision with an affordable fun factor. That boost provided financial cover for the slow-motion comeback of struggling high-end manufacturers (Blancpain, Breguet, Omega and others), building the Swatch Group AG into a powerhouse that today includes 17 brands and generates annual sales of about US$7.5 billion (RM33.4 billion).

But in recent years, the Swatch brand itself has languished, muscled out of the low end by fitness bands, smartwatches — especially the Apple Watch, now the top-selling timepiece of any sort — and smartphones, which millennials often use instead of wrist-wear. By 2021, unit sales of the Swatch brand were down to about 3.2 million, analysts estimate.

“It had lost some relevance for the younger generation,” says Nick Hayek, CEO of Swatch Group.

Now, though, a high-end offering from the Swatch stable is propping up its budget plastic sibling: The OmegaSwatch MoonSwatch.

Hayek and his team last year came up with a plan to create a model that would draw heavily on the Swatch Group’s vertical integration. A producer of watch movements and components on an industrial scale, Swatch would leverage its expertise in manufacturing and design, all for a price that remained true to the brand ethos.

Hayek says the Omega collaboration has made the Swatch brand part of the luxury conversation again, even with prices that are a fraction of high-end timepieces – pic by Bloomberg

The MoonSwatch leaned on the heritage and look of the Omega Speedmaster Moonwatch, an iconic timepiece worn on the moon by US astronauts. The steel, hand-wound, mechanical Moonwatch retails for about US$7,000, but the quartz-powered MoonSwatch, housed in multicoloured ceramic and bioplastic cases, costs only US$260.

When the MoonSwatch was introduced in March exclusively at Swatch boutiques, buyers thronged stores from Sydney to New York. Three months later it remains hard to get, with stores selling out within minutes of receiving resupplies.

Hayek insists he could sell 10 million MoonSwatches. “It lit instantly, putting Swatch back into the spotlight,” he says. “Everybody’s interested.”

The Covid-19 pandemic turbocharged the Swiss luxury watch business. Stuck at home during lockdowns, with little possibility of dining out or travelling, cash-flush consumers browsed Instagram posts of Rolexes, Pateks and, yes, Omega Speedmasters, newly coveting expensive mechanical watches. Prices for some steel sports-watch models more than doubled on the secondary market and today it’s almost impossible to buy a Rolex at the official retail price, even at an authorised dealer.

Hayek says the Omega collaboration has made the Swatch brand part of the luxury conversation again, even with prices that are a fraction of high-end timepieces. Commercial landlords want Swatch boutiques alongside top luxury fashion names, he says, and customers who stop by looking for the elusive MoonSwatch often check out other models. The company says that Swatch brand sales in Switzerland — excluding the MoonSwatch — are up 41% since the release and that other regions have seen similar increases.

Some MoonSwatch owners are reselling them online for double the retail price — not unlike the Rolex grey-market dealers profiting from the brand’s scarcity. Hayek, though, counsels against buying from so-called flippers, as the MoonSwatch isn’t limited and production is being ramped up to meet demand, with most of the six Swiss facilities making the watch now running 24 hours a day.

It’s an ironic about-face that Swatch’s revival is being powered by Omega, a brand Swatch helped prop up in the 1980s. Omega’s comeback took hold only later, when it became James Bond’s timepiece of choice through a lucrative marketing deal. The maker of the De Ville, Seamaster and Speedmaster models, Omega now accounts for more than a third of Swatch Group sales and more than half its profits, according to estimates by Morgan Stanley and industry researcher LuxeConsult.

“Swatch proved it was possible to make a timepiece in Switzerland that had a trendy design and disruptive marketing, while selling it at an extremely competitive price,” says LuxeConsult head Oliver Mueller. “History is repeating itself 40 years later, but in reverse.”

The Speedmaster wasn’t the only model Hayek considered for the Swatch collaboration. He also commissioned Swatch bioceramic versions of the Seamaster, as well as the Blancpain Fifty Fathoms, a storied diving timepiece that retails for about US$13,000. Hayek is happy to show those prototypes, but there’s one he won’t reveal: A mock-up of a Swatch collaboration with a “very high-end” outside brand.

Is it a Patek? An Audemars Piguet? A Rolex? He won’t say. But he does suggest that a Swatch collaboration might be the perfect way to introduce a new generation to one of Switzerland’s most sought-after, but expensive and hard-to-get brands.

The exclusivity of such brands, he says, “cannot be the message. That’s not my message”. — Bloomberg / pic source: omegawatches.com