Swatch Group battle lines drawn between Hayek and US investor

Swatch Group continues to fight back against a campaign from one of its investors to overhaul the corporate structure and culture of the company.

Despite a prolonged period of disappointing financial results, CEO Nick Hayek was bullish last month about prospects for 2026, boosted by a strong Q4, which saw sales up 7.2% worldwide and across all price segments.

This delighted shareholders and investors, with the market reacting positively and the much-maligned share price getting a boost. They are up 15% this year.

Steven Wood, of US-based Greenwood Investors, owns a 0.5% stake in Swatch Group, and has been campaigning to get himself onto the company’s board for over a year.

Resisting this push by Wood informed the company’s decision last month to nominate its own candidate to the board last month, former Swiss government official Andreas Rickenbacher.

This left shareholders in very little doubt that the choice they have is between Wood and his campaign for an overhaul of governance and processes, and the status quo of Hayek. The battle lines have been drawn.

The Hayek family controls the company through its ownership of registered shares, which are a fifth of the face value of bearer shares, but with equal voting rights. It has 44% of voting rights and three board seats.

Wood sees this nepotism as a fundamental part of the problem, believing that the company is too conservative and not open to the sort of scrutiny that would result in better outcomes for shareholders.

Hayek will need more encouraging financial news if he is to continue to bat away the concerns of Wood, as the share price is still well down on its post-Covid peak.

“The Hayeks are very important for the history and the future of Swatch,” Wood said. “But I strongly believe that Swatch would benefit from a refreshment of the board with members that are able to express an opinion openly.”

As well as accusations of over-production and therefore oversized inventory, other criticisms of Swatch Group revolve around its portfolio of brands. There is increasing talk of the pressure it will come under to streamline its line-up, in a similar way to how Richemont recently did with Baume & Mercier, and is rumoured to be looking to do with Jaeger-LeCoultre. Whispers also persist of LVMH looking at ways to offload Zenith.