The Swatch Group, one of Switzerland’s most iconic watchmakers, is entering a period of rare corporate turbulence as external shareholder pressure mounts against the founding Hayek family’s tight control. In a bold move, U.S. investor Steven Wood of GreenWood Investors is lobbying for a seat on the company’s board, reigniting long-standing concerns over corporate governance, declining profitability, and strategic direction.
The catalyst for this confrontation lies in Swatch’s financial struggles. Once a dominant player in both the luxury and mass-market timepiece segments, the company has seen its profit margins shrink dramatically. From a peak of over 1.6 billion Swiss francs in 2013, Swatch's annual profits fell to just 219 million francs in the most recent fiscal year. Sales dropped 15%, with significant underperformance in the critical Chinese market, which had long been a pillar of growth for the Swiss watch industry.
Critics argue that Swatch's management has been slow to adapt to shifting market dynamics, particularly the rapid digitalization of retail and the growing dominance of smartwatches. The company’s resistance to e-commerce and limited online engagement have left it vulnerable, especially among younger consumers whose purchasing behaviors differ markedly from previous generations. Meanwhile, competitors such as Rolex and Omega have made significant strides in modernizing their brand image and distribution strategies.
At the center of the current corporate standoff is the Hayek family, which controls around 44% of Swatch’s voting rights. The founding family’s influence has kept the supervisory board largely closed to outside voices, with little turnover and limited transparency. This insular governance structure is now under scrutiny from institutional investors and proxy advisory firms, which have advised shareholders to vote against the reappointment of board members lacking independence.
Steven Wood, who holds roughly 0.5% of Swatch shares, argues that fresh perspectives are urgently needed. His campaign is not only focused on board representation but also calls for a strategic refocus on Swatch’s high-end brands like Breguet, Blancpain, and Omega, which he believes are being underutilized. These brands possess strong heritage value and could command greater market share with the right branding and distribution approach.
Despite mounting pressure, the Hayek family has remained steadfast in defending its leadership. CEO Nick Hayek has publicly dismissed external criticism, emphasizing the company’s independence and long-term vision. However, shareholder patience appears to be wearing thin. Attendance and sentiment at the upcoming general assembly could serve as a bellwether for future governance changes.
Market reaction to the unfolding drama has been mixed. Some investors are optimistic that a confrontation of this scale might finally prompt necessary reforms, while others fear that the company's entrenched leadership may resist even modest change. Shares of Swatch have experienced moderate volatility amid the boardroom tussle, reflecting both investor frustration and speculative interest in potential strategic shifts.
This shareholder activism mirrors broader trends across the luxury goods and corporate governance sectors, where long-standing management structures are increasingly being challenged by investors demanding transparency, accountability, and modernization. In an industry defined by heritage and tradition, balancing these elements with evolving consumer and investor expectations is proving to be a delicate task.
The conflict at Swatch serves as a microcosm of the tension between legacy control and modern governance practices. The Hayek family’s historical stewardship has unquestionably helped build a global brand, but current market realities demand agility, openness, and strategic renewal. Whether the company can navigate this crossroads effectively may determine not only its financial recovery but also its relevance in a fast-evolving global market. For shareholders and watch enthusiasts alike, the outcome of this boardroom battle may mark the beginning of a new era—or the entrenchment of an old one.