Swatch May Cut Off Supplying Rivals

There is no doubt about it. Swatch  components are widely used, outside the brand itself. But that could change as soon as January 1st. The Swatch Group is considering cutting back their sales of the internal copoments to competitors to concentrate on making enough supplies for it’s own brands such as Longines, Omega, Tossot, Breguet and Blancpain.

For big pocket brands such as Hublot, the highly success timepiece brand under the LVMH Moët Hennessy Louis Vuitton group  that had using Swatch components for years, won’ really be affected much. (In 2007, Hublot invested 40 million francs to develop their own manufacturing company and with making 29,000 watches a year, selling at an average of $27,000 each, puts the company at 75% of the brand revune coming from in house).

But smaller brands like Edox, Sellita and TAG Heauer fear that they won’t be able to survivr if Swatch ends its role as a supplier. While Swatch got the move approved by Switzerland’s competion authority, nice companies have are challenging it in court because of the lack of finanical weight to keep them afloat on their own

Swatch is by far the world’s largest watchmaker with $6.95 billion, in revune last year. The company insists they are not trying to snuff out their rivals and and in fact,  the independencey will only strengthen the quality and competitiveness of the industry as a whole.

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Sorce: nytimes.com