Lucien Piccard Inc. and affiliated companies LP Watch Group and Charles Winston Luxury Group filed for Chapter 11 bankruptcy protection in Florida on July 14. Documents filed with the court show that together, the three companies have about $25 million in liabilities and $22.5 million in assets. Chapter 11 gives companies facing creditor pressure time to reorganize their business.

Lucien Piccard was founded in Switzerland in 1923. In recent years, the Hollywood, Florida-based LP Watch Group launched new brands LP Italy, LP Swiss, and DuFonte by Lucien Piccard. The LP Italy “Stratosphere” watch (shown below) won the JCK 2005 award for most innovative new design. Reports indicate that the brand spent heavily on advertising and marketing during 2007-2009. In 2007, LP Watch Group became a sponsor of the American Le Mans auto racing series. The Group also sponsored the Executive Women’s Golf Association.

Swatch Group announced today that it will take over Swiss-based watch movement maker Tanzarella Ltd. The takeover, effective July 12, will be achieved by transferring Tanzarella assets to a newly-founded Swatch Group company called Assemti Ltd. The new company will operate from Tanzarella’s present location in Riazzino / Locarno. The Swatch Group Ltd. will acquire the Tanzarella’s building from Credit Suisse.

Tanzarella employs 236 people, all of whom will join the new company. The former owner, Mr. Enrico Tanzarella, will remain with the company as the director of operations. Previously Tanzarella worked exclusively for ETA SA Manufacture Horlogère Suisse, a company of The Swatch Group Ltd.

The takeover comes on the heels of the passing of Swatch Group founder and chairman Nicolas Hayek on June 28. The company’s directors named Hayek’s daughter, Nayla, chairwoman on June 30.

You may read the Swatch Group press release here.

Nayla Hayek has been named chairwoman of the Swatch Group Ltd., succeeding her father, Nicolas G. Hayek, who died of heart failure at Swatch Group headquarters in Bienne, Switzerland on June 28. She was elected by a unanimous vote of the board of directors on June 30. Previously, she was vice-chairman of the board.

The move is doubtless the transition that Hayek Senior wanted. It ensures that the management of the world’s largest watch company remains in family hands. Nayla Hayek’s brother, G. Nicolas (Nick) Hayek, succeeded his father as Swatch Group CEO in 2003. Hayek Senior had two children. The fact that they now hold the two most important posts in the company that he founded guarantees that the policies and vision he put in place will remain.

Nicolas Hayek Senior controlled 40% of the shares of the Swatch Group through what is called “the Hayek Pool.” The Hayek family is understood to now control those shares. Nayla Hayek has been a member of the Swatch Group board of directors since 1995 and was for many years an advisor to the group. She had a career raising Arabian horses and as an international Arabian horse judge. In 2007, she began working in the Swatch Group, in addition to her board of directors duties. In 2008, she became CEO of Tiffany Watch Co. Ltd., which is a Swatch Group subsidiary via an agreement signed with Tiffany & Co., New York, in 2008.

Nayla Hayek is the mother of Marc A. Hayek, CEO of Blancpain and a member of the group’s executive management board. Blancpain is one of 18 Swatch Group watch brands.

Switzerland has responded to the sudden death of Swatch Group Chairman Nicolas G. Hayek on June 28 with a rare outpouring of grief, praise, and appreciation. Hayek, 82, was born in Beirut, Lebanon, but grew up in Switzerland and spent his entire professional life there. Hayek has been a prominent public figure in the country for four decades and one of the country’s most famous and, ultimately, beloved figures.

He founded a consulting company, Hayek Engineering Inc., in Zurich in 1965 and quickly became Switzerland’s most important consultant, the Mr. Fixit that both industry and the Swiss government called on to develop strategies to fix seemingly unfixable problems. Mr. Fixit became Mr. Swatch in the 1980s when the Swiss banks called on him to develop a plan to rescue the struggling Swiss watch industry.

The watch industry was dominated in those days by two giant groups, ASUAG and SSIH, both of which were hemorrhaging red ink, surviving on bank bailouts. Hayek submitted a detailed reorganization and recovery plan, which merged the two groups into a single group called SMH (Swiss Microelectronics and Horology); the name later was changed to the Swatch Group. The banks not only approved Hayek’s plan, they pressed him to execute the plan as chairman and CEO of the new group. The banks agreed to sell shares in the new and unproven company at extremely favorable rates to Hayek and a group of investors formed by him in order to get the new company on its feet. Through what is known as “the Hayek pool,” Hayek controlled these shares, which amount today to 41% of Swatch Group shares. The arrangement gave some financial stability to the new company and gave Hayek the control he needed to run it. In time, as the Swatch Group prospered, it made him a multi-billionaire.

Mr. Hayek at a 2009 Baselworld press conference announcing the Breguet at the Louvre exhibition.

SMH was launched in 1985. Its first great success was Swatch, the plastic analog watch that had been introduced two years before and sold for around $35. ETA had created Swatch in the early 1980s but could not get the money to finance it. Hayek, while working on his rescue plan, backed the project and got the banks to finance it. Swatch showed that Switzerland could master quartz technology and helped secure Switzerland’s industrial base. It was produced by ETA, SMH’s movement-making subsidiary in Grenchen, Switzerland. Swatch became a design icon. It also made Hayek famous in business circles as the man who competed with Japan’s electronic juggernaut and won. Hayek argued that Swatch was proof that Western countries could and should maintain their manufacturing bases, that it was possible for a high-wage country to produce high value, high quality, high volume consumer products at low cost. Swatch’s enormous sales success returned SMH to profitability.

A collection of Swatch watches.

In the 1990s, Hayek and his team turned their attention to restoring the fortunes of other group brands, particularly Omega. Today Omega is the second-best-selling Swiss watch after Rolex.

Hayek at a press conference flanked by former astronauts.

In 1999, Hayek acquired the Breguet brand and the Nouvelle Lemania factory from Investcorp. In a surprise move, Hayek named himself CEO of Breguet. Over the course of the last decade, he has orchestrated a stunning revival of Breguet’s fortunes. Breguet had annual sales of 30 million Swiss francs when the Swatch Group acquired it. By 2003, annual sales had soared to SF200 million. As for the Swatch Group, in the course of his 24-year reign as its head, sales rose to a high of SF5.97 billion in the record year of 2008.

Swatch Group extremes: below left with Breguet Marie-Antoinette No. 1160, and right with a Swatch plastic chronograph from the 007 Villains collection.

Hayek, ultra-intelligent, ultra-passionate, ultra-opinionated, was an outspoken and often controversial figure in Swiss political, economic and cultural life. He was a frequent and caustic critic of Swiss banks and a booster of causes like the environment. (He entered a joint venture with Mercedes-Benz in 1994 to develop an environmentally friendly city car, the Swatchmobile. Ultimately the Swatch Group pulled out of the project, but Hayek’s idea came to fruition as today’s Smart car, launched by Mercedes in 1997. Smart stands for Swatch Mercedes Art car.)

Internationally, he was an outspoken defender of his adopted country, an articulate ambassador promoting core Swiss values of uniqueness, neutrality and fairness, and manufacturing expertise. His death was huge news in Switzerland. Swiss President Doris Leuthard remarked, “We owe Mr. Hayek a lot.” Several Swiss papers devoted their entire front pages to Hayek, according to swissinfo.ch, a Web site devoted to Swiss news. Geneva-based Le Temps spent its first three pages on Hayek’s death and eventful life. In an editorial, Le Temps said Hayek “entered into the history books, among the greatest entrepreneurs of the 20th century. He who would become the emperor of the Swatch Group was primarily its messiah, then the entrepreneur who succeeded in restructuring what everyone thought was a lost cause. He renewed the mechanical tradition, re-established the supremacy of Omega, made Breguet rise again from the ashes, opened prestigious boutiques. The defeats of the watch industry were forgotten. The conquest of the world continued. It would never stop.”

A headline in Blick, a Swiss tabloid, said, “Thanks for Swatch! Thanks for Smart! Thanks for everything!” Said Blick, “Yesterday the greatest entrepreneur of Switzerland died, one of the most impressive personalities this country has ever known.”

Hayek’s death was also news internationally. Major newspapers like The New York Times, Financial Times, and Wall Street Journal ran obituaries. Johann Rupert, executive chairman of the Richemont Group, issued a tribute. “Nicolas Hayek’s death is an immense loss for Switzerland and for the watch industry,” Rupert said. “He was the driving force behind Swiss watchmaking; its leader and its savior. Our industry has lost one of its champions, respected by everyone who dealt with him; a man of honor, gravitas and great personal charm. He was a true leader and entrepreneur and an inspiration to me.”

Reuters correspondent Silke Koltrowitz interviewed Ulysee Nardin President and CEO Rolf Schnyder and Audemars Piguet CEO Philippe Merk at the Global Luxury Summit in Paris earlier this month. Both men said their sales are increasing, and each has raised Eurozone prices as the Swiss franc strengthens against the euro. The franc has risen about 4.6 percent against the euro this year.

Schnyder told the Luxury Summit “We changed all our prices in the euro zone a week ago. We took an exchange rate of 1.40.” Merk said “Of course there’s the pressure to adjust pricing upwards in Europe. This trend is going to persist. We had to make a little adjustment in March. We increased prices by 4 percent.”

Commenting on global sales, Schnyder said U.S. sales turned positive at the end of 2009 and that the market is recovering strongly with sales up 35% in May against admittedly weak year-earlier figures. Schnyder said that China and Russia are also doing well. Schnyder expects UN sales to increase 20 to 25% this year.

AP’s sales were down about 10% last year, but the brand saw a 10% increase in the first 4 months of 2010. Merk said “The motor in this industry is the Chinese consumer. That’s certainly very positive. The second smaller engine I believe is Latin America, which showed excellent growth last year, a trend that continues to persist this year.” Merk also noted strong sales recoveries in the USA and the Middle East.

Commenting on the the impact of the European debt crisis on luxury watch demand, Schnyder said “I’m not so worried about it. It affects more the medium-priced brands because the middle class are the people who suffer the most.”

Merk sees the European market losing momentum over both the short and long term. “Europe compared to Asia and also the Americas has slowed down. I think it’s not only the euro, it’s the general economic climate which is not as strong as five or ten years ago,” he said. “We expect less growth from Europe in the future.”

Schnyder also addressed speculation that his independent firm might be acquired by one of the large groups such as LVMH, Richemont or Swatch Group. In a nutshell, he displayed the “Not for sale” sign, saying he expects the brand to remain independent. Schnyder said he has a successor to head the brand in mind, but did not say who it will be. Schnyder purchased the brand with partners in 1983 and has since served as its chief executive.

You can read an in-depth profile of Schnyder in .pdf format from WatchTime’s June, 2005 issue by clicking here.

Read the original Luxury Summit report on the Reuters website.

Ulysse Nardin customers in the U.S. can register their newly-purchased timepieces online and receive an automatic warranty upgrade. The new international warranty is valid for 3 years from the date of purchase (extended from the original 2 years), and customers who register their watches receive a free welcome gift and become members of the company’s Anchor Club.

Anchor Club members will also receive information about products, new developments, Ulysse Nardin achievements, and events around the world. Timepieces may be registered at http://www.ulysse-nardin.ch.

Movado Group, Inc. has announced its first quarter results. The company enjoyed top-line growth of 25%, though the bottom line did not fair as well, with an adjusted net loss of $4.8 million. The company also announced that it will close its retail boutique division effective June 30, 2010 in an effort to redirect investment toward higher return businesses. The move does not affect the company’s 31 outlet stores, nor will it affect the company’s flagship Movado Boutique in New York’s Rockefeller Center.

Regarding the boutique closings, Rick Cote, President and Chief Operating Officer of Movado Group, Inc., said, “Following several years of unprofitability and a strategic review of the business, we have decided to close our retail boutique division. We believe that this action will assist Movado Group to return U.S. operations to profitability. We will continue to make strategic investments in our brands to capitalize on growth prospects, build market share and elevate our connection with consumers. We believe in the strength of the Movado brand and the rest of our portfolio of iconic brands, and we expect these actions will solidify our position as a leader in the watch industry.”

The Company anticipates that closing the retail boutique division will lower annual revenues by approximately $30 million, but will immediately improve profitability for the 2011 fiscal year on an adjusted basis and have a favorable impact on the multi-year profitability and cash flow plan it expects to present later this year. As reflected in the Company’s first quarter earnings announcement issued on May 27, the Company has recorded a $3.4 million pre-tax impairment charge related to the closure of the retail boutiques and anticipates recording additional pre-tax restructuring charges of approximately $21.6 million over the remainder of fiscal 2011. Costs associated with the retail boutique division closure include rent settlements, severance, third-party fees and asset write-offs. The cash portion of these charges, which is estimated to be approximately $20 million, will be paid with existing funds.

“We are confident the closure of our retail boutiques is in the best long-term interests of our Company and all of our stakeholders, and we look forward to focusing on new opportunities we see in our wholesale business,” stated Chairman and Chief Executive Officer Efraim Grinberg. “We are particularly grateful to our retail boutique employees for their dedication to our Company and are committed to providing them with a smooth transition. We also greatly appreciate the loyalty that our boutique customers have shown us for so many years. Consumers will continue to be able to find our watches across the U.S. through our many retail partners, and we will be reaching out to them to ensure they know how to obtain service for existing merchandise going forward. We look forward to serving our wholesale customers and consumers for many years to come.”

The NPD Group, a leading market research company, announced that it has acquired LGI Network, which provides retail point-of-sale information on fine watches and branded jewelry. NPD tracks sales of fashion watches and other accessories through its consumer and retail tracking services.

Together, the two companies’ sales information will provide the industry’s first holistic view of the watch and jewelry marketplace. LGI collects information from a panel of retailers including leading specialty stores and independents, complementing NPD’s panel of department stores.

LGI will continue to operate independently for the first two years. Fred Levin, President LGI Network, will report to Rupert Walters, Group President for Entertainment & Communications, Beauty, Fashion & Sports at The NPD Group.

“With the acquisition of LGI Network, NPD gains strategic coverage of a key market segment and is well positioned to continue to build our business,” said Walters. “LGI’s people, products, and expertise in the luxury market will enable us to introduce more services more quickly in the U.S. and will also provide a solid foundation for international expansion in the future.”

“We are excited to be joining NPD, an industry leader, and a company that shares LGI’s commitment to safeguarding our brand and retailer’s confidential data and maintaining strict objectivity standards. NPD has a longstanding reputation for providing critically important decision making information to clients. Under NPD, we will be able to offer our industry’s first 360 degree view of what is happening at retail,” said Levin. “With consumer shopping habits evolving at an unprecedented pace, our clients will have the information and insights they need to understand and profit from these changes.”

U.S. Customs authorities oversaw the destruction of about 7000 counterfeit Rolex watches at a contractor’s site in Philadelphia. The fakes met their fate under a multi-ton double-drum steamroller, which ran over the watches about 10 times. Customs officials staged the destruction to highlight law enforcement’s role in protecting intellectual property rights.

The watches were seized from Binh Cam Tran who is serving six years in federal prison after being convicted of trafficking in counterfeit goods, conspiracy, and nine counts of money laundering. Binh was also ordered to pay Rolex USA $2,273,166 in restitution.

Authorities say Binh fabricated hundreds of thousands of fake Rolex watches in his home near Philadelphia. Officials seized about 24,000 counterfeit watches, and enough parts to create 1 million more.

Photo: Steve Sapp – U.S. Customs and Border Protection

Swiss manufacturer Carl F. Bucherer, creator of the CFB A1000 movement with peripheral winding rotor, announced Friday that the company and CEO Thomas Morf will part ways with immediate effect. No reasons were given for the departure. Bucherer Group will continue with development and expansion of the Carl F. Bucherer brand.

Former Carl F. Bucherer CEO Thomas Morf

Days gone by: Morf accepting the 2009 Goldene Unruh (“Golden Balance Wheel”) award for technical achievement for the CFB A1000 movement from Christian Pfeiffer-Belli (left) and Thomas Wanka of WatchTime’s sister publication Uhren Magazin.