In a fairly recent Wall Street Journal report, journalist Matthew Dalton detailed the unlikely story of Steven Wood, a New York-based investor who tried to win a board seat at Swatch Group, and the quiet resistance he met from the company’s famously guarded leadership. Wood, who runs GreenWood Investors, didn’t charge in with demands. Instead, he approached with charm: cigars, luxury strategy books, and a respectful appeal to Swatch’s proud legacy. What followed was a case study in the limits of influence inside a tightly held, family-led Swiss watch empire. How does this compare to how Richemont, Switzerland’s other luxury watch powerhouse, has handled similar pressures?
Though both groups share structural similarities, dual-class shares, deep heritage, and family control, their strategies in recent years diverge meaningfully. The result? A contrast in investor confidence, brand positioning, and ultimately, stock market performance.
Swatch Group, still run by the heirs of the late Nicolas G. Hayek, has always prioritized independence over market appeasement. For the uninitiated, Nicolas Hayek is as close to a superhero as we can get in the watch industry. When Wood proposed strategic changes, such as elevating Omega’s positioning, limiting supply for exclusivity, and embracing collaborations à la Ferrari or Hermès, he was met with early interest, then silence. Even after winning 62% of the minority shareholder vote at the company’s annual meeting, Swatch’s board rejected his candidacy, citing the importance of Swiss residency and cultural alignment.
This insularity is emblematic of Swatch’s broader posture. The company has been reluctant to adjust production volumes, even amid a luxury slowdown in China, its most critical market. In 2023, Swatch’s net profit dropped 78%, and the company’s shares are trading at their lowest levels since 2008. Short interest in the stock hovers near 27%, a clear sign that institutional investors expect further downside. Despite this, the Hayek-led board insists on staying the course, publicly asserting that “the Swiss watch industry cannot and will not be just to serve an elite of rich people.” A noble statement, hard to argue with. It’s a principled stance, to be sure. But it’s also one that potentially alienated investors looking for more modern governance or market responsiveness.
Compare this to Compagnie Financière Richemont, owner of Cartier, Jaeger-LeCoultre, Vacheron Constantin, and other luxury maisons. Richemont’s watch division has suffered similar market headwinds. In fiscal year 2024, Richemont’s watch sales dropped 13%, and operating margins in the segment fell from 15.2% to just 5.3%, according to the company’s annual report. Yet the group took decisive action: production was scaled back to avoid overstock, particularly in the Asia-Pacific region, which saw a 27% drop in watch sales.
Chairman Johann Rupert publicly acknowledged the slowdown and emphasized long-term brand equity over short-term volume. “We are deliberately not flooding the market with unsold inventory,” he told investors. It was a clear, if painful, admission that luxury depends on scarcity as much as desirability.
Crucially, Richemont also engaged with shareholders more openly. When activist fund Bluebell Capital tried to insert a minority voice on Richemont’s board in 2022, the company put the vote to shareholders. Though the proposal failed, receiving just 9.5% support, Richemont’s willingness to hold the vote publicly was itself a signal. The group respected shareholder process, even if it didn’t yield change. That (very modest) openness has earned Richemont more goodwill. While its watch division underperforms, its overall stock has fared much better. As of mid-2025, Richemont’s share price remains roughly flat over the past 12 months, buoyed by continued strength in its jewellery division (Cartier and Van Cleef & Arpels). By contrast, Swatch Group’s shares are down nearly 30% over the same period, and its valuation multiple continues to contract.
Both Swatch and Richemont operate in competing corners of the luxury market. Their strategic responses to current pressures reveal two very different philosophies. Swatch is guarding its autonomy, at the cost of transparency, flexibility, and possibly also investor confidence. Richemont, while hardly activist-friendly, is demonstrating a more adaptive approach, particularly in managing inventory and shareholder communication.
While I’m rooting for both here, the question is whether a legacy business can survive the volatility of the modern luxury cycle without reform. For now, Richemont is threading the needle. Swatch is still holding the line.
For the article in the WSJ mentioned above, please check it out here
Why One Investor Couldn't Crack the Swatch Case