FIRE AT SWATCH WORKSHOP CAUSES DELAYS

c.2013 New York Times News Service

MADRID — The Swatch Group, the world’s largest watchmaker, said Monday that production of some watch components would be delayed for as long as two months after a fire destroyed one of its Swiss workshops.

Nick Hayek, the company’s chief executive, said that the damage was limited and that the delay would have more of an impact on watchmakers that buy components from his company than on retailers. Hayek estimated that the overall cost of the fire, including production delays, would be about 20 million to 25 million Swiss francs, or $23 million to $28 million, part of which was likely to be recouped once production returned to normal.

The fire broke out Sunday and swept through a workshop at a factory in Grenchen, in northwestern Switzerland, that galvanizes metal components to protect them from rust. Another workshop sustained some damage. The factory is operated by ETA, a Swatch subsidiary. It was closed Sunday, and nobody was hurt.

Swatch is best known for its extended portfolio of watch brands, including Omega, Tissot and Longines and its playful plastic watches. But Swatch also produces more than half of the watch movements made in Switzerland and sells them and other parts through ETA and other subsidiaries to makers of some of the world’s most expensive timepieces.

“Such a fire is very rare, but when you have over 150 factories, you know that you can also have flooding and all sorts of accidents,” Hayek said by telephone.

The Swiss police are investigating the fire, but Hayek suggested that the most likely explanation was “a technical issue with a machine.”

Hayek said the fire had created “a big bottleneck” for galvanizing but added that he was confident that delayed orders could be handled by other workshops within the Swatch group.