Swiss Franc Is Biggest Problem Says Swatch Chairwoman -Report

The rising value of the Swiss franc is the biggest problem facing Swiss watchmaker Swatch Group AG (UHR.VX), company chairwoman Nayla Hayek said in an interview with Swiss newspaper Tagesanzeiger published Friday.

The franc has risen from 0.75585 against the euro in early April to 0.845308 this week as investors flock to the currency's safe haven status amid fears of a Greek default

Ms Hayek said not enough has been done to curb the currency's value.

"In Switzerland many people are sitting in a frozen state. No one reacts, no one does anything, it's like a numbness," she said. "We work, we achieve wonderful results and then the Swiss franc eats it."

Hayek's comments mirror remarks by her brother Swatch Chief Executive Nick Hayek in a newspaper interview earlier this month, who said Swatch sales are down between CHF50 million and CHF60 million a month because of the strong franc.

Ms Hayek told the paper she "didn't know" if her son Marc Hayek, who is on the company's management board and leads the Breguet and Blancpain brands, would want to succeed her brother as CEO.

She also said Swatch's discussions with the Swiss antitrust regulator to end its obligation to supply its Swiss-made watch components globally was not designed to hurt rivals.

Swatch would "definitely not" base its decision to stop supplying a watchmaker on whether they competed with its brands, Ms Hayek said.

The company was happy to deliver to serious watchmakers "with factories" she said.

"What we don't want any more are partners who in a crisis cancel their entire order and endanger jobs and then come back later and ask why the requested product cannot be delivered," said Ms Hayek.

Newspaper website: www.tagesanzeiger.ch

-By John Revill, Dow Jones Newswires; [phone] ; [e-mail]