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The Swatch Group

In: Business and Management

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CLIENT PROFILE

The Swatch Group is an international group active in the manufacture and sale of finished watches, jewelry, watch movements and components. Swatch supplies nearly all components required by its nineteen watch brands, and Swatch companies supply movements and components to third-party watchmakers in Switzerland and around the world. Swatch Group is also a key player in the manufacture and sale of electronic systems used in watchmaking and other industries. Swatch employs more than 24 000 people in over 50 countries.

THE CHALLENGE

Swatch engaged the services of Real Facilities to evaluate its Greater Toronto Area real estate holdings, distribution network and repair facility in an attempt to manage its growing real estate costs. With two years remaining prior to expiry, the key challenge was to secure a long-term position in the market while simultaneously providing an exit strategy to accommodate changing business needs.

REAL FACILITIES' RESPONSE

Real Facilities took a very strategic approach to this requirement. A thorough analysis of Swatch's existing lease was completed together with indepth explorations of its operations and ongoing business strategy. Multiple scenarios were developed, including a potential relocation of operations to a new facility. Only at the appropriate time did Real Facilities engage in discussions with Swatch's existing landlord where the opportunity was presented to continue a long-term real estate relationship with flexibility built into the agreement.

THE SOLUTION

The strategy was successful. Real Facilities secured a five-year extension at below-market rates. Further Swatch obtained a termination provision that ensured flexibility with ongoing business strategies and

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