NEWSMAKER-Swatch Group CEO must now go it alone

* Swatch Group Chairman Nicolas Hayek died suddenly on Mon

* Son Nick Hayek seen as likely successor as group chairman

* Grandson Marc Hayek could eventually take over as CEO

By Silke Koltrowitz and Katie Reid

ZURICH, June 29 (Reuters) - Swatch Group (UHR.VX) Chief Executive Nick Hayek must fly the world's largest watchmaking group solo after the sudden death of his father, company founder and chairman Nicolas Hayek, on Monday.

Hayek Snr, known as Mr Swatch after he launched the colourful, plastic Swatch watches that helped save Swiss watchmaking, built the company up through a series of mergers with traditional Swiss watch brands before handing the CEO position to his son in 2003. [ID:nLDE65R26V]

Hayek Snr stayed on as chairman and head of top-end watch brand Breguet, but he pulled back from the day-to-day business and it was Hayek Jnr, a helicopter pilot, who navigated the group through one of the industry's sharpest ever downturns.

Swatch Group, which is controlled by the Hayek family, has not yet said what the succession plans are, but a spokeswoman for the company said Hayek Snr had put management plans in place. Hayek Jnr is widely expected to act as chairman and CEO.

Swiss magazine Bilanz reported on Tuesday that Hayek Jnr would be named as chairman, alongside his role as CEO, at a board meeting on Wednesday, citing board member and shareholder, Esther Grether.

The Swatch Group spokeswoman denied the report. And the company declined to give any personal details about Hayek Jnr.

Vontobel analyst Rene Weber said: "Nick Hayek has mastered a major crisis and still managed to improve margins between 2003 and 2010. Everything looks better than before."

Hayek Jnr, 56, started out as a filmmaker and launched his own production company in Paris in the mid-1980s. He made documentaries for Swiss television as well as several short films before moving to Swatch Group in 1994 as marketing manager for Swatch Ltd.

He quashed critics' concerns about his abilities to lead the group by chalking up strong margins and boosting the company's position in growth regions such as Asia over the last seven years.

"There was a lot of scepticism before he became CEO. Many people just saw him as a guy who was in the film industry. But he has done a lot better than expected and has surpassed expectations," Weber said.

Most analysts expect Hayek Jnr's nephew, Marc Hayek, 39, head of the Blancpain brand, to ultimately take up the role of CEO.

Swatch Group, which is behind top-end brands such as Blancpain, Omega, Longines and Tissot, is aiming for record sales this year as consumers treat themselves after months of austerity during the worst economic downturn in decades.

VISIONARY

Hayek Snr saved the Swiss watch industry from the threat of cheaper Asian quartz watches in the 1980s by bringing out the inexpensive Swatch watch and introducing consumers to the concept of having more than one watch -- the Hayeks usually sported at least four watches on their wrists.

"Nicolas Hayek was a living legend and his are very big boots to fill," said Kepler Capital Markets analyst Jon Cox.

"Some of the concern you are seeing on the shares is probably due to the feeling that there is now a big hole in Swatch Group," he said, adding he has confidence in the group.

"Nick Hayek has been in control and he's a very capable leader," Cox said.

Shares in the group came under pressure on Tuesday as markets digested the news that Hayek Snr, who was seen as a strong asset for the group, had died from heart failure at the age of 82.

Hayek Jnr may not have the same entrepreneurial background as his father, who founded his first company in 1963 and was asked by Swiss banks to save the dying Swiss watch industry, but analysts think Hayek Jnr has what it takes to keep the Swatch Group in pole position.

"Of course his dad helped him to have a very good start as Swatch Group was already going in the right direction. But Hayek Jnr has what is required to continue this success. The group does not need the same visions anymore. Hayek Jnr is the right guy," Vontobel's Weber said.

ASIAN TIGER

Swatch Group's strong position in Asia, where its Omega marque is the No.1 brand, helped cushion the impact of the slump in demand for timepieces and meant the group easily outperformed the rest of the industry in 2009.

Citi analyst Thomas Chauvet said the group is ready to benefit from the strong demand in Asia and the Middle East.

"Additionally, we see Swatch Group's broad brand portfolio, strong industrial heritage and solid balance sheet as key competitive advantages," he said.

Swatch Group generated 44 percent of its 2009 net sales in Asia, with Greater China accounting for 28 percent of sales. Events like the Beijing Olympics, which used Omega as the official timekeeper, have helped to win more customers in the booming region.

"Nick Hayek spearheaded the move into China, which is now absolutely fantastic," said Kepler Capital Markets' Cox. (Editing by Sharon Lindores)