When you export products and your local currency goes up – your sales and profits go down. With the rise of the Swiss Franc, that’s the situation facing Victorinox, maker of the original Swiss Army Knife (SAK).
Overall, our margin has been reduced considerably in the first quarter compared to last year,” Victorinox CEO Carl Elsener told the Swiss newspaper Handelzeitung.
“We need at least three to four years, until we achieve again a margin that allows a healthy, sustainable development,” said the executive who carries a Victorinox Traveller according to the company.
While other knife makers have outsourced manufacturing to low cost regions like China and Taiwan, the company continues to make its Victorinox SAKs in Ibach, Switzerland where they began manufacturing the knives for the Swiss Army in 1891.
In June, the company increased prices by 5 to 10 percent in the euro zone. U.S. Victorinox Swiss Army Knife buyers could face a similar drain on their wallets if the Franc continues to climb – the currency is up 6.7% versus the U.S. Dollar since this time last year.
Victorinox points to the Swiss National Bank’s decision in January to scrap the Euro Peg – a measure which kept the currency artificially weak.