Red Cross

by Ken Kessler

This is not the place to get all political, nor to discuss cultural imperialism, the “McDonald’s Effect” or anything else that distances the United States from Europe. However, we should give credit its due. So here’s something for which we Yanks can take genuine credit: Victorinox Swiss Army’s entry and growth in the watch, luggage, and sports-apparel sectors were U.S.-inspired.

Stop and think about that for a bit. International Watch regulars know, by reading between the lines, that the Swiss aren’t exactly suggestible, easily influenced or generally receptive to outsiders. If ever a nation prides itself in going it alone, it’s the Helvetians. But Victorinox Swiss Army—even with that proud, nationalistic name—has been growing increasingly savvy over the past decade: more commercially aware, more pragmatic.

Above all, the firm has a deep appreciation of what its name stands for, based on the iconic nature of their ubiquitous multifunction knives. So you can imagine what a wrench it must have been to diversify. Even more admirable is that they were prepared to look to their largest market for inspiration. And every single one of the three newer categories adds to the core knife line, and each has successfully augmented the cutlery.

So let’s start with a real shocker: one out of every five Swiss watches sold in the USA—still the largest market in the world—is made by Victorinox. That’s right: twenty percent of America’s entire Swiss watch consumption. As a result of this phenomenal success—which is quite recent in terms of the company’s span—Victorinox is now the third largest exporter of Swiss watches, after Swatch and Tissot.

Not that Victorinox was a small concern before adding three all-new, non-slicing/dicing/stabbing product lines. The company sells twenty-five million knives a year. I was told—and it’s probably not apocryphal—that everyone in Switzerland has at least seven. (Am I an honorary Swiss because I have ten?) Still owned by the founding family, still based in a less-than-readily-accessible part of a country that’s not well known for straight roads, Victorinox can also boast that during its nearly 125-year history, not one single employee has been laid off because of a recession or a sales downturn.

It may be massive, but Victorinox is still run in a non-corporate, warm’n’fuzzy manner. The employees are happy, casual, and genuinely proud of the company.

But even a company with a product everyone admires and uses can suffer from unforeseen, external forces. As the previous CEO, Sue Rechner, told me in early 2006, the atrocity of September 11, 2001, caused “… a decline of approximately 30 percent. A major portion of the decline was attributed to the changes in airline policy which significantly affected the duty-free business behind security gates.”

And as Victorinox learned, travelers who lost their knives at the security inspection rarely replaced them.

Such a blow might have proven fatal to a company built on the manufacture of knives. But the legendary “pocket tools” are only part of the story: in cutlery alone, Victorinox produces over 300 models, including professional catering cutlery, tableware and other products not carried in passengers’ hand luggage. As of 2007, the pocket knives had recovered half of their lost sales.

Apparel and luggage

Despite that tragic and unfortunate hiccup, Victorinox has gone from strength to strength, not least because of those U.S.-inspired watch, apparel and luggage divisions. And should cynics suggest that there was any sense of desperation in adding those new lines, both the watches and the luggage were launched before 9/11.

Until recently, the new ranges were primarily a North American phenomenon. Stateside, they enjoyed immediate success, growing 20 percent annually since 1989, so the watch division was, until 2003, almost entirely U.S.-centric because of the sheer scale of the demand. Swiss Army watches could be found the wrists of Bill Clinton, “The X Files’” Fox Mulder, and other high-profile real and fictional figures. So Victorinox rightly concentrated on the American market.