Victorinox almost back to pre-corona sales level
Published: Tuesday, Dec 12th 2023, 10:10
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Victorinox is benefiting from the recovery in tourism: the manufacturer of the Swiss Army Knife has now almost returned to its pre-pandemic sales level. The company now wants to further expand its watch division in 2024.
"With the sale of our products, we expect revenue of CHF 429 million this year," CEO Carl Elsener told the news agency AWP during a visit to the headquarters in Ibach. This is a slight improvement on the 426 million in 2022.
In addition, Victorinox now also generates income from repair work and licenses for certain Wenger brand products, which are not included in this amount, he says. Elsener is the fourth generation to manage the family business, which was founded in 1884 and has production facilities in Ibach and Delsberg.
New start in the USA
The Group was hit hard by the pandemic in 2020. The flow of tourists dried up and the stores were closed. Like many other companies, Victorinox had to draw on reserves and introduce short-time working.
The crisis now seems to be over: "All markets grew this year with the exception of our main sales market, the USA," explains Elsener. The weak development there is due to the ongoing repositioning activities. The Group is closing its less profitable sales outlets and buying up some of its stock.
"In the past, quantity was sometimes more important than quality; we are now correcting that," says the Victorinox CEO, who has been in office since 2007. The relaunch in the USA is to take place in the next two to three years. Until then, the sales network will be further reduced. It currently comprises more than 20,000 stores, mainly operated by independent dealers.
Lower margins
The bag knife manufacturer was able to turn the tide in terms of revenue after the pandemic. However, margins are not yet as high as before. This is partly because inflation and the strong appreciation of the Swiss franc are weighing on profitability. "But our margins are healthy and sustainable," assures the 60-year-old.
Around 135,000 knives, including kitchen knives, leave the factory every day. Annual production is a good 30 million units. The knife range accounts for around 70 percent of the Group's revenue. The rest is generated with luggage, watches and perfumes.
More watches
The watches manufactured in Delsberg, Jura, now account for around 10 percent of total sales. Elsener admits that the company has suffered from competition from smartwatches in recent years. However, thanks to a change in strategy, the business is gradually recovering: "We have revised our collections and given our watches their own design. Sales are developing positively again."
Victorinox expects this to have the greatest positive impact in the USA in two to three years. But Latin America is also already experiencing good growth, thanks in part to solid demand in Mexico and Brazil. However, China remains a difficult market. "It's pocket knives and luggage that are doing well there," he says.
Despite the current challenges, Elsener is positive about 2024. Victorinox, with its more than 2100 employees, is set to grow further. "We will focus on the USA, Switzerland and Germany," summarizes the CEO. On the product side, in addition to pocket knives, the company will continue to focus on expanding the watch segment.
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