Victorinox, the renowned Swiss Army Knife maker, is adapting its strategies to mitigate the effects of increased U.S. tariffs. Facing a 39% tariff imposed by the U.S. government in August, Victorinox is working to maintain its market presence while exploring new international opportunities.
Increasing U.S. Inventory to Offset Tariffs
To combat rising costs, Victorinox has ramped up its inventory in the United States. The company shipped two additional 40-foot containers, containing approximately 200,000 Swiss Army Knives and an equal number of kitchen and commercial knives, earlier this year. This inventory boost is expected to sustain U.S. operations through much of 2026, allowing Victorinox to keep its prices stable.
Financial Impact of Tariffs
- Victorinox CEO Carl Elsener has warned that tariffs could lead to a $13 million annual loss.
- The U.S. market represents around 13% of the company’s total sales, which reached 417 million Swiss francs (approximately $519 million) in 2024.
- A recent survey indicated that 45% of Swiss manufacturing firms reported declining orders due to these tariffs.
Operational Adjustments
To further reduce its operational costs, Victorinox is implementing efficiency programs at its Swiss facilities. The company is considering limited end-of-line operations, such as polishing and packaging in the U.S., which may help decrease duties upon import.
Exploring New Markets
Seeking to lessen its reliance on the American market, Victorinox is planning to expand into Latin America and Asia. Elsener stated, “We are trying to reduce our dependence on the U.S. market.” This strategic shift is part of the broader effort to hedge against trade challenges and tariffs.
The Importance of Swiss Heritage
Despite contemplating shifts in production, Elsener emphasized that outsourcing the manufacturing of Swiss Army Knives is not viable. To qualify for the Swiss-made label, 60% of manufacturing costs must be incurred in Switzerland. The brand’s heritage remains a vital component of its identity.
Looking Ahead
Despite challenging circumstances, including previous economic crises, Elsener remains optimistic. He stated, “This is just the latest challenging situation, which I’m confident we can overcome.” As Victorinox continues to navigate the impact of tariffs and changing market dynamics, its commitment to maintaining quality and heritage remains steadfast.
