The Swiss industry, already hard hit by the larger-than-life Swiss franc compared with the euro at the wholesale and retail levels, has begun to count casualties in the domestic production apparatus.
Christian Eschler AG, the Swiss manufacturer of high-performance fibers and fabrics, has decided to shut down its own plant in Bühler in the canton of Appenzell as well as the one in Münchwilen, Thurgau. Some 75 employees will be affected by the strategic decision. Instead, Eschler wants to create centers of excellence at locations dedicated to high-end research and development, employing around 15 people.
The decision came along with an intense review of Eschler's portfolio of products. In the future, the company intends to focus on niche products in the sectors of sports, work wear, lingerie and technical textiles. Eschler is dropping activities in which it no longer feels competitive, notably in regard to low-price vendors from the Far East, particularly in the field of circular knits.
According to Philip Schär, currently the company's sales and marketing director, Eschler still produces 70 percent of its goods by value in the Swiss plants mentioned above, while the rest is processed at Eschler's subsidiary in Germany and through a joint venture in Thailand. Schär specified that some 60 percent of the current Swiss production will be shifted to the German branch, while the rest will go to Thailand, enjoying the proximity of the plant to the brands that finalize their gear in East Asia.
We have already reported in The Compass about the price cuts implemented by various Swiss retailers to help offset the higher value of the euro. Their action culminated last week in the launch of a massive nationwide communication campaign, telling Swiss people that they should buy their products in Swiss stores. The aim is to discourage them from buying sporting goods on the internet because of price considerations or in stores across the border because of the recent strong appreciation of the Swiss franc.
The campaign, which has a budget of almost 1 million Swiss francs (€815,000-$1.1m), reached its climax last Thursday, at the start of the crucial Christmas selling season, with the launch of dedicated websites in German and French under www.hier-gekauft.ch and www.achete-ici.ch. Besides listing the arguments in favor of shopping in Switzerland, they invite customers to participate in various contests until Feb. 29 by visiting any of the 600-odd Swiss retailers participating in the program. They can win vouchers or special sports experiences with champions in the areas of running, cycling, climbing and skiing.
Adidas, Amer Sports, Catrade, Chris Sports, Intersport, Lowa, Nike, Swissski and WS4Sports are cited as co-sponsors of the campaign along with the two trade associations of suppliers and retailers of sporting goods, Asmas and Spaf, which are working on a possible merger (more in SGI Europe).