June 6, 2011 / 3:57 PM / 6 years ago

Victorinox gives Swiss army knife a new Asian edge

4 Min Read

Zurich (Reuters) - A Swiss army knife is still a must-have souvenir for any tourist returning from the Alps, but soon it will soon come with an new Asian twist.

In July, manufacturer Victorinox, will launch a new multipurpose model reinterpreted by Japanese designer Kazuma Yamaguchi, who has produced a square version of the traditionally slightly oval-shaped red knife.

Dubbed Tomo, the Japanese word for 'friends', this new model on offer in bright colors from Capri blue to Lemon yellow, will target fashion-conscious customers and will be sold in places like the Museum of Modern Arts in New York.

This is not the first transformation for the Swiss army knife, which comes in 350 versions costing between 9 and 422 Swiss francs.

"Innovation has always been a key feature of the Swiss army knife," said CEO Carl Elsener Jr. in an interview with Reuters at the company's headquarters in Ibach, a small rural town a stone's throw from the shores of Lake Lucerne.

Two years ago, Victorinox launched a new model equipped with a USB flash drive, which allows owners to encrypt data with a password and a biometric fingerprint sensor with temperature control.

This 21st century model even allows you to automatically destroy data in case of security breaches -- a feature that would appeal to a secret agent or a 2.0 version of MacGyver, the TV character who never parted with his pocket companion in the action series broadcast on ABC between 1985 and 1992.

Victorinox regularly put its reliability to the test by inviting hackers to its flagship stores, offering a large cash reward to anyone who could break its security system.

"But so far, no-one has prevailed," pointed out Urs Wyss, the company's spokesperson.

Competitive Edge

Founded in 1884 by Karl Elsener, Victorinox originally produced knives that did not differ much from competitors.

It nearly went bust the first time it worked with the Swiss army after a German competitor offered cheaper products just as Victorinox was about to deliver its first batch of knives.

The competitive edge for Victorinox came in 1897 when Elsener introduced a new type of spring which enabled the knife to include more functions, such as a pair of scissors, a toothpick and a corkscrew.

After World War II, Victorinox' knives gained popularity in the U.S. when U.S. soldiers posted in Europe started to buy them at their local army stores.

Back then, the Swiss army knife benefited from an attractive exchange rate, of an average 4.30 Swiss francs per dollar, making it an affordable present to take home to family and friends.

Today the greenback trades at around 0.8360 per franc.

"I wish we had such an attractive exchange rate today," said Carl Elsener Jr, who nonetheless stressed that the strength of the Swiss franc currently hurts margins rather than sales.

Large groups of Chinese tourists, who flock Lucerne, the country's most visited city, are nonetheless snapping up Victorinox products.

The family-owned company, which generated a turnover of 500 million Swiss francs last year, exports 80 percent of its products, while half of its sales in Switzerland are to tourists.

When the Swiss franc is peaking, the Swiss army knife is seen as an inexpensive alternative to the products traditionally purchased in Switzerland, like watches, especially as Asian tourists like to bring back gifts when traveling to Europe, Elsener pointed out.

"They can still buy a box of ten Swiss army knives to bring back home and spend less than a hundred francs," Elsener said.

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