It’s not often that I cover watch industry or general news about the country that I’ve called home since I was thirteen years old, but this is definitely an event that will have major repercussions on the watch industry and Switzerland as a whole.
No one saw it coming. Yesterday, the Swiss National Bank (SNB) announced that it would lift the cap of 1.20 Swiss Francs against the Euro, which had originally been put in place in 2011 to prevent the Swiss Franc rising too high against the Euro. Essentially, the SNB decided that it no longer needed to keep buying euros just to keep Swiss franc down, especially while the Euro is weakening against the dollar.
The problem is, exporters are the first to get hurt by a strengthening local currency, and such exports are a cornerstone of the Swiss economy. This means that the stronger the Swiss franc, the more expensive products become for overseas buyers, resulting in lower demand and, well, you can figure out the rest. In any case, the short-term outcome looks turbulent, to say the least.
While several industry figures such as Swatch Group’s Nick Hayek and LVMH’s Jean-Claude Biver have expressed their shock and disappointment with the SNB’s decision, none in my opinion have hit the mark like Edouard Meylan, CEO of the family-owned and independent watchmaker H. Moser & Cie (we interviewed Edouard during Baselworld 2014), who published a sarcastically candid open letter to the President of the Swiss National Bank the night of the announcement.
I wanted to personally and publicly thank you, regarding your dramatic move releasing the minimum Swiss Franc exchange rate of 1.20 to the Euro.When I woke up that morning I had a strange feeling. As I checked the news, I wondered, “What am I going to do today?” aside from our usual business in January. There was no new conflict, no big news about emerging markets slowing down, and thank goodness, no new terror attack.
I am an entrepreneur, and I own a small watch manufacture called H. Moser & Cie, based in Schaffhausen, Switzerland. Very Rare is our tagline at H. Moser & Cie. Very Rare, because we produce 1,000 watches, we are entrepreneurs in an independent, family-owned business that employs 55 people, and because we are a manufacture in the true sense of the word, developing and producing our own ingenious watches.
As an entrepreneur in a small Swiss company, I like a challenge; whether it’s the pressure from the big luxury groups in supply or distribution. Or, a fight to do more with small budgets against the avalanche of big advertising and marketing. Well, today, Mr. President, your dramatic move helped step it up a notch: over 95% of our watches are sold to people outside of Switzerland, and the first retailers called the same day to cancel orders.
So this morning at 10:38 when my CFO sent me an email titled “Breaking News”, I thought “aha, finally something to do”. Something that forces me to find smart solutions to continue our growth and improving profitability and to ensure continuity for H. Moser & Cie. and the jobs for 55 people working for me.In fact, one thought crossed my mind: why not just move 2 kilometres into Germany and continue business as usual in the EU? I’ll even beat that other restriction on permits for workers from the EU that came up in February 2014 – around 20% of my employees are German.
Let me make my appeal clear to you, on behalf of the many small and mid-size businesses that employ so many Swiss people: I trust you have a strong plan that will help all of us make it through with you over the long term. Because otherwise, along with many other wonderful Swiss creations, H. Moser watches may just have become very, very, very rare.
Sincerely,
Edouard Meylan
CEO of H. Moser & Cie.
