(No) Hard Times for Hardware
Bucherer's big (new) bet in the US - and a surprise at Logitech.
Dear Insider,
It’s hard to know if we are living in hard times.
Interest rates go up. Wars continue. And the music plays on…
“Hard times” may be relative, of course - and it may have a totally different meaning as well.
While software has been “eating the world” for the last 20 years - hardware (like iPhones and EVs) have done not too badly.
Switzerland has always been a manufacturing nation. Maybe that will help it avoid the “hard times” that befall other nations with economies less focused on hardware businesses.
👍🏻 Feel free to share this edition of The Swiss Insider!
Quick hits:
👉🏻 Legend exit right
In a surprise move, Logitech CEO Bracken Darrell has resigned from the Swiss computer and electronics hardware maker with immediate effect. Darrell, who has been leading the company since 2013, will be replaced temporarily by the current chairman of the board, Guerrino De Luca and will go on to pursue “other opportunities.” The reason behind Darrell's sudden departure is not mentioned in the summary.
🕛 Rounding up
There is only one way to go for legendary watch seller Bucherer - up. The company is doing just that with the opening of its “Time Dome” store in the MegaMall in Las Vegas’s Caesar’s Palace. The store is over 2’000 sq metres in size - as is befitting the largest watch business in the USA.
🔁 Changing of the guard
The deed is done. Credit Suisse as a separate entity has officially been removed from the stock market. And with the disappearing act, come a raft of personnel changes at the new, combined UBS entity. Lukas Gähwiler will take over as the chairman of the CS entity. Surprisingly, CS Head of Wealth Management Francesco de Ferrari will not have a permanent place in the bank - but will stay on to “advise” an old colleague Iqbal Khan at UBS.
💡The Point:
👉 Logitech was a juggernaut under Bracken Darrell. A dynamic speaker and powerful leader, he pushed Logitech to record numbers - in 2021, Logitech sales jumped by 76%, with Q4 revenue doubling. In 2022, the company achieved its highest-ever sales at $5.48 billion.
But - something had to change. Rumors will fly about potential problems under the surface. The full story remains to be seen.
What is clear is that Darrell helped to firmly establish a Swiss company in the consumer electronics space - no easy feat given the global competition in the space.
Whether Logitech will now fall on “hard times” after his departure remains to be seen.
👉 Bucherer is also a juggernaut. Its new, lavish store in Las Vegas points once again to the power of its brand and the appeal of the US market, where the Luzern company is firmly entrenched at the top spot.
But it also highlights a strong (continued) trend - luxury “hardware” brands manage to stand out in an increasingly virtual world. While France has LVMH, Switzerland has Bucherer - among others.
Luxury hardware brands like Bucherer still manage to stand out in an increasingly digital and virtual world.
👉 Changes under the new regime at UBS were always inevitable. But they give hints about the future of the giant bank that has now arisen. UBS CEO Sergio Ermotti has set so-called “red lines” for banker behaviour. The war to retain talent on lower levels of the two banks turns into a war to gain the upper hand - and survive - at the upper echelons of power.
Clearly UBS Chairman Colm Kelleher is aiming to retain the strength and safety of the UBS wealth management brand - perhaps while trying to skim the cream off the top of the Credit Suisse mob that he has inherited.
His success will be that of Switzerland too.
💡The Insider Angle:
Hardware manufacturing and banking are two vastly different businesses - and Switzerland is known for both. Both Logitech and Bucherer are strong testaments to the strength of the quality premium that Switzerland enjoys - and has taken full advantage of.
Where the two companies also overlap is their strong footprint in the US. Despite their Swiss roots, neither one (and especially Logitech) played “the Swiss card” exclusively. In this sense, they relied on a clear understanding of their market and current trends - whether in watches and jewellery or in computing - to position themselves at the top.
UBS has also had great American dreams - and fell hard because of them in 2008.
With its takeover of Credit Susse, the new bank may not need to think so “expansionary” for some time: the new assets and clients it gets out of the deal will boost it anyway.
But banks will increasingly find that they need to think like hardware companies - where the “moving parts of the system” are not machines…but people.
And that is “hard”….
We would love to hear your thoughts…!
➕The Bonus:
🎤 Yodeling along - The annual Swiss yodeling festival will be held this weekend in Zug. That means that a good number of foreigners will test their lungs in the traditional Swiss way…. (Link)
🪙 Doing it digitally - As part of a joint project under the Swiss Bankers Association - including InCore Bank, Julius Baer, PostFinance, Sygnum, UBS, Vontobel - are exploring a digital Swiss franc. (Link)
👩🏻🎤 Diversification- Board members for Swiss companies are in high demand - and are ever more diverse and foreign - like nowhere else in Europe. (Link)