🧠 Mechanical genius

There are marketers who spend their whole lives trying to figure out how to sell more.
Swiss watchmakers found something better: sell half as much, earn three times more.

Between 2000 and 2024, exports fell from 30 million watches to 15 million.
But value exploded from CHF 10 billion to CHF 25 billion. Creative capitalism at its finest.

While the French luxury industry praises itself for handbags and silk scarves, the Swiss turned precision mechanics into cult objects. Rolex climbed from CHF 2.8 to 10 billion in revenue, Audemars Piguet multiplied sales by six, and Richard Mille went from zero in 2001 to CHF 1.5 billion today. The art of creating artificial scarcity while producing at scale. Respect.

The real stroke of genius was understanding before anyone else that a watch was no longer a tool, but a totem. Jean-Claude Biver took over Blancpain, a forgotten brand, invented a story, limited production, raised prices — and boom: the model was born.
High-end watchmakers in the 90s simply copied the recipe.

Add an unnecessary mechanical complication. Tell a beautiful story about centuries-old heritage (even if the brand is three years old). Produce 500 pieces instead of 5,000. Multiply the price by ten.

Newly rich Chinese loved it, Americans followed, Europeans joined in.
Swatch turned the watch into a fashion accessory in the 1980s.
Thirty years later, it became a financial asset. Some buy Patek Philippe like others buy gold bars. Except the gold bar doesn’t go up 30% a year.

But of course, there are losers in this luxury race. Swatch Group, the Biel-based giant that saved Swiss watchmaking in the 1980s, now finds itself behind. Revenue stuck around CHF 6–7 billion since 2010, while the market doubled.

The Hayek family, which owns the group, is clinging to its industrial model like a captain to a ship taking on water. Breguet, their prestige brand meant to rival the greats? Sales fell from CHF 720 million to 165 million in ten years. A spectacular plunge.

This is what historian Pierre-Yves Donzé calls “family capitalism.”
Translation: when the father succeeded with one formula, the son struggles to change course when the wind shifts.

The delicious paradox is that Switzerland managed to turn its industrial weakness into commercial strength. Instead of competing with China on volume or Japan on technology, it created its own playing field: useless but indispensable mechanical luxury.

Apple can have smartwatches. The Swiss sell dreams for CHF 50,000, with complications nobody uses and movements nobody sees. And it works. The wealthy of the world line up for a Rolex they cannot even buy in-store. The waiting list is part of the product. That is the Swiss genius: understanding that in luxury, frustration is a selling point.

While other industries fight to satisfy customers, Swiss watchmaking invented the business model where the less you sell, the more you make. And some people still think the Swiss lack imagination.

Have a great week,
M. Hantale 🧀

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When the Swiss Franc Misbehaves — Does the SNB Bring Out the Heavy Artillery?

The Swiss franc has just pulled another one of its currency mood swings. After flirting with €0.92 — a level we hadn’t seen since the shock of 2015 and the end of the minimum exchange rate — the national currency suddenly eased again. Enough to spark whispers in Zurich boardrooms: did the Swiss National Bank quietly step in to calm the franc’s enthusiasm? It’s the question traders are circling, and it’s not as trivial as it looks.

Because behind these seemingly small movements lies something more complex. The Swiss franc is the financial world’s equivalent of a nuclear shelter: whenever there’s smoke — US–China tensions, French political melodramas, US regional banks wobbling after the First Brands collapse — investors rush into it. The result is automatic appreciation, much to the frustration of Swiss exporters whose margins melt away like snow in the sun. A very Swiss paradox: the worse the world gets, the stronger our currency becomes — and the more our companies suffer.

The SNB, for its part, is balancing on an increasingly tight rope. With the policy rate already at zero, its traditional room for maneuver has shrunk to almost nothing. Martin Schlegel, the head of the central bank, has repeated it clearly: no return to negative rates without very careful consideration. That policy, with its collateral damage to savings and pension funds, remains a painful memory. So what’s left? Interventions in the foreign exchange market remain the most pragmatic tool, even though the SNB keeps its operations deliberately opaque — it only reports purchases and sales with a three-month delay, so as not to show its hand too early.

UBS analysts have identified five signals that could push the SNB to act: a franc appreciating too quickly, a genuine overvaluation, market stress perception, deflation risk, and constraints tied to interest rates. A checklist that looks uncomfortably close to current conditions. Yet instead of worrying, analysts expect a gradual weakening of the franc over the next twelve months, forecasting EUR/CHF around 0.94. Their argument: the rate differential between Switzerland and the eurozone, combined with a potential recovery in Germany.

Caught between Swiss pragmatism and market volatility, the franc continues its three-step dance with the euro and the dollar. The SNB remains in the background, ready to intervene if necessary — but without ever admitting it. A strategy that maintains uncertainty among speculators — and nothing deters one-way bets more effectively than a bit of ambiguity. In this monetary theater, Switzerland plays its role with characteristic discretion, far from the performative communications of central banks that loudly telegraph their intentions. It’s an approach that has worked reasonably well so far — though at the cost of that eternal tension between internal stability and external competitiveness.

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