Bernina Holding AG

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Bernina Holding AG

Seestrasse
Steckborn
CH-8266
Switzerland
Telephone: +41-52 762 11 11
Fax: +41-52 762 16 11
Web site: http:/www-bernina.com

Private Company
Founded: 1893
Employees: 887
Sales: $154.5 million (2000)
NAIC: 335228 Other Major Household Appliance Manufacturing

Bernina Holding AG is the parent company of Fritz Gegauf AG, one of the world’s five largest sewing machine manufacturers. Headquartered in Steckborn, Switzerland, the company has won a reputation for top-of-the-line sewing machines under the Bernina brand name. Bernina’s daughter companies include distributors in the United States, Western Europe, Scandinavia, Asia, Australia, and New Zealand. In addition, a worldwide network of close to 70 independent distributors brings Bernina machines to locations across South America, Eastern Europe, Southeast Asia, and the Middle East. Altogether, the company sells about 100,000 sewing, serger, and embroidering machines yearly, as well as machine accessories, software, and patterns. Bernina prides itself on machines that are known for durability and precision, and the company’s market share is particularly strong in the high-end sector, with versatile, technologically advanced machines that usually cost more than twice as much as the average machine. Education is a central aspect of Bernina’s customer relations strategy. The company offers its dealers regular training seminars and promotes a long-lasting educational relationship with its customers, whether through Internet tutorials or through classes offered at Bernina dealerships. Technology is another hallmark of the company’s product line. The newest Bernina machines are highly computerized, operated in large part through a touch screen interface. Bernina’s customers can take advantage of such features as digitalized patterns and custom pattern selection software. The company has been privately held throughout its 110-year history and is now headed by Hanspeter Ueltschi, great-grandson of the company founder.

The Gegauf Hemstitching and “Fitz” Machines: 1893–1932

The great-grandfather of Bernina sewing machines, Karl Friedrich Gegauf, moved to Steckborn, Switzerland, in 1890. There, in the Feldbach Convent, he established an embroidery shop and a mechanical workshop for the production of a monogram embroidering machine. Ten mechanics were employed in the machine workshop, while the embroidery shop served both to provide a steady income to the business and as a laboratory for trying out new inventions. Gegauf’s goal was to develop a machine that could do hemstitching, which was performed by hand at the time.

Gegauf achieved his goal two years later when he obtained a patent for the world’s first hemstitch sewing machine. In 1893 he set up a workshop in the Feldbach Convent for the production of hemstitching machines, which would remain the business’s main product for more than 30 years. When a fire destroyed the convent in 1895, a prototype of the hemstitch machine was saved and new, more spacious workshops were established in a bam. Both hemstitch and embroidery machines were produced there.

The hemstitch machine soon garnered widespread attention, and “gegaufen” became a commonly used term for the mechanical production of hemstitching. By 1900, more than 70 people were employed in the Steckbom workshop. Karl Friedrich acted as technical director, while his brother Georg tended to the commercial side of the business. The workshop prospered until the advent of World War I put a brake on the young company’s progress. During the war, exports to foreign countries were forbidden, and the Gegauf works had to turn to the manufacture of other items, such as tin-openers, to survive this period. Adding to the hardship, Georg Gegauf died in an accident in 1917.

Karl Friedrich persevered on his own, establishing new workshops in the so-called “Neue Schloss,” while his late brother’s family oversaw operations in the “Gruene Haus.” Karl Friedrich’s son Fritz received a patent for a new hemstitch machine in 1919. After the war, old connections were reestablished and the business was back on solid ground for a time. But a new artificial silk factory, started in 1923 on the site of the Feldbach Convent, threatened the prosperity of the Gegauf business, since silk was ill suited for hemstitching. At first, however, Karl Friedrich found a way to turn the new factory to his advantage. On a tour of the silk production facility, he noted that the method used to tie thread up into skeins before dying was inefficient. He came up with a machine that could perform this task, known as “fitzen,” mechanically. Karl Friedrich’s death in December 1926, however, prevented him from ever seeing an operating fitz machine.

The Gegauf sons, Fritz and Gustav, took over operations and delivered the first fitz machine to the silk factory in July 1927. So many orders came in that the factory in the Neue Schloss could no longer support the production of both fitz and hemstitch machines. As a result, new workshops were built on the edge of town, which would be the location of the Bernina factory into the 21st century. The new facility housed both administrative offices and the manufacturing plant. Presser feet and other attachments were produced alongside the hemstitch machines.

Developing a Name for Bernina Sewing Machines: 1932–71

By the early 1930s the business, now known as Fritz Gegauf’s Sons, was entering another difficult period. A worldwide economic crisis began in October 1929, and, with too little work to do, the workshop was cut back to 35 employees. Furthermore, technological advances in the production of artificial silk made the fitz machine unnecessary. A new product was needed. The Gegauf sons noted that 20,000 sewing machines were being imported annually into Switzerland and saw an opportunity for domestic production. Wilhelm Brutsh, a sewing machine specialist, was recruited to help promote this new sector of the business. In 1932, Model 105 became the first home sewing machine to be made in Switzerland. It was given the brand name “Bernina” after a nearby mountain. The ma chine established a precedent for quality and durability. It began to sell, but the Depression and the onset of World War II prevented any rapid growth.

Over the next several decades, Fritz Gegauf piloted the company toward world-class status with skillful and creative leadership. The first Bernina sewing machine was exported in 1935, and in 1938 Model 117 became the first zigzag sewing machine produced in Switzerland. The world’s first free-arm zigzag sewing machine, Model 125, was developed in Steckborn and unveiled in 1944. In 1947 Gustav Gegauf died, and the firm’s name was changed to Fritz Gegauf AG. The regular introduction of new models continued, keeping Bernina on the cutting edge technologically. Model 530 came out in 1954. The machine offered new decorative stitches, a buttonhole device, and the first patented clip-on presser feet. Model 730, which was launched in 1963, was the successor to Model 530. It was the first top-of-the-line machine to include a knee-activated presser foot lifter. Also in 1963, the one millionth Bernina machine was manufactured in Steckborn.

By this time women were beginning to sew less, attracted by the relatively inexpensive, imported clothing that was becoming available. The craft of sewing began to transform from a practical necessity into a creative hobby. The future leadership of the company would have to be sure to promote the creative side of sewing to keep the company viable. The third generation in Bernina leadership was Fritz Gegauf’s daughter Odette Ueltschi-Gegauf. She began taking on responsibilities at the company under her father’s guidance when Fritz’s son died in 1965. Despite a lack of formal business training, Ueltschi-Gegauf was praised for her intuitive business sense and an ability to capitalize on connections with people. Bernina’s reach broadened under the joint leadership of father and daughter. Bernina of America was established in Chicago in 1969. By taking over from the independent distributors that had been selling Bernina machines since the early 1960s, it was hoped that the North American location would ensure consistent service to both dealers and consumers.

Technologically Advanced Machines for the Late 20th Century

In 1971 the first Bernina machine with electronic foot control was introduced. This machine, known as Model 830, remained the top-of-the-line model for 11 years and became the company’s all-time best-seller. Meanwhile, control was decisively handed over to the third generation when, in 1975, Fritz Gegauf retired after 50 years at the head of Bernina. Odette Ueltschi-Gegauf assumed primary control and became president in 1979. Under her guidance, Bernina machines entered the computerized realm, developing, for example, the ability to automatically set the appropriate stitch width, length, and needle position based on the stitch selected.

Company Perspectives:

Make the choice of a lifetime and choose BERNINA. You are guaranteed years of creative pleasure while experiencing the delights of textile artistry at its very best. For over 100 years my family has been in the business of satisfying customers. It is my personal desire to continue producing Swiss precision engineered products of the highest quality which meet future sewing trends head on in terms of computer technology—including personal computers and the Internet—and an after sales service second to none. BERNINA offers products à la carte to suit all budgets and individual requirements as well as an all-embracing selection of accessories and practical sewing and embroidery aids. Regular sewing publications full of useful and creative ideas complete the BERNINA ethos. —H.P. Ueltschi, chairman

New models were introduced at a rapid pace through the 1980s. Model 930, which came out in 1982, was able to create multi-motion stretch stitches and decorative patterns. The machine came with DC power. Model 1130, introduced in 1986, became the first fully electronic computerized machine, with capabilities such as automatic one-step buttonholes and stitch pattern memory. Model 1230, which appeared in 1989, had expanded memory capabilities that made it more versatile than its predecessor. Altogether, Bernina was producing about 140,000 machines a year and employed approximately 1,100 people worldwide.

In 1988 Hanspeter Ueltschi assumed the leadership role after his mother retired. Odette Ueltschi-Gegauf died in 1992. Her son’s tenure at the head of Bernina would see the development of technologically advanced machines, allowing the sewer to produce intricate quilting and embroidery pieces that were formerly done only by hand. During this time, Bernina also began moving some of its production overseas. A factory was established in Thailand in 1990 for the manufacture of sewing machine parts, the Bernina 950 semi-industrial machine, and, later, the simplified “classic” Model 1008. In 1992 the appearance of Model 1530 continued the progression toward computerization. This machine had an LCD display and a command ball mechanism that offered simplified and superior sewing control. The model was upgraded the following year to Model 1630, which offered sewing control on an even more intricate level. The 1630 machine came with more than 400 stitched patterns, five alphabets, eight fully automatic buttonholes, expanded memory, and 12-direction stitching.

These innovative machines were part of an effort to add modern appeal to a traditional craft that was in danger of being lost in the younger generation. Business continued to be good through 1992, when the company announced a profit on net revenues of SFr 225 million. Sales at just the Fritz Gegauf plant in Steckborn rose 4 percent that year. The company, now with 1,160 employees, hoped to hold ground in Switzerland and even increase sales in Japan and Germany. Unfortunately, results for 1993 fell short of that goal as revenues fell 3 percent from the previous year. Although domestic sales were up 10 percent, a poor economic situation in New Zealand, Scandinavia, and Australia led to an overall drop in sales. The downward trend continued in 1994, due in part to the poor showing of the Swiss franc in exchange markets. Exports to Japan had fallen consid erably and sales in Switzerland were also down. Bright spots were the German and North American markets, where sales rose. A new president, Martin Favre, had just taken over in the United States.

As a whole, however, the sewing machine market was stagnating, and 200 jobs were cut between 1993 and 1995. More workforce reductions were called for in June 1995, when Bernina announced that 200 more jobs would be cut at the Steckborn factory by 1998. The move was part of a transition to a new production method that entailed buying more pre-made machine parts and manufacturing more components abroad. The number of employees in Steckborn fell to 650 by early 1996, and the company announced worldwide revenues for 1995 that were down 5 percent from the previous year, although revenues at the Steckborn plant had risen slightly.

In 1997 Bernina invested SFr 4 million in the development of machines that were completely computer-operated, hoping that the high-tech machines would effect a turnaround in the company’s fortunes. Production costs remained high and the Steckborn plant reduced its staff to the low 500s by the end of the year. Sales in Europe were mediocre, but business in the United States was prospering. The new computer sewing machine came out in 1998 and was dubbed the “artista.” The artista was run almost entirely from a touch screen. It could exchange stitches with Bernina Customized Pattern Selection software, accept an embroidery module to become a combination sewing/embroidery machine, and convert computer-scanned, digitized artwork into an embroidery design.

Another step toward computerized sewing freedom was taken in 2000 when the Bernina “Magic Box” hit the market. The device was intended to address the problem of incompatible embroidery card standards among the various sewing software manufacturers. With the Magic Box, a sewer could transfer a design from one card type to another, so that design cards from any manufacturer could be used on any computerized machine. The Magic Box also was able to link with a personal computer and transfer a design file to an embroidery card. Even sewers who did not use Bernina machines could use the Magic Box.

Key Dates:

1893:: Karl Friedrich Gegauf obtains a Swiss patent for the world’s first hemstitching machine; production begins in Steckborn.
1927:: The Gegauf sons begin providing “fitz” machines to the local silk factory.
1932:: Model 105 becomes the first sewing machine to be produced in Switzerland; the brand name “Bernina” is taken from a nearby mountain peak.
1944:: Model 125, the world’s first free-arm zigzag sewing machine, is introduced in Steckborn.
1963:: The one millionth Bernina sewing machine is manufactured in Steckborn.
1975:: Fritz Gegauf dies; daughter Odette Ueltschi-Gegauf takes over.
1988:: Hanspeter Ueltschi replaces his mother as head of Bernina.
1998:: The “artista” machine brings computer-controlled sewing to a new level.

An emphasis on technology seemed to be the best way to attain growth in revenues. High-end computer sewing machines, which could cost up to $5,000, were the fastest-growing segment of the sewing machine market in the late 1990s. Sales of more traditional machines were flat, as discount clothing stores made the money-saving potential of handmade clothing negligible. Bernina, therefore, promoted sewing as a creative activity through its publications and customer education programs, encouraging sewers to produce heirlooms for future generations. Recognizing that the majority of sewers used the Internet regularly, Bernina decided to capture their attention with an enhanced web site. The new site, launched in August 2001, included a Learning Center, streaming video, and live interviews with guest sewers. Visitors could compare machine models, download free projects, and interact with fellow craftspeople in chat rooms. In addition, a new Bernina machine was introduced that would offer avid sewers the latest in computerized control. The activa 145, like its artista predecessor, included an LCD panel and an array of buttons and controls that gave the user precise control. But the activa was promoted as being more compact and easier to use than the artista. With an extensive library of stitches, designs, and alphabets, the new machine made possible the detailed personalization of sewing techniques. By combining the latest technology with a traditional craft, Bernina hoped to hold the interest of a new generation of sewers.

Principal Subsidiaries

Fritz Gegauf AG Näh- und Sticksysteme; BERNINA (Thailand) Co., Ltd.; Crown Technics Ltd.; Bernina Verwaltungs AG; Proxomed Medizintechnik GmbH; BERNINA of America Inc.; BERNINA Australia Pty., Ltd.; BERNINA New Zealand Ltd.; BERNINA Japan, Inc.; BERNINA (Switzerland) AG; BERNINA Europe S.A.; BERNINA Finland Oy; BERNINA Denmark AS.