Iconic mechanical switch manufacturer Cherry is in deep financial trouble, with its debts now exceeding its total equity. Because of this, the company had to hold a general meeting, and it’s now considering selling either its peripherals or its Digital Health & Solutions division to stay afloat, according to a report from Heise Online. It should be noted, though, that Cherry’s keyboard switches fall under the components division, while its peripherals business focuses on actual keyboards and mice. This means that the beloved Cherry MX switches are safe from being taken over by another company, at least for now.
Cherry held the patent for the legendary Cherry MX switches that many mechanical keyboard enthusiasts swear by, but it finally expired in 2014. This led to an explosion of competing switch brands, like Gateron, Kailh, and Outemu, among others, which you can find in the best gaming keyboards. Furthermore, the company has since lagged behind the competition in releasing innovations, with other companies being the first to introduce factory-lubed and Hall-effect switches. Even gaming peripheral companies like Corsair, Logitech, and Razer have introduced their own switches sourced from Cherry’s competitors.
The COVID-19 Pandemic allowed the company to flourish until 2021. But by 2022, its sales had fallen by half to just EUR 41.2 million. Its total turnover recovered in 2023, but the Digital Health & Solutions and components divisions continued to slip. Things have gotten so bad that its Chief Financial Officer, Jurjen Jongma, said that the only way for the company to survive is to sell some of its parts. “Due to the groups low market capitalization and the current share price of Cherry below one euro, it is currently neither possible nor advisable to strengthen the group’s equity in any way other than through strategic mergers & acquisitions options,” said Jongma.
As part of the company’s cost-cutting measures, it has also ended switch production at its headquarters in Auerbach. Instead, it will outsource manufacturing to partners in China and Slovakia. Aside from the potential sales of one of the divisions mentioned above and outsourcing switch production to cheaper locations, the company has also already sold the Active Key division, its hygiene peripheral device business, for 21 million euros, secured extended financing worth 23 million euros, and received support from its majority shareholder, Argand Partners.
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