The deficit at Cherry is adding up. From January 2025 to the end of September, the company made a net loss of almost 20.4 million euros, with a turnover of 70.7 million euros. Cherry now has more debt than equity (equity deficit), which recently led to an extraordinary general meeting.
Made in China
Chief Operating Officer (COO) Udo Streller announced there that the switch production in Auerbach has now been completely discontinued. Instead, Cherry has outsourced production to "established partners in China and Slovakia".
The patent for the Cherry MX design finally expired in 2014. Since then, more and more Chinese companies have been producing switches that are also of comparable quality to Cherry's. Alternatives include JWK, Gateron, SP Star, Kailh, KTT, Outemu, and Tecsee. Switches from China were among the first to be lubricated with grease or oil from the factory. They are also experimenting with materials. Cherry is lagging behind its Far Eastern competitors in so-called Hall effect switches with magnetic fields.
There are now countless switch variants. Providers like Razer and Logitech also have their self-marketed types produced by Chinese manufacturers, such as Kailh.
Auerbach will henceforth function as a "cost-effective development, logistics, and service hub" for Cherry. Contracts with an external logistics partner expire at the end of the year.
There are now countless keyboard switches from various manufacturers, mostly in colorful housings.
(Image: Mark Mantel/ heise medien)
Partial sale
Restructuring, loans, and capital injections from investors are not enough to keep Cherry afloat. The manufacturer therefore wants to sell either the peripherals division or the Digital Health & Solutions division to use the proceeds to boost the remaining division.
The peripherals business includes all keyboards and mice, including gaming and office models. Switches are separate from this and are part of the Components division. Digital Health & Solutions includes card readers, PIN pads, and telematics-compliant applications such as the TI Messenger.
CFO Jurjen Jongma said at the general meeting: "Due to the group's 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."
Cherry has already sold the hygiene peripheral device division "Active Key" for 12.5 million plus an option for an additional 8.5 million euros upon achievement of financial targets. Active Key included, for example, washable keyboards.
Sales slump
According to its statements, Cherry benefited from high demand during the coronavirus pandemic, which has since subsided. In 2021, Cherry's turnover was still 168.5 million euros. In 2022, annual sales of gaming products halved to 41.2 million euros. In 2023, it recovered, but the Digital Health & Solutions division slipped by a good 30 percent to 23 million euros. Components turnover halved to 10.9 million euros.
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In 2025 (until the end of September), gaming and office peripherals have so far generated 50.3 million euros in sales, Digital Health & Solutions 16.5 million, and components 3.9 million. In healthcare, Cherry is facing a shift: Around 90,000 medical supply providers, such as physiotherapists, will only be connected to the telematics infrastructure on October 1 2027, instead of January 1 2026.
(mma)