Even iconic brands are not immune to global events, and the cataclysm known as 9/11 changed forever the fortunes of Victorinox, maker of the more famous of the two Swiss Army knife collections.

Few are the travellers who have not noticed the huge barrels full of pocket knives confiscated at airports, from passengers who forgot to pack them in their hold baggage.

Sue Rechner, chief executive of Victorinox Swiss Army Watch – which now also owns its main rival, Wenger – admits that Swiss Army knife sales were hit badly after 9/11.

She explains: “We had a decline of 30 per cent, mainly because of changes in airline policy, which significantly affected the duty-free business behind security gates.”

A 30 per cent drop in the leading line would cripple most manufacturers. However, Ms Rechner explains: “We had expanded into both travel gear and apparel before 9/11.”

‘Eschewing precious metals, the brand is focused on the active, no-nonsense consumer rather than the fashion victim’

She is careful to emphasise: “We have always considered watches a core business. Swiss Army has such strong primary values and attributes that it allowed us to extend the brand into other carefully considered categories.”

For 2005-06, Victorinox showed watch collections of a decidedly upscale nature compared with the more affordable models that established the line.

The company could already boast that one out of every five Swiss-made watches imported into the US is a Victorinox Swiss Army watch, and that its watches adorn the wrists of former President Bill Clinton and The X-Files character, Fox Mulder.

So what inspired Victorinox to go upmarket with its watches, especially with mechanical models?

“We saw an opportunity to capture tremendous market share in the $500-$1,000 price segment.”

Because Victorinox was not merely a badge-engineering brand, like many of the fashion names appended to watches, it could offer credibility among knowledgeable consumers. “We have a devoted team of designers and our own production facilities, which allow us tremendous flexibility.”

Did Victorinox have any brands in mind as targets?

Ms Rechner says: “We are an independent company and focus on what we want to accomplish rather than on what others are doing. In this price range, there are no other Swiss-made watch brands that combine the value we offer with authentic heritage and classic iconic styling.”

She uses the word “heritage” without exaggeration: the company was established more than 120 years ago and is older than many revered watch houses.

Strong identity notwithstanding, Victorinox’s ambitions will involve serious street fighting. UK prices for the mechanical models peak at a sensible £975, positioning them against entry-level models from the market leaders, including TAG-Heuer and Omega.

The styling and “attitude” mean the Swiss Army watches are unashamedly aimed at 18-to-35-year-old males with sporting interests, just like the products of TAG-Heuer and Omega.

All of which creates an amusing situation: Victorinox Swiss Army, to use the company’s full name as appended to the watch dials, is about as strong a brand as one could find, but for most consumers it still calls to mind pocket knives.

Yet so resolute is the company about carving out a niche above the segment occupied by their quartz models – which start at £145 – that it has chosen not to allow the watches to be sold by its knife-selling accounts.

The range includes: automatic chronographs that suggest a price 35 per cent higher than the £975 that Victorinox is charging; dual time-zone models for only £620; large-diameter models with highly legible dials; models for wearers involved in extreme sports, a choice of metal bracelets and leather or rubber straps, and mid-size models for women.

Eschewing precious metals, the brand is focused on the active, no-nonsense consumer rather than the fashion victim.

Industry observers will watch closely to see how the transition can be made from affordable all-quartz models to something far more ambitious.

But Victorinox is cautiously confident , and Ms Rechner sounds like an old hand at the watch game.

She says: “We are continuously evolving the watch line. It’s important to offer new styles to keep the brand fresh and in demand.”

As long as Victorinox stays true to that celebrated red-and-white logo, demand is unlikely to waver.