On the Slab: Waterford wedgwood

After six years of operating losses, the Anglo-Irish tableware manufacturer went into administration in January with debts of EUR450m. Until then, it had been bankrolled to the tune of EUR400m via a series of rights issues by its non-exec chairman Sir Anthony O'Reilly (former rugby star turned media mogul) and brother-in-law Peter Goulandris. At stake are 1,900 jobs in the UK, 800 in Ireland and 5,800 more overseas.

by
Last Updated: 31 Aug 2010

Cause of death It's an enterprise tottering on three legs: Irish fine glassmaker Waterford, founded 1789, and two iconic English ceramics makers - Wedgwood, founded by Josiah in 1759, and Royal Doulton (b1815). Yet brands that rely on tradition, however noble, are easily shattered. Sales have been hit by the rise of the euro (the group's operating currency), making its wares pricier in the UK, US and Japan. Wedgwood has outsourced most production to Jakarta to cut costs, but this compromises the 'Made in England' tag that has driven Asian sales. The group, called a 'Brit-kitsch dinosaur' by one commentator, was once a favourite of royal households. Now it's turning to names like Gordon Ramsay to give its wares a modern spin.

Reincarnation? There's good hope of a resurrection for these historical brands, but a carve-up looks inevitable. US fund KPS Capital has lodged a bid with receiver Deloitte and might hold the group together in the short term but then sell off viable parts. A rival Middle East-funded consortium led by Thomas Wedgwood - descendant of Josiah - argues that KPS will have little concern for the British heritage or jobs. Thomas wants to decouple Wedgwood from Waterford and pursue the affluent Asian market. Workers at Waterford favour the bid from US PE firm Clarion Capital, which promises to keep manufacturing in the city, where 480 have already been laid off. Whatever the outcome, one big problem remains: the days of elaborate dinner sets are long gone. The brands must bring new ideas to the table.

Find this article useful?

Get more great articles like this in your inbox every lunchtime

Upcoming Events

Subscribe

Get your essential reading delivered. Subscribe to Management Today