Waterford Wedgwood, Waterford Wedgwood calls in receivers, the fall of Waterford Wedgwood
Associated Press
Rosie Holland, 6, looks at a Waterford crystal glass in a Dublin city centre store.

What Killed Famed Crystal and China Company Waterford Wedgwood?

January 06, 2009 11:59 AM
by findingDulcinea Staff
Some analysts blame Waterford Wedgwood’s bankruptcy on longstanding debt issues; others say it highlights a larger trend away from luxury tableware and traditional wedding gifts.

U.S. Parties Try to Save Waterford Wedgwood From Bankruptcy

Three American groups were in talks Tuesday regarding Waterford Wedgwood, whose subsidiaries include the maker of the famous Waterford crystal brand and the British potter Wedgwood, whose china tea and dinner services have been a staple of the British royalty.

The Irish company had called in the receivers, the British equivalent of bankruptcy, on Monday after being unable to buy more time from its creditors, and had also required that its shares be suspended from the Irish Stock Exchange.

Waterford Wedgewood is the first European group to go bankrupt in 2009, and The Wall Street Journal predicts that many others will follow suit. In Britain alone, several iconic businesses have recently gone into bankruptcy due to the global economic crisis, including the department store Woolworths, which plans to close this week and put 27,000 employees out of work; Hardy Amies, known for being the queen’s tailor; the tea and coffee maker Whittard of Chelsea; and the ceramics maker Royal Worcester and Spode.

Some industry analysts blamed the economy, and specifically the credit crunch, for dooming Waterford Wedgwood. Others said the company’s inability to cut costs as quickly and effectively as its competitors did it in. But some point to current consumer trends away from fine china and crystal in favor of more casual housewares, and a corresponding shift in the bridal registry selections of engaged couples toward electronics and other nontraditional items.

Background: 250 years of business

Waterford Wedgwood may be closing its doors on a business that is more than 250 years old and has about 9,000 employees working in more than 80 countries worldwide.

Wedgwood was founded by Josiah Wedgwood in England in 1759, who became the “Potter to Her Majesty” after producing a tea and coffee service for Queen Charlotte, the wife of George III. During the 19th century, Wedgwood’s bone china dinner service was used by U.S. President Theodore Roosevelt in the White House.

Waterford was started by two brothers, William and George Penrose, in Ireland in 1783, whose goal was to “create the finest quality crystal for drinking vessels and objects of beauty for the home.” Its products feature a distinctive “Waterford” signature on their bases. The two companies, Wedgwood and Waterford, merged in 1986.

Opinion & Analysis: Why did Waterford Wedgwood collapse?

The fate of Waterford Wedgwood has surprised some, but the BBC notes that the company had been in trouble for years. In May 2005, the debt-laden company underwent restructuring to cut costs, but by October of last year its pre-tax losses in the previous six months were over $85 million, and its debts at 450 million euros. In December, it announced that it would withdraw from the London Stock Exchange to further cut costs. But the BBC predicts that the company will not completely disappear. “Waterford, Wedgwood and Royal Doulton are quintessentially classic brands that represent a high quality product which is steeped in history,” said Angus Martin, a joint administrator of Deloitte, to the BBC.

The Daily Mail posits that, although the company’s troubles were worsened by the credit crunch, it also failed to address problems such as its rivals switching to low-cost manufacturing in countries in the Far East, rising fuel costs, and the weak dollar, affecting business with its main export partner, the United States.

Waterford Wedgwood’s decline could also be linked to a decrease in demand for fine china and crystal, due to more relaxed lifestyles that do not require luxury tableware.

“We encourage couples to register for the way they live today,” said Bette Kahn, spokesperson for Crate & Barrel, to the Atlanta Journal-Constitution. “Things are more casual and informal than they were years ago. People’s lifestyles are more hectic. They pick up dinner from a local carryout at the last minute or host pot-luck suppers. Casual dinnerware, fun glassware and mix-and-match home accessories can create a couple’s style.”

New couples are also looking into nontraditional gift registries, which include electronics chains and stores such as the home improvement monolith Home Depot, which set up a bridal registry in 2004 in response to consumer demand.

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