Family rif t that could shatter Swarovski
Relatives at war over bid to take crystal brand upmarket
THEIR crystals have adorned dresses worn by Beyoncé and Marilyn Monroe, Mercedes-Benz convertibles – and even a commode for a superwealthy client.
But such glamour is not enough for Swarovski’s boss who is locked in a battle with his own family to make the brand yet more exclusive.
Robert Buchbauer has said that in the wake of the pandemic, which has hammered sales, the company must stop making mass-market products with wide appeal such as mobile phone cases and manicure sets.
Instead, he says Swarovski should produce fewer, larger and more colourful products that can be sold at a higher price. Among
‘Shortfalls on a gigantic scale’
previous exclusive pieces is a glittering £3.5million Swarovski Mercedes sports car created for a Saudi prince, while a client in Japan spent £60,000 on a crystalencrusted commode.
But a rival group of relatives believes such proposals will lead to the downfall of the brand and are threatening to veto the proposals.
Mr Buchbauer, the great-great grandson of the founder who took over the company in April, said: ‘We are forced to reimagine and rescale our entire business.’
Today Chinese competitors are driving down the price of crystals, making them for as little as one per cent of the price of a Swarovski jewel.
In addition, the pandemic has caused ‘ sales shortfalls on a gigantic scale’. Global revenues for crystals are projected to plummet by 30 per cent, from £2billion last year down to £1.4billion.
Long-planned, sweeping cuts have only become more urgent, Mr Buchbauer said, with 6,000 employees likely to lose their jobs as 750 of its 3,000 stores worldwide close. He was talking to the AFP news agency f rom the brand’s headquarters in Wattens, Austria, which welcomes 650,000 tourists a year who come to see a giant chandelier surrounded by mirrors and crystal- studded clouds reflected in a pond.
Mr Buchbauer said his plan had won the backing of family members holding about 80 per cent of shares, which he claimed was a ‘legally effective’ decision. Unless his plans were executed in full, ‘we’ll end up among the losers’, he added.
But his London-based cousin Nadja, her father Helmut, uncle Gerhard, and another relative on the board, Paul, are leading a fightback, saying they want to stop Mr Buchbauer ‘before everything goes down the drain’.
The group and others say that the roughly 20 per cent of shares they hold gives them a veto. Paul
Swarovski said Mr Buchbauer should stand down. ‘As long as the captain who is steering us toward a reef has his hands at the tiller, one has to make sure to get him away from the tiller,’ he said.
The company was founded in 1895 in Wattens when Daniel Swarovski developed a machine to cut glass to shimmer like diamonds.
Today the company has its own affordable jewellery and watch line, provides fashion houses with rhinestones, and makes binoculars under the Swarovski Optik brand.
It forged a successful partnership with lingerie company Victoria’s Secret and collaborates with Disney on figurines of well-loved characters such as Mickey Mouse.
Selina Staerz, a union representative at Swarovski, said many staff do not believe it will succeed in becoming a luxury brand. ‘ The superwealthy don’t need our crystals. They can buy diamonds,’ she said.