The family group is in dispute over the rescue strategy
"Swarovski" ... awaits a captain to restore crystal splendor
The group has subsidiaries in 170 countries.
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At the Swarovski headquarters in the heart of the Austrian Alps, a dispute prevails in this family group of sparkling crystals regarding the strategy to be adopted to restore the luster to this brand that has faded due to the popularity of Chinese products and the spread of the "Covid-19" epidemic.
Should jewelery destined for the general public be abandoned to focus on valuable jewelery, even if necessary to enter the stock market?
This plan, proposed by Executive Director Robert Buchbauer, is not unanimous, and some seek to oust the captain, whom his cousin Paul Swarovski accuses of "leading the ship to doom."
Health crisis
Accounts are often settled out of the limelight in the world of jewelry, which is the first time that this prestigious establishment, which was established 125 years ago in "Wattens", publishes its laundry in public.
But it seems that panic has seized the inheritors of Daniel Swarovski, who invented a machine that turns glass into a shiny material that mimics diamonds, which is much less expensive.
The "Covid-19" epidemic, which caused the closure of a large number of points of sale around the world for a period of time, led to the intensification of the deterioration recorded for a long time.
Revenue from Swarovski Crystal Business, which is known for adopting the swan bird as its symbol, is expected to decline by 30% in 2020 to 1.9 billion euros.
In addition to the health crisis, the brand faces Chinese competition with similar goods in the public eye, whose price does not exceed 1% of the price of Swarovski jewelery.
It is no longer enough to show off past glories to lure buyers in the US and Asia.
Drastic measures
"We have to reorganize all of our activities," says Robert Buchbauer, of the group's vacant headquarters, which normally receives 650,000 visitors a year in a designated visitor complex.
And he stresses the need to stop producing some accessories, such as cell phone covers encrusted with crystals, which undoubtedly contributed to the popularity of the brand, but is no longer popular today.
It calls for a focus on more elaborate crystals, with a greater number of colors that can be sold at more expensive prices.
The CEO warned of austerity measures looming on the horizon, as the company, which has branches in 170 countries and employs 29,000 people in Austria, India, Thailand, Vietnam, Serbia and the United States, will have to abandon 6,000 of its employees and permanently close 750 stores out of 3,000.
In Wattens alone, the company has laid off about 1,200 employees, and another 600 jobs are at risk.
veto
Robert Buchbauer said he was convinced that these drastic measures were "the only way to enter a new era."
However, "the tension is running high," says union official Selena Sterts.
What adds insult to injury and exacerbates the resentment of dismissed employees is the circulation of pictures of the founder's grandchildren spending their holidays on picturesque beaches, or arriving at meetings by helicopters, especially since 80% of shareholders supported during the General Assembly held in late October, radical solutions Proposed.
Opponents of this plan, led by Paul Swarovski, have challenged this strategy, armed with their right of veto.
Diamond substitute
Whatever the outcome of disputes in Swarovski, confidence has been lost in a company that has always been praised for the working conditions it provides, from housing to child custody.
Many believe that "Swarovski" will fail in its goal, as "the rich do not need its jewelry, and they can acquire diamonds."
The founder of the brand invented a machine that turns glass into a shiny material that mimics a diamond.
In addition to the Corona crisis, the company faces Chinese competition.
The company's CEO has warned of austerity measures looming.
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