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Waterford Wedgwood, for instance, recently acquired Ashling Corp., a designer and marketer of table and bed linens, in an effort to further expand the company’s brand extension program—a program that has so far brought the company an estimated additional $85 million in revenues.
Lenox, too, has been successful in this effort. The company’s growth has been in the double digits for the past four years, and it expects to achieve continuing success by focusing on what it calls its “portfolio of powerful brand names.” The company has said that it will continue to focus on products within categories that offer significant growth opportunities, including casual dining and giftware.
In addition to using the strengths of their own brand names as marketing tools, dinnerware manufacturers are also capitalizing on the names of well-known clothing and lifestyle designers, such as Christian Dior, Ralph Lauren, Donna Karan, Gianni Versace and Calvin Klein. Wedgwood reported that its sales in 2000 were boosted by successful new product ranges from designers Nick Munro and Paul Costelloe, and new alliances with Vivenne Westwood, Jasper Conran, and artist and designer David Shilling are expected to provide even more growth in 2001-2002. Rosenthal China produces china designs by both Gianni Versace and Bulgari, well-known for fine Italian jewelry design. And a new Nautica tableware collection is soon expected to emerge from partnership between David Chu and Pfaltzgraff. This trend is likely to continue, as consumers appear eager to buy into designer labels.
“The steady increases in spending year after year for housewares shows that Americans value their homes and want their time at home to be as satisfying as possible,” said Clark Johnson, vice president of NPD HomeTrak, a marketing intelligence firm. “Design and product quality are improving across all price points, and consumers are buying products that make them feel good about their home environment.”
Challenges affecting today’s dinnerware and giftware manufacturers include economic uncertainties, increasing energy and labor costs, and increased competition from low-labor-cost countries. Aside from continuing to focus on new product introductions and creative marketing strategies, companies are upgrading manufacturing technologies, streamlining operations and, in some cases, reducing their workforce to remain profitable. Oneida, for instance, has reduced its worldwide manufacturing employment by 450 positions since January 2001, representing approximately $12 million in annual wages, and worldwide non-manufacturing employment by another $4 million in annual wages, as part of an effort to efficiently balance manufacturing output with incoming orders. Lenox, on the other hand, has invested in more efficient technologies and employee training and development in an effort to stimulate growth, while Waterford Wedgwood has focused on further development of its brands while growing the group through selective acquisitions.
Overall, most dinnerware and giftware manufacturers hold a positive outlook for the near term.