Executive Overview - Behind the Scenes with Chris Johnson, Group Manufacturing Director for Waterford Wedgwood plc

June 1, 2001
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This article presents a behind-the-scenes look at the company and the luxury giftware industry through the eyes of Waterford Wedgwood’s group manufacturing director, Chris Johnson.

Johnson
Waterford Wedgwood plc, based in Stoke-on-Trent, UK, is a leading luxury lifestyle goods company with numerous prestigious brands, including Waterford Crystal, Wedgwood China, Rosenthal and All-Clad. Working with luxury houses like Versace and Bulgari, and with individual fashion designers such as John Rocha, Jasper Conran, Nick Munro and Paul Costelloe, the company constantly aims to produce new product ranges and extend its long-standing tradition of collaboration with top designers and artists. Following is a behind-the-scenes look at the company and the luxury giftware industry through the eyes of Waterford Wedgwood’s group manufacturing director, Chris Johnson.

How long have you been with the company, and how has the industry changed in that time period?

I’ve been in the industry for 42 years, and with Wedgwood for the past 33 years. In that time period, the industry has changed in a whole number of ways. When I first started, the industry was very fragmented, composed mostly of very small, family-owned companies. It was a highly labor-intensive industry with very low mechanics, and it was virtually all family-oriented. Today, the industry is becoming more and more highly engineered, with state-of-the-art production facilities. Gone are the small factories that we used to have, and gone are the majority of the families that were involved in the industry. Now there are very successful operations like Waterford Wedgwood. We’ve managed to mechanize where we can while maintaining the fantastic hand skills that we’re world-renowned for. It’s the incredible amalgam between the two that has made us so successful.

As far as the marketplace is concerned, the small retailers are disappearing and the markets are now in the hands of very large organizations around the world. The designs in those markets are coming away from the rather traditional approaches that we used to have and are moving toward very modern concepts. For instance, the key for Waterford Wedgwood has been to introduce new designers into the business—fashion designers as well as art designers. We are developing a completely revolutionary design concept, which satisfies a much wider customer base than the traditional base we used to have.

What is Waterford Wedgwood’s business philosophy, and how has this philosophy contributed to the company’s success?

Over the years, Waterford Wedgwood has transformed itself from a conventional tabletop company into a luxury lifestyle gifting company, with a fantastic stable of world-class brands, each of which holds the premier position in one of the world’s major trading posts. For instance, Waterford in America is a phenomenal brand, Wedgwood in Japan is quite remarkable, and Rosenthal is a key player in Germany and on the continent of Europe. This philosophy has allowed us to achieve a phenomenal global reach and has made us globally competitive.

What are some of the biggest challenges that Waterford Wedgwood currently faces as a tableware/giftware manufacturer, and what steps has the company taken to overcome those challenges?

The Western economies are competing head on with low-labor-cost countries in the Far East. And there are extraordinarily good factories in the Far East. As a result, we have been absolutely passionate about getting ourselves into a globally competitive position. We’ve invested very heavily in our plants, and we’ve reorganized and restructured to reduce the capacity of some of our less productive units. Additionally, we’ve invested something like 150 million euros in Wedgwood alone over the last five years, both on mechanization and reorganization/restructuring. We believe that to compete in the world market—and that’s what we’re here to do—we can’t sit back and expect our brands to do it all for us. We really have to invest in the future.

Over the past four years we’ve doubled our sales and profit, despite increasing global competition and economic concerns. We believe that we have significant potential in each of our major markets, and that we can improve our position in those markets despite the difficulties that may exist.

Do you anticipate continued growth in the markets served by Waterford Wedgwood? If yes, what will drive that growth?

Our new president and COO, Redmond O’Donoghue, is determined to double the business by 2005, and I believe he will succeed. We’re going to be doing that with the same efforts we’ve made over the previous years. Some of our key cornerstones are that we have to maintain global competitiveness so that the product is well priced and is accessible to a wide customer base. We also believe that we must have new, fresh designs to suit changing tastes. Additionally, we are becoming more flexible in our approaches to the markets. And we’ll continue to use new designers—both fashion and art designers. So we’re going to be serving all parts of the customer base, rather than just the traditional, more mature customer.

Do you have any fears about the slowing U.S. economy and how it will affect Waterford Wedgwood and the tableware/giftware markets in general?

We recognize that the U.S. economy is in a downturn, but we believe we can weather that situation with our product base and with the global reach of our company. If there is a downturn in one market, we expect to be able to overcome that downturn by developing products to suit the broad base of customers in the States and by expanding our business in other markets that are not as affected.

The U.S. is a dynamo of a country and a dynamo of an economy. Every economy tends to have sort of a slight blip, and generally people exaggerate those blips, just as they exaggerate the good times. We recognize that we have to reorganize, restructure and be flexible enough to quickly develop new products to suit different lifestyles. The demands of the customer when times are hard do change, and consequently we have to change with them and react very quickly. With all the investments we’ve made, and with our marvelous workforce, we believe that we will still maintain our target of doubling the business in overall global terms.

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