Broken China
In December 2004 we reported
Ireland-based Waterford Wedgwood the world's leader maker of fine china and crystal announced it will buy competitor Royal Doulton, based in the UK. These leaders in the luxury tableware market have both been suffering due to the shrinkage of the dollar, a major market for their products.
Now news comes that Waterford Wedgwood has gone into receivership, a victim of the decline in purchasing luxury goods. The company has been losing money for five years, and clearly the Royal Doulton acquisition made their situation even worse. The company has been looking for a buyer, but with no luck so far.
UK-based Wedgwood has origins that go back to 1759, while Irish-based Waterford has been making crystal since 1783. Waterford bought Wedgwood in 1986.
The failure is attributed to the increasing competition from good dinnerware made in Asia. An article in The Independent (1/6/09, "The rise and fall of Wedgwood") quotes on analysts as saying "There are a lot of lower-priced alternatives so Waterford Wedgwood's products became more and more niche. They have become more and more sidelined into gifts and Upmarket and they have been overtaken by the mass production market." In addition, the brands have become obsolete, targeted at a very old audience who trotted them out when company came.
In retrospect, the Royal Doulton acquisition was one of many eager acquisitions that have turned out to be ineffectual and ill-advised. We'll see many more such deals exposed
I suspect the brands will survive, but much diminished and the operations will all be moved away from the UK and Ireland.
