Waterford Wedgewood Collapses

LONDON — Waterford Wedgwood PLC, the maker of classic china and crystal, filed for bankruptcy protection on Monday after attempts to restructure the struggling business or find a buyer failed.

Four administrators from business advisory firm Deloitte were appointed to run the company's businesses in Britain and Northern Ireland, while a Deloitte partner in the Irish Republic was appointed as receiver of Waterford Wedgwood PLC, the ultimate parent of the U.K. companies, and other Irish subsidiaries.

The U.K. joint administrators said they intended to continue to run the business as they seek a buyer. Trading in the company's shares was suspended on the Irish Stock Exchange where they languished at just one-tenth of a euro cent and the company's directors _ including Anthony O'Reilly, the Irish publishing magnate who along with his brother-in-law Peter Goulandris owns more than half of all Waterford Wedgwood shares _ handed in their resignations.

"Waterford, Wedgwood and Royal Doulton are quintessentially classic brands that represent a high quality product which is steeped in history," the administrators said in a statement. "The administration team will be working closely with management, customers and suppliers during this time to ensure operations continue whilst a sale of the business is sought."

Waterford Wedgwood, which employs around 7,700 worldwide, is the latest in a burgeoning list of iconic British companies to succumb to the global economic slowdown and credit squeeze. Department store veteran Woolworths, the queen's tailor Hardy Amies, tea and coffee merchant Whittard of Chelsea and fellow ceramics stalwart Royal Worcester and Spode have all filed for bankruptcy protection in recent months.

Wedgwood has been an iconic name in British pottery for 250 years, after its founder Josiah Wedgwood opened the first factory in Stoke-on-Trent, central England, in 1759. It began making bone china in the 19th century.

Waterford Crystal traces its lineage to a factory opened in Waterford, southeast Ireland in 1783, although that business failed in the 1850s. The brand was revived by Czech immigrant Miroslav Havel in 1947.

Under O'Reilly's watch, Waterford acquired Wedgwood in 1986 to form the present company, listing on the stock exchange and expanding overseas in the 1990s before buying fellow Stoke-on-Trent ceramics maker Royal Doulton in 2005.

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Much of the business has now shifted offshore, where it employs 5,800 people, including 1,500 people at a plant in Jakarta, Indonesia, which produces most of the company's ceramics. The majority of its crystal production has been handed to Eastern European subcontractors.

The company employs a work force just a third of that size at 1,900 in Britain, including around 600 in Stoke-on-Trent and 800 in Waterford.

Waterford Mayor Jack Walsh said the closure of the crystal factory would deal a cultural and psychological blow to all of Ireland, noting that the crystal plant was one of the country's top tourist attractions and the product "one of only a handful of iconic Irish brands.'

"Given this, it is of major strategic importance that this company not be allowed to slip into oblivion," Walsh said.

In Stoke on Trent, Margaret Kilford was close to tears as she described how important Waterford Wedgwood was to the town.

"It's part of Staffordshire. It's a very sad day," she said. "I've always bought Wedgwood. Nothing else will do. If it goes, that's it."

The Deloitte administrators said the company has "benefited from significant shareholder support" in recent years as the management team tried to restructure the business. O'Reilly and Goulandris have pumped more than 400 million pounds of their own money into the business since 2002.

"However, as trading conditions deteriorated, it became apparent that a restructuring of the businesses could not be achieved in an acceptable timescale," they said in a statement.

A subsequent alternative strategy to find a buyer also failed, they added.

Waterford Wedgwood chief executive officer David Sculley said he was "disappointed" about the bankruptcy filing, but remained confident a buyer could be found.

Under the administration process, administrators are appointed to salvage as much of the company as possible for the benefit of its creditors. While they may do so by selling the company as a going concern, they can revert to a break-up to recoup as much money as possible from assets if a buyer for the whole business cannot be found.

The receivership process in Ireland follows a similar path.

Waterford Wedgwood announced last month that it had been forced to ask its chief creditors for "forbearance" because the company could no longer pay its loans on time or in full. It also revealed falling sales and increasing first-half losses, and said its survival depended on securing new investment.

___

Associated Press Writer Shawn Pogatchnik in Dublin, Ireland, contributed to this report.

Comments

[johnnygoodwud]

i own a number of pieces of 'all clad' cookware. heavy duty, made in u.s.a. recently i wanted to add a pasta cooker, and when i looked at the piece it was flimsy, and sure enough made in china. you get what you pay for.

[KCFreedom]

Something to know when buying All-Clad, some of it is made in Chi-na, and all of the Emeril knock-off are made there too. I noticed when looking to buy an alleged U.S.-made All-Clad full set, the box says "lids made in Chi-na". Still good quality stuff, but getting to be a dubious choice if you like to buy American.

[danivers]

"Congratulations you've been selected to receive an iPhone!"

Man, that's annoying. Every single page. Really? Is this the future of the internet?

[findmind]

I have to get a few more place settings...arg!

[davidwayneosedach]

This sounds like an opportunity to snap up for the Chinese. They'd have the name and could make cheap knockoffs overseas.

[observer007]

I guess the good news is that if you've kept your paperwork, you might make some money on eBay when unemployment runs out.

[MagisterLudi]

I like Waterford. But it's too utilitarian.
Now Baccarat is the thing. I also have quite a few Lalique figurines. I Like the texture,somehow it always feels warm to touch.

[KCFreedom]

They must have gotten looted by the management. If you actually read the article, they had already outsourced/offshored most of their manufacturing. Where did all of that savings go?

Even the Irish "free market capitalism" model couldn't sustain the looting forever.

My sympathy for the people in the few towns in Britain and Ireland with the last few factories. Those jobs and the pride will be missed.

[KCFreedom]

Eirrrr!!!

[msjimmied]

The beauty of something crafted to transcend the ordinary that reflects a superior craftsmanship without regard to the cost of time or material will always command a high price. The object somehow exudes the skill and integrity of the master. It positively glows with that spirit...

Or you can make them by the thousands in China. Soon, we wouldn't know the difference...

[goodog]

We lose touch with a favorite commercial identity once production is subcontracted to the cheapest bid. When the corporate soul becomes focused executive pay and outlandish personal lifestyles, keeping a company alive is no longer about local pride and tradition, it's about slave labor and global reach.

[jukesgrrl]

I used to work for a retailer (now defunct due to a takeover) that sold these beautiful products. But while beautiful, they did not fit in with the style of home most young, well-to-do people imagine themselves living in. Couples choosing items for their bridal registries would turn them down even if their guests would buy them. "They won't survive the dishwasher" and "They're old-fashioned" were the remarks heard most often. Instead of focussing on their history, Waterford/Wedgwood should have employed more young, hip designers who could address the needs of today's buyers and marketed these products the way other fashion, luxury goods (e.g. Hermes and Louis Vuitton) are marketed. Wedgwood did very well with its Vera Wang-designed fine china, but it was too little, too late. They failed to keep up with the times and their company is going the way of the Victorian settee. Not to say there are no Victorian settees left in the world's most exclusive homes, but do you want one?

[chayefsky]

You make excellent points. The company could have updated its patterns without sacrificing quality.

[NationalTreasure]

what was that 10% corporate tax rate rhetoric that the republicans keep spewing about Ireland?

this countermands any argument that the republicans will make about not taxing corporations. Dell is moving to Poland and China where they are getting a better subsidized deal form those governments -- where wages, cost of living, lack of worker protections, lack of environmental protection and other issues can be evaded or subsidized

[Bitsko]

Good point.

[FZliveson]

Some of my ancestors came from Muskingum County in Ohio. There used to be beautiful ceramics companies there as well. They went bust. Times change and people are forced to look for employment.
Zanesville is a mere shadow of it previous self.

http://dept.kent.edu/museum/exhibit/pottery/pottery.html

[w8aminute]

Lenox China has a great US history also and made beautiful bone china in NJ & PA. It went bankrupt a couple of months ago too - after they moved to China. You can see and feel a definite difference in the bone china made here compared to what they've been turning out there.

[FZliveson]

W8aminute: So right. The "Feel" you refer to is very important.
Aesthetics are being driven under a digital haze that is robbing
each and every one of us of some of the real riches in life, well-beyond
what coin and paper can mean. Thanks for appreciating the good things.

[shengirl]

Nearly all the American potteries died out after WW II, when the American market became flooded with cheaper stuff from Japan. A few survived. Pfalzgraff is one, they proudly claim to be an American pottery, but some years ago I bought a tea cup/pot thing from them, in one of their patterns, that was made in China. I don't know how much of their stuff is made in China now, but these companies need to realize there is an image involved with their products. Fine china from England, not Indonesia. Crystal from Ireland, not Romania. If I want to buy Romanian crystal, I'll buy Romanian crystal and expect to pay a lot less for it, too.

[FZliveson]

There was a period when Martin Guitar Company was in serious trouble.
When they went back to basics and built the best limited line they could
things turned around. Nothing too flashy....Just solid excellent, world-class
products. Let's hope Waterford/Wedgewood turn the corner. It will be difficult
in times where money is tight and the well-to-do are not spending as much.

[BlueZoo]

Sigh... Another quality product bites the dust and gives China another niche to fill with cheap knock-offs. It's getting so bad that I hate reading Business sections in the newspapers, as they're filled with similar stories. Where will all these people without jobs go? Who will feed the families?