Family feud rages as Swarovski empire loses its lustre

Overall revenues for crystals are projected to plummet by 30 percent, from 2.7 billion euros ($3.3 billion) last year down to about 1.9 billion

Wattens: Exactly 125 years after founder Daniel Swarovski developed a machine to cut glass to shimmer like diamonds, his great-great grandchildren now reign over a diversified operation — offering rhinestones to fashion brands, binoculars to hunters, and jewellery and crystal figurines of characters from Mickey Mouse to Princess Leia.

But CEO Robert Buchbauer says drastic change is now needed. “We are forced to reimagine and rescale our entire Swarovski business,” Buchbauer tells AFP at the Wattens HQ, framed by a selection of Swarovski-embellished robes.

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Swarovski’s crystals may have adorned the outfits of celebrities like Beyonce and Marilyn Monroe and been used by designers including Christian Dior, but Buchbauer says among business clients they are losing their lustre. Crystals made by competitors in China sparkle just as brightly — for as little as one percent of the price.

Buchbauer says, the pandemic has added “sales shortfalls on a gigantic scale”. Overall revenues for crystals are projected to plummet by 30 percent, from 2.7 billion euros ($3.3 billion) last year down to about 1.9 billion.

Long-planned, sweeping cuts have only become more urgent, Buchbauer says. He wants to make Swarovski’s crystals more exclusive, producing fewer, larger and more colourful products that can be sold at a higher price.

Mass-market products like manicure sets and mobile-phone cases graced with Swarovski crystals may have given the company a wide appeal, but they have no place in the future, he says.

Neither will around 750 of its 3,000 stores worldwide. The downsizing will also mean laying off about 6,000 employees. he plans are already under way, with about 1,200 employees in Wattens losing their jobs this year and a further 600 posts expected to go in 2021. Unless his plans are executed in full, Buchbauer says, “we’ll end up among the losers.”

Paul Swarovski, a shareholder and former member of the executive board, says he wants to stop Buchbauer’s plans “before everything goes down the drain”. He’s been joined by Nadja Swarovski, one of three members of the executive board, as well as her father Helmut and her uncle Gerhard. Paul Swarovski insists Buchbauer must go.