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China & Earthenware Market Report Plus 2009
Key Note Publications Ltd, May 2009, Pages: 93
The collapse of Waterford Wedgwood in January 2009 threatened to wipe out almost a quarter of the UK's table-china manufacturing capacity at a single stroke, when it became the latest in a growing list of iconic British companies to succumb to the global economic slowdown. Saddled with debt and unable to persuade its lenders, led by Bank of America, to postpone its interest payments for a fourth time, the administrators were called in to Waterford Wedgwood, which employs around 7,700 worldwide, on 5th January 2009.
Garry Oakes, assistant general secretary of the union Unity, said he was not surprised by the problems Wedgwood faces, but believed it was still possible to run a profitable pottery in the city. At the same time, the Stoke-on-Trent Central MP Mark Fisher was quoted as saying: `This is the worst possible news, not only for the 1,000 families affected, but also for the whole of North Staffordshire and the whole of the ceramic industry. Wedgwood is the brand leader and an international flag carrier, not just for Stoke-on-Trent but for the whole of the industry.' The blow to the area came after Spode, which is also situated in Stoke-on-Trent, went into administration in November 2008, along with its sister company Royal Worcester.
One of the factors contributing to the downfall of these traditional British companies was the move away from formal dining. Efforts had been made to introduce more contemporary lines that appeal to a modern market; for example, by linking up with designer names to portray a more fashionable image. However, it could be argued that it was a mistake for brands such as Waterford Wedgwood to try to appeal to a mass market, rather than retaining their exclusivity. It has also been suggested that a mass move of production overseas, in order to minimise costs and maximise returns for shareholders — to whom the now publicly listed companies are beholden — has done much to damage the reputations of prestigious brands, which can no longer claim to be `Made in England'. Indeed, there are companies that have kept production in the UK and enjoyed considerable success in increasing sales in the difficult trading conditions. Emma Bridgewater Ltd is a prime example, having more than doubled its pre-tax profit in its financial year ending April 2008. The company's factory shop in Hanley took more than five times the previous year's takings in its January 2009 sale, showing that the demand is still there.
It cannot be denied that there are difficult times ahead for businesses and individuals alike. In January 2009, the International Monetary Fund (IMF) warned that the British economy would sink faster than the rest of the developed world. It slashed its prediction of world economic growth in 2009 from 2.2% in November 2008 to just 0.5% in January 2009, the weakest since the Second World War, but by March, it was forecasting a contraction of between 0.5% and 1%. The ceramics industry is no stranger to difficult trading conditions, yet the knock-on effects of the fall of Waterford Wedgwood are an unknown entity. Potteries historian Fred Hughes, commenting on the situation said: `There's no historical precedent for this. We've never been in this situation before. That's not to say it's the end of the road. In a sense it's a wake-up call to make readjustments, and history tells us we are at our best when making those adjustments.'
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