Administrator called in as Waterford Wedgewood collapses

Published on Monday 5 January 2009 09:49

AILING crystal and china maker Waterford Wedgwood today called in administrators to its UK arm and parts of its Irish business.

The group – best known for Wedgwood pottery, Royal Doulton and Waterford crystal – collapsed after talks over a possible investment in the business failed and lenders' patience ran out.

Chief executive David Sculley said he was "optimistic" a buyer for the businesses could be found.

Non-executive chairman Sir Anthony O'Reilly added: "We are consoled only by the fact that everything that could have been done, by management and by the board, to preserve the group, was done."

The business – which had been in talks with a private equity investor over much-needed funding – will continue to trade while discussions continue.

The UK business employs around 600 staff at its manufacturing base in Barlaston, Stoke-on-Trent, 170 people across 19 retail stores and 60 people in its London head office. The Irish arm has around 800 staff based in Waterford.

The appointment of administrators comes despite attempts to revive the struggling business since 2005 by majority owners Sir Anthony and Peter John Goulandris. Sir Anthony also controls media firm Independent News & Media, owner of the Independent newspaper.

As well as axing thousands of jobs, Waterford has embarked on marketing initiatives and launched new products in a bid to increase the appeal of its luxury goods – signing up stars such as chef Gordon Ramsay and designer Sir Terence Conran to launch more modern lines.

It introduced products such as Wedgwood's Eternity China, which is much stronger than traditional china and able to stand up to use in microwaves and dishwashers.

But the firm suffered from funding issues and was weighed down by the cost of its restructuring efforts. In the year to April, Waterford made a pre-tax loss of 241 million euros (230.7 million), and carried net debt of 488 million euros (467.2 million).

The firm was also hit by the onset of the financial crisis in the autumn, with sales in October 19% down on the comparable period in 2007.

Sir Anthony said the board and executives had received "remarkable support" in efforts to salvage the business from highest levels from the Irish and UK governments and certain Irish banks.

"The board has acted tirelessly in its efforts to resolve the company's issues as a going concern," he added.