And an Unhappy New Year to you, too. I just read an AP report that says Waterford Wedgwood UK has filed for bankruptcy. I am in mourning at this news, but not really in shock. For, you see, when I worked for Wedgwood some 17 years ago [it can't really have been that long, can it?--Ed], I saw it coming. Yes, way back then.
Sit back and get comfy, and I'll tell you the story. Waterford purchased a controlling interest in Wedgwood in 1986, which was implemented at the retail level in 1990. Talk about Jonah swallowing the whale! At the time, Wedgwood was the much bigger company of the two, any way you compared them: total assets, market share, physical size, worldwide presence, you name it. But the deed was done, and Jonah's had indigestion ever since.
Unfortunately for all of us who love the high quality and tradition of fine things made in the British Isles, the ownership of the combined company put ex-auto company executives in charge of restoring profitability. Their solution was to lower labor costs. [Where have I heard THAT before?--Ed.] How did they do that? They fired all the most experienced master cutters and craftsmen and women.
I was not the only American working for Wedgwood in Europe who screamed bloody murder at this, but I probably was the loudest. Every one of us who worked in the Army and Air Force Exchange Services Wedgwood concession shops (located on bases in West Germany, Belgium, Italy, and Greece) tried to explain to the "powers that be" that while Americans in particular love a bargain, they also have a keen appreciation for quality--and are willing to pay more so long as they perceive they are getting excellent (not just good) value for their money. Just as the Frugal Gourmet explained that the cheapest was not always the most frugal, and that quality entered into any calculation of "value," I tried to tell anyone in the hierarchy that Wedgwood's prices in and of themselves were not the problem with Wedgwood's declining sales.
As long as buyers perceived that the quality of their purchases was extremely high for the money they spent, they'd be willing to pay more and buy more. On the other hand, since Americans in particular live and die by the word "sale," I also noted that Wedgwood's sales might actually improve thusly: if prices were raised, then cut back a bit less than the increase, and the decrease was called a "sale," Americans would buy--happily. Repeatedly.
Well, no one in the hierarchy liked that. They were of a mind that the word "sale," in and of itself, "decreased the value of the brand." I was reasonably disgusted by this. People who do not understand to whom they are marketing are not going to have long-term success. And they didn't.
The problems increased in succeeding years. For as the manufacturing of both china and crystal was outsourced to less expensive labor markets (in places like Poland and Hungary), the buyers' perception of the quality of the merchandise went down. The prices, however, did not. I do not denigrate the craftspeople of Poland, Hungary, or anywhere else where WW UK outsourced labor. All those places have long and honorable crystal-cutting and china-making histories of their own. But they are not Wedgwood. They are not Waterford. The cachet of place cannot be underestimated in trying to sell fine china and crystal to buyers all over the world.
The upshot? Customers became increasingly unhappy with the quality of the merchandise they were being asked to buy. I cannot tell you how many emails and phone calls and in person conversations I've had with people who said they weren't going to buy any more Waterford unless it could be proved that what they were buying was MADE IN IRELAND. Ditto for Wedgwood and MADE IN ENGLAND.
Heck, I had that reaction myself. My biggest Wedgwood china set used to have the floral border motifs painted by hand. Every piece had three-dimensional texture; every piece matched; yet every piece was unique. However, it took me a long time to complete my set. The last few pieces I have were made after production had switched from hand-painting to applying lithographs--just a fancy word for "decals." You may or may not be able to see the difference, but I assure you: I can. And do. And I don't like it, not one bit. So I don't use those pieces except in dire emergencies. They don't look right. They don't look like, well, Wedgwood.
Worse, though production costs decreased greatly, the retail prices never did. So I feel as though I got ripped off merely because I wanted to complete my set. [It's moot now, anyway, as the pattern went entirely out of production about a year after I bought my last plate. And the prices on the secondary market, especially for the older, hand-painted pieces, are exorbitantly more than I can afford.--Ed.]
This is truly a sad day. Not only is the Waterford showroom in Waterford Town, Ireland, closed--which will have a ripple effect on the entire Irish economy, because tourism is what put Waterford Town on the travelers' agendas--Wedgwood itself may be sold off, piece by piece, if a reorganization plan cannot be implemented, or a buyer willing to keep running the company cannot be found.
I know how to fix it. I wonder whether Warren Buffett would loan me the $2-4 billion it would take to do so. Probably not. Damn.
As to WWJD ("What Would Josiah Do?")--well. Let me first note that in England, Josiah Wedgwood is regarded the way Thomas Edison is in the USA. He wasn't just a master potter and craftsman. He was a scientist, an inventor, and a shrewd businessman. He is largely responsible for the rise of the stable middle class, for he gave them things to buy with their new, Industrial-Revolutionarily-earned wages. He created AND satisfied increased aspirations. He's probably doing at least 78 RPM in his grave right now. If he were here, I daresay he'd be taking off his wooden leg and beating the lunkheads who so richly deserve it for running such a fine and storied company into the ground.
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