Waterford continues to lose its sparkle

Troubled luxury goods group Waterford Wedgwood saw its losses widen to €29 million in its first half after the company ran out of cash and could not meet demand for its revamped range of crystal products. Laura Slatteryreports.

The company said "genuine consumer enthusiasm" for its products had led to an 11 per cent increase in orders.

However a lack of working capital meant it could not supply these customers.

Back orders surged 29 per cent and the product shortage meant sales at the group fell 10 per cent to €317.4 million in the six months to the end of September.

Its operating losses are more than double the €12 million recorded in the same period last year.

Waterford Wedgwood chief executive Peter Cameron said the group's attempts to turn around its fortunes had "stalled".

The firm will announce the number of jobs that will be cut across the group within four to six weeks after it completes negotiations with unions.

Union officials expect that around 500 jobs will be lost at Waterford Crystal's plant at Kilbarry as part of the cost-cutting programme.

However, Mr Cameron said yesterday that this number had not yet been finalised. Over the summer the group raised €100 million in a share sale.

This included an investment of €83 million by chairman Sir Anthony O'Reilly and his brother-in-law Peter Goulandris, the group's deputy chairman.

However, Mr Cameron said that because it had not received this money until August, it did not have the cash it needed for the start of the Christmas orders season.

Waterford has also been badly hit by the weakening dollar and has spent €44 million over the period servicing a debt of €418 million.

Mr Cameron said that it was "frustrating" and "tedious" that it had not been able to supply the market with its goods, which it has sought to modernise through partnerships with designers such as John Rocha and Marc Jacobs.

The supply problems had now been resolved, he added, and Waterford's order book was now up by an "encouraging" 14 per cent on last year.

However, he admitted that the group's ability to make a full-year operating profit was "at risk".

It is hoping to raise a further €100 million through a preference shares offer, to which its chairman and deputy chairman have committed €17 million.

Talks with an unnamed financial institution and related third parties to fund the rest of the offer are ongoing.

"With the capital markets in such turmoil, they, like everyone else, need to look at what they are doing," Mr Cameron said.