Three-year agreement signed by Wedgwood and designer Paul Costelloe

Wedgwood, the fine bone china and earthenware subsidiary of Waterford Wedgwood, has signed a three-year contract with international…

Wedgwood, the fine bone china and earthenware subsidiary of Waterford Wedgwood, has signed a three-year contract with international designer Mr Paul Costelloe to develop and design four ranges of tableware. This follows successful creations by Versace for Rosenthal and by John Rocha for Waterford Crystal.

Mr Costelloe, who caused an uproar in the Irish fashion industry in October when he said that style is not a natural characteristic of Irish women, will create the new tableware ranges under the Paul Costelloe and Wedgwood trademarks.

He is being paid an unspecified upfront fee. On top of that, he will receive a royalty payment on the sales. Wedgwood said it will be "investing considerable resources" in the new ranges, targeting both new customers and new markets. Asked to quantify the investment, Wedgwood's chief executive, Mr Brian Patterson, said it is "early days, some initial designs have been done", but final production levels have not yet been decided. Wedgwood chose Mr Costelloe from a number of well-known designers because he is known for his stylish vision and will appeal to the younger customer, said Mr Patterson.

Mr Costelloe's customers included Princess Diana. He was nominated British Designer of the Year in 1989. Based in London, he has boutiques in a number of outlets, such as Brown Thomas in Dublin and Fenwicks in London, as well as concessions in eight House of Fraser stores in Britain. Commenting on the design agreement, Mr Costelloe said: "Tableware has become more aligned to the world of fashion in recent years. The agreement with Wedgwood allows me to continue my work in a different medium while satisfying the new demand for seasonal tableware".

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He sold his fashion clothing business, United Fashion, to Silk Industries for £1.25 million in September 1997, but he continues to work as designer under a licensing arrangement. Silk's latest results showed an interim pre-tax profit of £2,754,000 sterling, reflecting continued profitability in the core Silk companies but a loss of £202,000 in Paul Costelloe. Silk described the trading period as "disappointing and frustrating". Mr Costelloe, however, has predicted that his business will make a profit over the next 12 months. Wedgwood has been targeting younger consumers and developing less formal tableware, both to complement its formal ranges and to satisfy increased demand for informal tableware. The company said this policy has had significant success in both the new and the traditional markets. It has launched "Sarah's Garden", a product celebrating Wedgwood's history. This product has so far generated £3.6 million in sales. In a further development, Wedgwood is currently working with Bulgari, the Italian jeweller, to launch new tableware and giftware collections. These are scheduled for launch next February.

Rosenthal, the German porcelain-manufacturing subsidiary of Waterford Wedgwood, has a licensing agreement to manufacture and sell ranges of Versace tableware and crystal. Sales to date amount to £20 million. Waterford Crystal last year launched the John Rocha collection, which did twice as well as expected. Phase two of the collection, including new stems, gift items and lighting, was launched last month.