Of late the flagship company has gone from crisis to crisis, writes Chris Dooley, Industry and Employment Correspondent
Waterford Wedgwood chief executive Redmond O'Donoghue tells a story about an unusual question he was once asked on a business trip to the US.
"What's the name of the city where you make this wonderful Waterford crystal?" he was asked.
"Em, it's called Waterford of course," Mr O'Donoghue replied.
"Gee, isn't that swell," his questioner responded. "Your company is so successful they named a city after it!"
If ever a story illustrated the strength of the Waterford brand, then that was it. Waterford crystal is far more famous than the Viking city of Waterford itself.
Even an iconic brand name, however, is no guarantee of permanent success.
It is ironic that on the day that the Central Bank was forecasting continuing success for the Irish economy, a flagship enterprise for that same economy was announcing large-scale job losses.
Prior to this, the company's story in many ways mirrored the path taken by the State to economic success over the past two decades.
In the 1980s it led by example in ditching old-style management-union confrontation in favour of a partnership deal that saved the company from going under.
Workers who had earned a reputation for militancy began co-operating with necessary but painful change that has seen the company shed more than 2,000 Irish jobs in the past 18 years.
In 1997, when the Celtic Tiger economy was in full stride, Waterford Crystal was launching one of its most successful marketing initiatives - the new John Rocha range of products.
As the economy continued to expand, so too did Waterford Wedgwood, announcing an eighth straight year of growth in sales and profits in its 2000 annual report.
Catching the mood in a foreword to the document, Mr O'Donoghue declared that some outsiders might have expected an "inevitable slowing" in the group's progress.
"Not a bit! Indeed, if our group had to adopt a corporate motto at this stage in its history, I would suggest it be: 'The best is yet to come'!"
The downturn in the global and Irish economies was just around the corner, however, and inevitably the company took a hit.
The feel-good factor that had enveloped the company for years came to an abrupt halt in September 2001 when Waterford Crystal chief executive John Foley announced short-time working.
After this, the stories of Waterford Wedgwood and the Irish economy diverge. While the economy has recovered, one of Ireland's best known brands has lurched from crisis to crisis.
Most analysts agree that the group's fortunes are essentially two-fold: a weakening dollar combined with falling sales.
Waterford Crystal manufactures in euro economies, but sells 70 per cent of its product in the US.
A company spokesman points out that two years ago a euro was worth 90 cents; now it is worth $1.30. "Put simply, that means that two years ago we only had to make 90 cents in the US to get our euro back, now we have to make $1.30."
Increasing prices to recoup the resultant losses was not considered a viable option; the company increased prices in February for the first time in four years.
While the decline in the dollar has had a huge impact on the group's revenues, independent analysts say falling sales are also a major contributor to its problems.
"The sales projections in recent months have been particularly weak," said Stuart Draper, head of research with Dolmen Stockbrokers. "In January and February they were down 11 per cent year-on-year, while for the year ending March 31st they are down 6 per cent. So there are significant issues there even if you exclude the dollar effect."
Even if the dollar recovers, then, the group will continue to struggle unless it can catch up with changing consumer trends.
The luxury tableware items made by Waterford Wedgwood do not have the same appeal for young consumers as they did for previous generations. As Mr Draper puts it bluntly: "Some of the range is acknowledged as being irrelevant in the modern marketplace."
These trends have not, of course, escaped the company's notice. The John Rocha association was an early and highly successful attempt to modernise the crystal brand and broaden its appeal.
Similar link-ups have since been established with the likes of Jasper Conran and Vera Wang, and discussions with a number of other designers are taking place.
Waterford is also moving its products into the so-called "big box" stores in the US where, as one observer put it yesterday, "it wouldn't have been seen dead" in the past. Previously Waterford Crystal could only be found in stores such as Bloomingdales or Macys. By the end of this year, it will be available in 82 outlets of Bed Bath & Beyond.
There is no doubt, then, that even before the major restructuring announced yesterday, the group has been confronting its problems in the market. Whether it is making changes at the pace required is another matter. As Neil Clifford of Goodbody Stockbrokers points out, the group is not afraid to make changes but it appears to consistently be overtaken by events.
At least the declining sales problem is something the group can directly address; to some extent the currency problems it faces are outside its control.
It can, of course, seek to reduce its dependence on the US market, but as a spokesman for the company emphasised yesterday, there are no ready-made alternatives in Europe.
The picture is not entirely bleak, however, though the hundreds of workers about to lose their jobs in Dungarvan and Waterford city will take little comfort from the fact.
Waterford Crystal, through its Waterford and Marquis brands, still leads a 120-competitor field with a 40 per cent share of the US premium crystal market.
The Waterford Wedgwood group still sells €800 million worth of products each year. And the crystal plant at Kilbarry in Waterford city is set to return to full production having operated below capacity for some time.
The 1,000 workers who remain, however, will hope the restructuring programme announced yesterday is the one that will turn the group around.