Waterford Wedgwood, the Irish crystal and china group, is cutting 1,400 jobs after a "severe downturn" in demand following the terrorist attacks on the United States.
Most of the redundancies will be in Britain, with 500 going at the Wedgwood china business in Stoke-on-Trent and a further 200 being cut at a crystal manufacturing plant in Stourbridge, West Midlands, which will be closed. Other staff reductions are being made in Ireland, Germany and in Asia, with 400 job losses in the group's retail division.
The luxury goods group had warned of weaker trading conditions at the time of its interim results on 12 September. It said yesterday these conditions had continued with core September sales down 15 per cent on the same month last year. Sales for the 10 months to 31 October were 4.5 per cent below estimates.
Though sales have been badly hit in the United States, the group said patriotism there was running high. One of its biggest sellers since 11 September had been a $100 American flag paperweight, it said.
As well as the staff cuts – equivalent to 14 per cent of the group's workforce – Waterford Wedgwood is revamping its retail operations. In the UK, 40 underperforming concessions will be closed but the remainder will be completely refurbished. Ten stand-alone stores will open in premium locations.
The marketing budget is being increased by 15 per cent.
The restructuring will cost 60m euros (£36m) but result in annual incremental profits of 43m euros.
Davys Stockbrokers forecasts that operating profits for the full year will be 70m euros compared with 110m euros last year. After exceptionals it is forecasting a pre-tax loss of 24m euros. However, 2002 profits are forecast to be "substantially higher" due to the lower cost base.
Redmond O'Donoghue has been named chief executive. He was chief operating officer. Tony O'Reilly junior, one of the sons of the group's chairman, Sir Anthony O'Reilly, has been appointed chief executive officer of the Wedgwood division. He was previously deputy chief executive. The shares closed 4.5p lower, at 37.5p.Reuse content