Wedgwood sells All-Clad to French rival for $250m

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The Independent Online

Waterford Wedgwood has sold its US-based cookware business, All-Clad, to a French rival for $250m (£136m), it said yesterday, but warned that earnings for the year would miss expectations by 15 per cent after margins were squeezed on sales.

Waterford Wedgwood has sold its US-based cookware business, All-Clad, to a French rival for $250m (£136m), it said yesterday, but warned that earnings for the year would miss expectations by 15 per cent after margins were squeezed on sales.

Wedgwood bought All-Clad for $110m in 1999 and has now agreed an all-cash deal with Groupe SEB. The money raised from the disposal will help reduce Wedgwood's €380m (£254m) debt pile.

News that the group has suffered from pressure on its margins in the final quarter of last year sent shares down 1p to 12p, nearly 8 per cent. While sales were in line with expectations, Wedgwood said it had to sacrifice margin in order to maintain volumes and market share in Germany, where the market for Wedgwood goods has been "challenging". The result of the margin pressure, and additional pension costs, means that earnings before interest, tax, depreciation and amortisation for the year ending 31 March will be about €68m, some €12m less that had been expected by shareholders.

Sir Anthony O'Reilly, the chairman of Wedgwood and of The Independent's parent, Independent News & Media, yesterday said All-Clad had been "well-bought" and had now been "well-sold". "This transaction transforms our balance sheet. The proceeds will put us in a position to take control of the future direction of the company, to reduce debt dramatically and to post a substantial capital gain while simultaneously investing to support sales without sacrificing margin," Sir Anthony said.

The company also announced it had appointed the consultancy company Accenture to find ways of stripping out costs in the group's manufacturing processes and free up working capital in the business. A spokesman for the company denied, however, that this meant jobs were under threat. The company closed one of its factories in the Potteries, causing concern that it would transfer its production offshore. Royal Doulton, a rival ceramics company, has recently closed its factories in Staffordshire, but Wedgwood yesterday said it was likely to increase production in its Staffordshire factory. The review will look at ways of releasing capital tied up in products that have not yet hit the manufacturing process.

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