Swarovski, 125, Encounters "Black Swan"

Swarovski, the Classic Black Swan Pendant, encountered the "black swan" incident at the age of 125.

Recently, a media report of "closing 3000 stores and laying off 6000 employees" pushed Swarovski, the Austrian Crystal giant, into the air of public opinion. The next day, Swarovski issued an article to clarify that Swarovski will only reduce the global network of 3000 stores.

Although the Oolong incident has come to an end for a while, in 2020, when we are used to the frequent occurrence of "shop closures, layoffs and giant downfalls", Swarovski, a century old family crystal enterprise, has ushered in a great test of its brand power, marketing power and channel power.

Family differences, seeking to go public, breaking arm transformation, fighting against competition There are still many problems in the future of Shi LUOQI.

Swarovski, 125, encounters "black swan"

Swarovski group, an Austrian crystal accessories brand, is expected to lose a third of its revenue to 2 billion euros this year due to the impact of the epidemic and restructuring plans, with 6000 job cuts and 3000 boutiques to be closed, according to the report of Bloomberg.

As soon as the news came out, Swarovski will close 3000 stores and rush to microblog for hot search. In a few hours, his reading has reached 200 million.

The negative news of the brand often causes netizens to complain in a large area. The topic comment area is full of voices such as "the cutting is good, but the price is unreasonably high", "the quality is not good" and "the artificial crystal is not as valuable as the real gold and silver". At the same time, after seeing too many "scripts" of giants falling into the altar, netizens' empathy is growing. Many netizens said that "foreign enterprises are really difficult, and all walks of life are also difficult", "too many enterprise brands are suffering this year, hoping that the epidemic situation will be over earlier"

As public opinion continues to ferment, Swarovski quickly issued a document to clarify that the CEO only mentioned that Swarovski would reduce the global network of 3000 stores, that is, to close a small number of physical stores inconsistent with the new strategy.

The closure of Oolong has come to an end for the time being, but several signals conveyed by CEO Robert buchbauer in the report deserve attention.

First of all, Swarovski's long-standing "civilian" positioning is about to change. Robert said Swarovski should understand the principle of "less is more" rather than providing all products to all consumers. In the future, Swarovski will adjust its business focus to focus on unique and high-quality products.

Secondly, as a family business of a century, Swarovski, who has never bowed to capital, may step into the capital market. "In order to better cope with the difficulties, the family behind Swarovski intends to give up some of its shares, go public on the stock exchange or seek strategic partners in the short term," says Robert. "It's very painful for everyone, but we have to implement what we should have done a few years ago."

Generally speaking, luxury family businesses will strive to maintain their independence, but in recent years, many enterprises have gone to the road of capital. For example, Bulgari, a jewelry company for more than a century, has been acquired by LVMH group, and high-end down jacket brands such as monkey, Canada goose and Italian silk and leather brand Salvatore ferra * * have been listed.

Also worth pondering is the scene of the Swarovski family members' public "mutual hostility". According to data, about 200 members of the Swarovski family own shares in the company. As for the CEO's comments, family member Paul Swarovski said through the news agency that high-end crystal products still have great potential in the global market. Swarovski's top priority is to find a way to "wake up" consumers, rather than to close stores and lay off employees.

The fierce internal contradictions exposed Swarovski's "not a day of cold" business problems.

From the financial reports in recent years, Swarovski has been in a bottleneck period. From 2014 to 2016, the revenue of Swarovski was 3.05 billion euro, 3.37 billion euro and 3.36 billion euro respectively, with a slow growth trend.

Since 2020, the global luxury goods have been seriously hit by the epidemic, and the demand in Asia and the United States has declined, and Swarovski's sales in the first quarter have dropped sharply. In fact, Swarovski's recent personnel changes are quite frequent. In March 2020, Swarovski announced a restructuring plan, in which Markus langes Swarovski, the family heirloom of 18 years, withdrew from the executive board and no longer ran the company; in May, Swarovski appointed Giovanna Battaglia Engelbert is the first creative director of the company; in June, the company made a large-scale layoff of more than 600 people around the world, causing fluctuations in many departments and management.

Swarovski also plans to merge its jewelry and home accessories businesses with Swarovski crystal world, headquartered in Austria, according to Austrian news agency.

Glory and embarrassment of family business

Swarovski, who has been brilliant for a hundred years, was once a subvert of the jewelry industry.

In 1982, Daniel Swarovski, a glass cutter, invented the world's first electronic gem cutting machine. Through this self-developed machine, Daniel greatly improves the speed and accuracy of crystal cutting under the premise of ensuring the quality of crystal.

Three years later, with the vision of "making diamonds for all", Daniel set up a high-quality man-made crystal factory for raw cutting materials in a small town called Wattens in the foothills of the Alps, which is now the crystal giant Swarovski.

There is an old saying in China that "wealth is no more than three generations", which means that it is easy to keep a business hard to keep wealth. For more than 100 years, Swarovski has gradually become one of the most famous jewelry brands in the world through the operation of five generations of family members, relying on high-purity artificial crystal, advanced cutting technology and excellent original design.

Swarovski is also a favorite in fashion. Famous designers such as Coco Chanel, Christine Dior and Hollywood designers have all snapped up Swarovski's crystal. Hollywood legend Marilyn Monroe once wore a translucent dress full of Swarovski crystals to sing a birthday song for Kennedy. Audrey Hepburn, in breakfast at Tiffany's, stares at the lens of Swarovski Crystal in the window, which has become a Hollywood classic. The ruby slippers in the wizard of Oz are also decorated with Swarovski Crystal.

It is worth mentioning that Swarovski is not a single crystal manufacturer. As early as the first World War, there was a serious shortage of grinding tools for crystal production. After two years of research and experiment, Swarovski developed a crystal grinding method and registered it as tyrolit brand. In 1935, Daniel's son William developed Swarovski's first binoculars, Habicht. Swarovski founded the high-precision optical instrument brand optik in 1949. Today, its product range also includes * sight glass, telescope and photoelectric equipment.

According to the data, Swarovski's three main businesses are crystal business, grinding product tyrolit and optical instrument brand optik. Among them, the most important crystal business is the main source of revenue. In 2019, the sales volume of Swarovski is 3.5 billion euro, accounting for the group's sales of EUR 3.5 billion.

It has been 125 years under the brilliant business model of schlossel. This mode allows Swarovski's crystal technology and business philosophy to maintain a good heritage, but on the other hand, in the new direction and new business expansion, this model seems to bring a lot of resistance to brand vitality.

It is undeniable that Swarovski is excellent in terms of "product force" and "marketing power". Under the positioning of "luxury goods that can be bought for $100", Swarovski not only fully brushes the brand sense of existence, but also appears in the high-end dress of stars and the shopping cart of ordinary consumers by virtue of the star's carrying goods, the agile speed of updating and the frequent "appearance" in the high-end event scenes, almost perfectly realizing the balance between "high-end" and "common people".

But this can only make Swarovski active in the low-end market of mass luxury goods. Compared with medium and high-end brands, Swarovski's brand stickiness and customer loyalty are obviously insufficient, and its bulk crystal wholesale business also has an intangible impact on the brand value. According to the analysis of Bloomberg, Swarovski's transformation may mean withdrawing from the wholesale business, because cheaper crystal products from Egypt and China have greatly reduced Swarovski's profits.

At the same time, the market of imitation crystal luxury jewelry is becoming more and more crowded.

Similar fashion accessories brands, such as pandora pandora, which has become popular in the Chinese market in recent two or three years, and APM, a luxury jewelry brand from Monaco, have further reduced Swarovski's market share.

Whether from the dilemma of the brand itself or the environment of luxury industry, Swarovski's situation seems to be full of worries. According to the Boston Consulting Group report, in 2020, the international luxury market will be hit hard by the epidemic, and the global fashion industry will fall by 29% to 37%.

The epidemic situation in 2020 is more like a big test of brand power, marketing power and channel power of many traditional giants. However, for traditional luxury brands such as Swarovski, how to deal with the changes in the consumer market in the post epidemic era is a more crucial test.