x Abu Dhabi, UAE Thursday 20 July 2017

Crystal clear these Swarovskis are gems to treasure

Swarovski is the world's leading producer of cut crystal. For 117 years the business has struggled between its desire to operate in secrecy and its needs for publicity.

Swarovski is in the top tier of luxury brands. Jeff Topping / The National
Swarovski is in the top tier of luxury brands. Jeff Topping / The National

Swarovski is the world's leading producer of cut crystal. For 117 years the business has struggled between its desire to operate in secrecy and its needs for publicity.

 

What's the story in a nutshell?

The founder, Daniel Swarovski, settled in Wattens, an Austrian alpine town of 8,000, to hide his proprietary cutting technology from rivals. A century later, a splashy push into retailing and designer fashion has made Gernot Langes-Swarovski, his great-grandson, a billionaire.

 

I haven't heard of him. Aren't all billionaires famous?

"Swarovski is a family-owned and run business and not obliged to disclose anything beyond the legal and regulatory obligations," the company said in an e-mailed statement. "Any numbers and valuations from third parties are purely speculative." Mr Langes-Swarovski's stake is worth US$1.3 billion (Dh4.77bn) - yet he has never appeared on an international wealth ranking. "Gernot is the major shareholder of Swarovski," said Reinhard Berger, the president of the Liechtenstein-based investment company Valluga, which compiles an annual report on Austrian, German and Swiss wealth. "His son now controls daily operations, but in terms of strategy he is the informal head of the clan. They have a smaller group of family members who decide on strategy and he's in charge of supervising its implementation." Mr Langes-Swarovski's holdings outside of the family business include vineyards in China and Argentina and a hotel in Canada, which add more than $90 million to his net worth.

 

Why have they remained as a family business?

"Family companies were and are the quality seal of our economic and social system," Mr Langes-Swarovski wrote in the company's 2010 Sustainability Report. "Thanks to their flexible structures we are more alert, innovative, quick, flexible and systematic than other types of company."

 

So how have they shown this nimbleness?

Two decades ago, Swarovski was best known for its collectible crystal figurines and other creations, such as the dress worn by Marilyn Monroe as she sang Happy Birthday to John F Kennedy in 1962, which was adorned with 10,000 Swarovski gems. The company began to expand its branding efforts in 1999 by opening retail stores and creating partnerships with fashion brands. Led by Mr Lange-Swarovski's niece, Nadja, the strategy targeted designers such as Jean-Paul Gaultier and Alexander McQueen, providing them with free crystals in exchange for marketing exposure. Today, Swarovski has 2,200 shops. Its crystals are attached to garments from brands including Giorgio Armani and Victoria's Secret. Its sponsorship of award shows and parties, and product placement in films, such as the James Bond franchise, has catapulted Swarovski into the top tier of luxury brands, according to Katie Mason, an analyst at the London-based strategic branding consultancy XPotential. The custom creations that began in the 1970s now include a $128,000 crystal toilet and a $9,000 Mickey Mouse figurine, and have helped to engender Swarovski's cult following.

 

* Bloomberg Businessweek