Waterford Wedgwood pays €22m for mail order company

WATERFORD WEDGWOOD yesterday bought the Cork-based Cash’s and Shannon mail order business from Fairway Investments Limited for €22.04 million.

The move came as Davy Stockbrokers predicted Waterford Wedgwood’s first half results, due November 13, would confirm it is on track to deliver a 25% improvement in earnings per share for the full year, from last year’s post-September 11 depressed levels.

Waterford Crystal chief executive, John Foley said he was excited about the purchase, which would provide significant opportunities for growth.

Based in Togher, Cash’s and Shannon employ close to 60 people in their warehousing and call centre operation, which Mr Foley believes will, in time, be integrated with Waterford’s own online sales site waterford.com.

“This is a strategic move for us which brings us closer to our customers and provides a valuable research laboratory for our new product development programme. We will know within days of brochures being sent out how a new product is going,” he said.

The purchase price of 22.04m is payable in 5.5m Waterford Wedgwood stock units and 16.54m in cash, of which 7.56m has been deferred until January 2003.

Cash’s was bought by Fairway from the Switzer Group in 1989 in a management buyout led by Michael O’Driscoll who remains as chief executive of the company along with his deputy Michael Stiles. The Shannon section of the company was purchased from Aer Rianta in 1998 by Fairway.

The companies mainly sells gift products to the US market. The beneficial directors of Fairway Investments are Michael O’Driscoll and Dermot O’Mahony.

Sales and operating profits for the business, for the year ending April 30, 2001, were 27m and 3.2m respectively. The business has in excess of one million names and addresses on its American mailing list and 50% of sales are Waterford Wedgwood products.

Waterford Wedgwood group chief executive, Redmond O’Donoghue said: “The American department store has been the backbone of Waterford Wedgwood’s US distribution for many years, we continue to have great faith in the future of this channel and we have robust plans to grow our business with the great department stores of America in the coming years. Waterford Wedgwood plans to inject other group brands into the Cash’s and Shannon direct marketing vehicle which also sells Belleek and Lladro.