Waterford Wedgwood sales slump 10%

Luxury goods group Waterford Wedgwood unveiled more disappointing trading figures today after seeing like-for-like sales slump 10% in October.

The latest fall emerged as Dublin-based Waterford said it made operating losses of €21.4m for the six months to September 30, against profits of €4.2m.

Chief executive Redmond O’Donoghue said conditions remained difficult and stressed the importance of a turnaround plan announced in June.

As part of the overhaul, Waterford has cut costs, substantially reduced inventory levels and announced price rises for early next year.

At the same time Waterford is considering a takeover of Royal Doulton after announcing last month that it was in talks about a possible deal.

Mr O’Donoghue said the move presented an opportunity to increase volumes at its factories without substantially increasing production costs.

He added the company continued to hold market-leading positions but that it had been affected by a softening in consumer demand in the UK and the United States, as well as from a weakening in the US dollar.

Mr O’Donoghue said: “At this stage last year, we reported some signs of improvement. Unfortunately, the improvement proved to be a temporary respite and the six months to September 30 have been very difficult.”

Trading since the end of the half year has remained tough, although the company said indications on trading in November suggested some improvement.

Sales of the group’s crystal brands fell 7.1% to €120.8m during the six month period, mainly due to weaker trading for Waterford Crystal in the United States.

In the ceramics division, sales were down by 7.1% at €158.4m, although sales in the important Japanese market remained level.

Despite the problems Mr O’Donoghue said he remained confident in the company’s prospects.

He added: “We have considerably strengthened senior management and mapped out our plan for growth. We are committed to implementing this strategy as quickly as possible.”

At the bottom-line, results were boosted by an exceptional profit of €103.2m from the sale of All-Clad, the US-based cookware business. That ensured profits of €8.9m, compared with losses of €44.8m a year earlier.