The Swarovski crystal empire, renowned for its opulence and grandeur, finds itself engulfed in a bitter family feud that threatens the company’s future. The devastating impact of the coronavirus pandemic has not only left Swarovski’s headquarters in Austria deserted, but it has also brought to the forefront deeper underlying issues within the company.

Established 125 years ago by Daniel Swarovski, the company has flourished as a diversified business, offering an array of products ranging from rhinestones and binoculars to exquisite jewelry and crystal figurines. However, CEO Robert Buchbauer acknowledges that drastic transformation is imperative in order to overcome the challenges ahead.

Buchbauer reveals that the allure of Swarovski’s crystals has waned among corporate clients due to fierce competition from cheaper alternatives, most notably from China. Compounded by the pandemic-induced economic downturn, the company has suffered significant deficits in sales.

To confront these mounting obstacles, Buchbauer proposes a strategy that aims to elevate Swarovski’s crystals to a more exclusive status. This involves reducing the overall quantity of products produced while focusing on creating larger and more vibrant pieces that can be sold at a higher price point. Moreover, the company intends to gradually phase out mass-market offerings like Swarovski-crystal adorned manicure sets and mobile phone cases. As part of this restructuring plan, Swarovski plans to shutter approximately 750 out of its 3,000 stores worldwide, leading to the unfortunate downsizing of around 6,000 employees.

However, some members of the Swarovski family voice concerns that customers who have already migrated to more affordable alternatives will not be inclined to pay higher prices for the artisanal crystals. They fear that implementing Buchbauer’s proposed changes may inevitably result in the downfall of the company.

The ongoing feud within the family revolves around the company’s ownership structure. Swarovski stands as one of the few remaining completely family-owned luxury goods businesses. Nonetheless, family members unanimously agree that the current structure hampers the company’s ability to expand globally. Buchbauer’s proposition to consolidate all operations under a holding company has won the support of shareholders holding approximately 80 percent of the shares. However, the remaining family members, who possess about 20 percent of the shares, have initiated arbitration proceedings in an attempt to invalidate Buchbauer’s plan.

The persistent conflict has caused frustration and bewilderment among Swarovski employees, particularly as they witness family members flaunting lavish vacations on social media while they face the worry of potential layoffs. Selina Staerz, a representative for the union, expresses that employees no longer feel valued as the backbone of the company. In a region heavily reliant on tourism, where Swarovski stands as the largest employer, displaced workers may encounter difficulties in finding alternative employment.

Although Buchbauer assures that there will be no further job cuts beyond 2021, rumors circulate suggesting the possibility of relocating the entire operation to Switzerland. Additionally, employees have lost faith in the company’s capability to position itself as an accessible luxury brand. Staerz emphasizes that the affluent elite have the means to purchase diamonds, rendering Swarovski crystals non-essential.

As the family feud continues to unfold, the fate of the Swarovski crystal empire trembles on the precipice. With the company grappling with substantial challenges and internal discord, its future remains ambiguous. Whether Swarovski can regain its former radiance and find resolution amidst its familial conflicts remains to be observed.

Useful links:
1. https://www.schonmagazine.com/expert-what-happened-to-swarovski/
2. https://www.businessoffashion.com/articles/intelligence/is-swarovskis-rebirth-too-little-too-late