By Calvin Palmer
KPS, the New York-based private equity company, yesterday bought Waterford Wedgwood for an undisclosed sum.
The ailing china and crystalware company collapsed into administration in January after lenders, led by Bank of America, called in their loans.
The deal transfers many Waterford Wedgwood assets out of receivership, including the china factory in Barlaston, Stoke-on-Trent. But any hopes that production would be increased in the Stoke-on-Trent factory were soon dashed.
Michael Psaros, co-founder of KPS Capital Partners, said the strategy for turning round the loss-making company was to cut costs by streamlining its back-office operations and shifting more production to low-cost countries.
Psaros said: “It is all based on costs and we are not assuming any revenue growth to achieve profitability.
“We intend for Waterford Wedgwood to be an acquisition platform in this industry and we’re prepared to invest very significant capital in helping to grow the hell out of the business.”
Psaros told The Daily Telegraph: “We are a hard-core, full body contact, operations-driven turnaround operator.”
“Our approach is the Pittsburgh Steelers approach – smash-mouth football. We put our defense on the field first and then put our offense on,” he explained.
KPS will invest £93 million ($135.5 million) in the company. It will be “unencumbered by the £750m ($1.072 billion) of debts and pension liabilities.
WWRD Holdings Limited, a company formed by KPS, has bought the Waterford Wedgwood’s assets around the world apart from its German and Irish operations. However, it has bought Waterford Wedgwood’s inventory and intellectual property in Ireland.
It has also bought subsidiaries in Japan, Indonesia, Hong Kong, Taiwan, Singapore and Australia.
Psaros said Waterford Wedgwood had been shifting its Waterford crystal production to Germany and Slovakia, and its Wedgwood and Royal Doulton china production to Indonesia but “it didn’t do it fast enough”.
“We are going to accelerate transfer of activity from the UK to Indonesia, where labor is 85 per cent cheaper than the UK,” he said. “Real works of art and highest-end products will still be done in Barlaston.”
Former L’Oréal executive Pierre de Villeméjane will run the company.
Villeméjane is no stranger to the Potteries. He used to work in Stoke-on-Trent for Cookson supplying customers in the ceramics industry, including Wedgwood.
The 42-year-old Frenchman said that the deal was an “historic moment” for the company and the only solution for the group, saving more than 3,700 jobs and preserving what he described as an important part of both Irish and British history.
He said that the deal even had the blessing of the Wedgwood family, who had told him that they were thankful that the brand would continue.
[Based on reports by The Financial Times, The Daily Telegraph and The Times.]
