PARIS — Swarovski, the ubiquitous crystal charm company, has been refining its strategy over these past lockdown months and is set to emerge with a fresh, higher-end lifestyle proposition early next year.
Under the direction of chief executive officer Robert Buchbauer, who was propelled to the helm of the group’s entire crystal business in April, the 125-year-old company is streamlining collections and distribution channels, and pulling out of the seasonal rhythm of product launches with an eye to longer life cycles — organized around distinct families, or pillars.
Buchbauer spoke to WWD about this evolution.
“In all challenges lie opportunities, and with the COVID-19 crisis, we’ve had the opportunity to further develop our strategy,” he said in a phone interview.
Taking over all of the crystal business this spring has allowed him to seek a more unified approach.
“I’m really working on making the company one Swarovski and abandoning the divisional approach that we’ve had over many years and leading everything with one team, one functional team that takes care of all aspects of the business,” he said.
Swarovski’s crystal business sells a wide product assortment that ranges from crystal components that are sold in bulk to figurines and even interior lighting, but finished jewelry has been a major revenue driver. The crystals business is the main activity of the larger Swarovski group, which also sells optical tools and industrial machines and generated sales of around 3.5 billion euros last year.
Around 6,000 employees were laid off over the summer as part of a broad overhaul, and the company employs around 25,000 people worldwide.
The crystal brand aims to reposition its products in the attainable luxury space, away from the more “stuck-in-the middle premium positioning” that had become a bit blurred over the past few years, in Buchbauer’s description.
Fast-fashion labels such as Zara, H&M and Mango have muscled into the competitive, accessibly priced space, and executives found it was growing increasingly challenging to remain competitive at the lower price levels given the time it takes to produce crystals. On the other end, the fine jewelry and hard luxury segments were also ruled out.
The label decided to double down on its roots while overhauling its portfolio, drawing on archives from over half a century ago to find designs to reinvent and reinterpret for contemporary consumers. Borrowing a page from the luxury industry, the idea is to reignite appetite for crystals by building a product assortment around more classic, timeless designs with the potential of becoming iconic — the way hard luxury brand like Cartier have built products around the Love bracelet, or Bulgari with its Serpenti watches.
“We also have the clear goal of being longer-lasting, so we’re moving away a bit from that seasonal in-and-out approach that so many industries have applied over the past decades,” Buchbauer noted.
“We want our creations to be much more visible to follow a longer life cycle than the previous ones,” he said of the portfolio overhaul.
Giovanna Battaglia, who joined the company’s business-to-business components activity in 2016, has risen to take over creative direction of the company. Battaglia, who started out as a model before moving on to magazines, has extensive experience as an influencer and stylist, with more than a million followers on Instagram.
“My role is a natural evolution,” she said in an e-mail. “I am thrilled to be leading the creative vision of a cultural powerhouse like Swarovski into the future.”
“We are set to enter a new era,” Battaglia added.
“She’s been working very hard during the lockdown months. Believe it or not, she and her teams were able to design 3,000 new products during that period,” Buchbauer said. “We have our drawers full of new ideas, full of new designs, in an enhanced design language, that we are going to launch in the market beginning in the first half next year, so pretty soon.”
Plans are to release the first collection online in February, accompanied with pop-up installations called “Instant Wonders,” in stores of major fashion capitals later that month, mixing art, culture and marketing.
In contrast with the constant stream of new products issued by the brand in the past, Swarovski intends to launch families of products, starting with jewelry each time. First up, a statement piece, say a necklace, followed by other products, like medium-priced bracelets, and, at a later stage, earrings. The necklaces will carry designs meant to emphasize crystals, while remaining classic and versatile — meant to be less trendy, with appeal to a broader audience, and carrying price tags ranging from around $300 to $1,300.
With this lifestyle approach, themes will stretch across categories — to include watches, writing instruments, home decor, figurines and perhaps more — with the aim of drawing in consumers by continuously extending a collection. The shift away from a seasonal, fashion-calendar type of approach to more frequent product drops is also meant to encourage customers to head into the stores or explore online more often.
The label’s famous swan logo is also getting a makeover.
“It goes beyond the product, we are working on the swan logo — it’s undergoing a major rework, it’s being rejuvenated,” Buchbauer said.
Moving away from its traditional blue, corporate branding will embrace more colors — a nod to the effect when crystals refract light.
When it comes to retail, the emphasis will be on streamlining the distribution network — by around 30 percent, with most of the reductions coming from independent, multibrand networks with an eye to moving the label’s image upscale, associating it with higher-end retailers like Bergdorf Goodman or Saks Fifth Avenue, for example. As stores are revamped to offer more of an upmarket experience, the brand will also seek larger spaces. The same approach will be applied to digital channels, and the brand will look to higher end players when striking up partnerships in the realm of e-commerce.
The loose components business, which accounts for around 30 percent of annual sales, will likely decrease to 15 to 20 percent over time as the brand focuses on finished goods for consumers. Swarovski serves prestigious labels such as Dior, Chanel, Gucci and Saint Laurent and has done collaborations with labels such as Supreme, Nike and Moncler, which have boosted the brand profile. Such partnerships are expected to continue, while some others may be phased out.
Emphasizing craftsmanship and manufacturing capabilities — all of the label’s crystals are produced in Austria — there will be a stronger fashion component, with more styling for company communications to promote specific styles that can be conveyed with its products.
Buchbauer signaled he has a long-term view in mind.
“If certain things do not work well in the first place, it should not be a reason to abandon the idea altogether, it should be a reason to further work on it, to refine it and to move on with it in a way that the customer is able to appreciate even more,” Buchbauer said.
“Having grabbed that opportunity during the COVID-19 crisis will give us a nice head start and quite some leeway once we are moving into less rough waters and a more normal situation in the end,” he said, speaking of the current crisis.
The company expects revenue to be down by a third this year compared to 2019 as it lays the ground for its future strategy.
“It’s a tough time, but we really want to try to take it as an opportunity and make the most out of it, and I know that everybody’s working very hard on this project and in the end, I know that we’re going to be rewarded for all that hard work,” Buchbauer said.