Robert Buchbauer, the new CEO of Swarovski, on his new vision in the brand’s 125th anniversary year
May 20, 2020
Few brands have been more exposed to the retail collapse caused by the pandemic than Swarovski. The crystal manufacturer and accessories empire retails in several thousands of sales points worldwide, most of which have been shuttered for the past two months.
The downturn comes the same year that Swarovski celebrates its 125th anniversary, of the year during which founder Daniel Swarovski first began manufacturing crystal glass with his own patented, electrical cutting machine in Wattens, Austria. Exploiting the hydroelectric power from the Inn river that still powers the company’s main factory.
In the past two decades, Swarovski has built itself a huge reputation as a fashion resource, supplying crystals to haute couture and avant garde designers – everyone from Gianni Versace to Hussein Chalayan. The brand has also developed some impressive high-quality accessories collections, working with star designers like Jean-Paul Gaultier, Mary Katrantzou, Christopher Kane and Hubert de Givenchy in the Atelier Swarovski division.
However, the nuts and bolts of Swarovski is its consumer division, which is managed by Robert Buchbauer, a personable and quietly-spoken gent, who lives not in Austria but in Switzerland. Clearly in good physical shape, Buchbauer likes to ski in St. Moritz; scuba dive at Christmas in the Maldives ands swim in Saint-Tropez, where he has a vacation home.
However, despite his reticence, Robert Buchbauer is clearly calling more shots. This week, when Swarovski announced the appointment of Giovanna Battaglia as its new company-wide creative director, Robert Buchbauer was the executive quoted in the release – not Nadja Swarovski, his more high-profile relative.
“Our 125-year history is witness for the power of our company to transform and reinvent itself and I am pleased to welcome a brilliant creative mind and strong female leader like Giovanna to our company. With her remarkable track record in the industry and compelling point of view, she will explore new frontiers and become a vital part in writing the next chapter of our success story”, said Buchbauer in a release.
“Swarovski is currently realigning its business along a new vision and growth strategy,” the release added in a revealing choice of words.
Swarovski is today managed by the fifth generation of its family members, with Buchbauer, Nadja Swarovski and Mathias Margreiter on the Executive Board.
“The company is currently being realigned along one common vision, one strategy and one organization. With a turnover of 2.7 billion euros and 29,000 employees worldwide, Swarovski is the world’s leading crystal and jewelry manufacturer,” the communiqué stressed.
Buchbauer has long lived in Switzerland, where the consumer goods business is based, at Männedorf, close to Zurich. So, FashionNetwork.com recently caught up with Buchbauer, when the division unveiled its new showroom near the la Madeleine in Paris. The executive was open for discussions, except for those concerning recent reports that there has been a reshuffling of senior management positions within the family at the highest levels.
FashionNetwork.com: Good day Robert, what exactly is your role within Swarovski?
Robert Buchbauer: I run the consumer products division and I am also chairman of Swarovski’s executive board, together with my three cousins. Though I don’t use the name to decorate myself.
FN: Why the new space in Paris?
RB: It’s important to be represented in Paris in a different and more modern infrastructure, to exhibit more traditional flair. It makes for a nice contrast.
FN: How big is your consumer division?
RB: It’s 75% of our overall business, so about 2.2 billion euros.
FN: Would you ever think of quoting Swarovski on a stock market?
RB: Well, never say never, of course. But not in the turbulent and uncertain times that the whole world is going through. Yet I would not like to make any long-term predictions. What we always do is try to balance the pros and cons. When we discuss the idea of remaining family-controlled, we see that it has its advantages. But going public does have advantages too, for instance if you need to access financial and capital markets. Being private is a restricting factor. If you want to remain fully family-controlled, you have to become your own bank! So, we have very conservative and prudent financial policies.
RB: You don’t have much debt?
FN: We don’t have much debt. We have cash in reserves, but I won’t say much.
FN: What sort of year did you have in 2019?
RB: Actually, like a lot of others, business was slow last year. We had around a 2% growth. But over the last two decades, we have had high single and low double-digit growth, totalling around 10% a year over the last decade.
FN: I know it was your great, great grandfather who had the idea for Swarovski, that of giving women something of the experience of owning diamonds, by making beautiful crystal. But what is your definition of the DNA of Swarovski?
RB: I think it was a great idea. One thing in the DNA of Swarovski is its philosophy. Another thing is the aesthetics. From a philosophical point of view, I would say that we are about democratization. Making a perfectly-cut sparkling stone accessible to many people is what we are about. That paradigm changed things back then, because it was technically not possible before they introduced the Swarovski crystals. At that price, at that unreached quality and in those quantities. And the other thing is what it triggers: its sparkle and aesthetic properties always conjure an emotional reaction. That hasn’t ever really changed.
FN: How do you separate your division from that of Swarovski Atelier, managed by your cousin Nadia Swarovski?
RB: Nadia is essentially concentrating on the designer collaborations. So, we try to bring to others our material and rely on the creative artistic input from third parties. To create unexpected and ever-changing, small collections. Whereas here, we try to broaden things and stick close to a "Swarovski design" language that has been developed over quite a few decades. And apply those codes a bit more strictly.
FN: What is your strategy for retailing your products?
RB: We have a total of of about 3,000 mono-brand stores, 1,500 of which we directly operate, either in malls or high street locations. Like on the Champs Elysess, yet our store was brutally destroyed during last year’s Gilets Jaunes riots. The one piece of good news was that they actually took all the products! So, we must be doing something right! But honestly, we were devastated. It was an unfortunate event; because we always followed the recommendations of the authorities. And that weekend, they told us, ‘no, you don’t have to put up any barricades or special shutters.’ As, just a few weeks before, we had put up all sorts of boards and barriers. Hmmm. So, overall, I would say that the mono-brand network accounts for some 75% of all our sales globally. Which is interesting from a margin point of view.
FN: Do you also sell in department stores?
RB: Yes, we do. Specifically in France, we rent from department stores by paying a concession fee. Like in Printemps or Galeris Lafayette.
FN: Where are your three biggest markets?
RB: Well, China has overtaken the US. China is now 25% of global sales, ahead of the US, with about 19%. And, actually, the third is country is France. Let’s see how it turns out this year, but our best year in France was about 145 million euros, which was about 7.5% of our sales; Actually, we started very small in France, 15 years ago, when the brand was predominantly known for its objects and figurines business. And next started to introduce jewelry – which today accounts for almost 80 % of our sales. The French just jumped onto it, they really loved the jewelry. Also, introducing watches to our portfolio gave us another push. Speaking about our European watch business, it first took off in France and Italy.
FN: How much business do you do in watches?
RB: We are getting close to €200 million. Not quite, €190 million, about so. They are our watches: they are not third parity watches. We buy the movements and design all the components before which we assemble with third parties in Switzerland. It is not a license. It is our product. All the crystal is being produced in Austria. Those are very specific cuts made for the watches, and the main range of watches is from 200 to 450 euros.
FN: At that price range, do you think of yourself as a luxury brand?
RB: Yes, affordable and accessible luxury. When talking about "new luxury", that is what we do. We try to build aspiration around statement pieces, and then cascade the collection down to more accessible ideas. But always trying to apply the same codes.
FN: What have you next in the pipeline?
RB: It’s our 125th anniversary, since we started back in 1895, in Wattens, where we are still based. Of cours, we assemble our jewelry in all parts of the world, but the stones still come from Wattens. And this year, we have a very nice anniversary collection.
FN: What impact has Covid-19 had?
RB: The impact will be very big for the whole luxury industry. We are also trying to prepare for the day after – and that will come one day. But, probably, people will reduce travel radically; if not stop it all together.
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