LONDON, United Kingdom — According to Nadja Swarovski, the head of corporate communications and design services at crystals giant Swarovski, only two companies are ahead of it in jewellery sales: Cartier and Tiffany, both of which are in the fine jewellery space. “We’re certainly the largest in terms of the crystal jewellery element,” she confirms. “We have big goals in terms of the jewellery industry and our position in it.”
“In all areas, overall, we have the ambition to outperform the expanding jewellery market by a very few percent,” adds Markus Langes-Swarovski, head of Swarovski Professional and Daniel Swarovski tourism services GmbH, and great-great-grandson of Daniel Swarovski, who founded the Wattens, Austria-based company in 1895. But in a company the size of Swarovski, even a modest expansion will be significant in absolute numbers. The group saw revenues of over €3 billion (about $4 billion) for 2013, and there are 2,480 Swarovski-branded jewellery and accessories stores around the world.
Cousins Markus and Nadja are the public faces of a group that has expanded from being a manufacturer of loose cut crystals, military-grade optics and abrasive products, to a major operator in fields ranging from watches and fine jewellery to domestic and technical lighting, fragrances, home accessories and even entertainment.
But crystal is still very much at the heart of what they do. Sales of Swarovski crystals represented three quarters of the company’s revenue last year – and their ambitious plans within the jewellery market are promising, thanks to the company’s strong network of connections built up over decades, especially as a significant supplier to the fashion and design industries.
In recent years, the company has launched three new brands – lolaandgrace, Cadenzza and Atelier Swarovski – aimed squarely at specific segments of the market.
Lolaandgrace is the company’s accessibly-priced, youth-oriented brand, while Atelier is its ‘haute couture’ platform for high-end, high-fashion collaborations. But perhaps the most significant innovation is Cadenzza, the multi-brand store concept launched in Austria in early 2013.
On the surface, Cadenzza is purely a retail concept – a chain of ‘curated’ fashion jewellery stores owned and operated by Swarovski, offering a wide range of designer brands from major houses to emerging names. There are now 15 Cadenzza stores in Europe and three in China, but the company says this is just the pilot stage. The plan is for a global store network to be rolled out between now and 2020.
But as Cadenzza expands, it not only brings Swarovski retail revenue, it also drives demand for the core crystal business, creating a vertically-integrated offering where Swarovski act as both a raw material supplier and a powerful sales platform for the design houses’ end products.
“If you look at the Swarovski group overall, we try to play a role in all parts of the value chain,” explains Mr Langes-Swarovski. “For almost 120 years, we’ve served the B2B side with cut crystals and other offerings. But we felt that going forward it is really important to create platforms for retailing. With Cadenzza, we’ve performed this last step of a permanent retail environment. We fill it with our customers who also use our crystals and we offer them a very solid and modern way of distributing their products as well.”
As well as creating demand for their raw product, Swarovski are also using Cadenzza to bring the jewellery business further in line with the rest of the fashion industry. “The jewellery industry overall is still somewhat of a cottage industry and it is super fragmented,” says Mr Langes-Swarovski. “In order to scale up and become an important platform all over the world, we need to work on the supply chain of our customers, as well as our own supply chain.”
Using its experience in manufacturing and retail, Swarovski is also helping jewellery brands to make the necessary changes to their supply chain to ready themselves for growing demand in the future. In addition to helping boost the volume and consistency of their output, Swarovski are also asking the brands to produce designs with greater frequency, echoing the rhythms of the fashion industry.
“We often ask ourselves what kind of player we are,” explains Ms Swarovski. “Are we in the luxury business? Are we in the mass consumer goods industry? And I think we see ourselves wanting to be a design-driven company – I think it’s the design element every six months that will be the interesting offering to the customer and consumer.”
Atelier Swarovski, with pieces retailing between €80 and €1,200 (about $100 to $1,600), is the most explicitly design-driven part of the group’s offer. Autumn/Winter 2014 will see collections from Viktor&Rolf and Chinese fashion designer Ye Mingzi; previous seasons have featured some 60 collaborations with names including Christopher Kane, Maison Martin Margiela, Rodarte and Jason Wu.
“Whoever we work with, we are very careful to show that it’s a symbiotic relationship. It’s mutually beneficial,” says Ms Swarovksi. “They are given a huge distribution; they’ll be in 1,500 Swarovski stores. And for the customer, it’s amazing to be able to access Viktor&Rolf via Swarovski – you might not be able to afford the fashion piece by Viktor&Rolf, but you can afford the jewellery pieces. We think that’s definitely a way forward.”
Lolaandgrace, which currently has 275 points of sale but only a handful of standalone stores, is also scheduled for major expansion in the next twelve months. “The Swarovski collection is very streamlined; it’s very conservative,” explains Ms Swarovski. “And I felt it would really be appropriate for the younger customer to have something a little more fashionable, relaxed and funky. That really warranted separating lolaandgrace from the Swarovski brand. If you look at them both, there’s a similarity, but it’s a more free-spirited approach.”
With involvement at so many levels within the fashion and design worlds, Swarovski can start to resemble a kind of sparkly Japanese knotweed, embedding itself deeply in every sector, sponsoring enterprises from fashion schools to young talent awards to industry symposia and intelligence reports. Along the way, the company works as manufacturer, innovator, designer and retailer.
A perfect example of its multilateral relationships within the industry is its recent partnership with Versace. At the recent Autumn-Winter 2014 haute couture week in Paris, they launched a new textile product, Crystal Fine Mesh, on the runway with Atelier Versace. At the same time, Donatella Versace also designed a stone shape for the company, used in its own jewellery collections, while Versace jewellery is sold in Cadenzza.
“It’s all about these relationships on various topics which keeps us as a company alert at all times,” says Mr Langes-Swarovski. “We are very close to the world of fashion as supplier. If we are able to leverage that relationship in our big retail channel, that’s a win-win for all participants.”
Editor's Note: An earlier version of this article dated 21 July 2014 incorrectly stated that Markus Langes-Swarovski was head of finance and administration. He is not. He is the head of Swarovski Professional and Daniel Swarovski tourism services GmbH.