Family feud rages as Swarovski empire loses its lustre

Wattens: Crystal-studded clouds reflected in a pond, an oversized crystal chandelier surrounded by mirrors: the headquarters of the Swarovski crystal empire are every bit as glitzy as you might expect — but the sparkle can’t distract from a bitter family feud over the company’s future.

CEO Robert Buchbauer says drastic change is now needed.

“We are forced to reimagine and rescale our entire Swarovski business,” Buchbauer tells AFP at the Wattens HQ, framed by a selection of Swarovski-embellished robes.


Swarovski’s crystals may have adorned the outfits of celebrities like Beyonce and Marilyn Monroe and been used by designers including Christian Dior, but Buchbauer says among business clients they are losing their lustre.

Crystals made by competitors in China sparkle just as brightly — for as little as one percent of the price.

Overall revenues for crystals are projected to plummet 30%, from 2.7 billion ($3.3 billion) last year down to about 1.9 billion.

Long-planned, sweeping cuts have only become more urgent, Buchbauer says. The downsizing will also mean laying off about 6,000 employees.

Paul Swarovski, a shareholder and former member of the executive board, says he wants to stop Buchbauer’s plans “before everything goes down the drain”.

He’s been joined by Nadja Swarovski, one of three members of the executive board, as well as her father Helmut and her uncle Gerhard.

Buchbauer, who became Swarovski’s first ever CEO in April, won approval from shareholders for his own proposal which would bring the Wattens operations under the umbrella of a holding company.

The plan won the backing of family members holding around 80% of shares — a “legally effective” decision, says Buchbauer, who stands to gain more power from the change.

Nadja, Helmut, Gerhard and Paul Swarovski and others objected, saying that the roughly 20% of shares they hold gives them veto power. They have filed for arbitration, hoping that Buchbauer’s move will be nullified.

Paul Swarovski insists Buchbauer must go. “As long as the captain who is steering us toward a reef has his hands at the tiller, one has to make sure to get him away from the tiller,” he says.