Herend Porcelain loses money for first time
Wednesday, December 21, 2005, 13:47
Herend Porcelain Manufactory Ltd, a seller of china to European royalty and Hollywood stars, makes a loss for the first time in 180 years of business. Hence, the company is cutting jobs and targeting younger buyers. Herend reduced its workforce by 17 % to about 1,150 three weeks ago and is selling a new, cheaper range of china. The company, which exports four-fifths of its output, has suffered from a weaker dollar and a flood of cheap Chinese porcelain to Europe, said József Kovács, who was Herend's chief executive from 1990 to 2003.
``The last thing people would buy is porcelain,'' said Kovacs, 61, now commercial director. ``It's simply not the time now for luxury purchases,'' he added.
Herend gained notability when Queen Victoria ordered a dish set at the 1851 World Exhibition in London, and more recent customers include the Sultan of Oman and Harrison Ford. Herend, iconic in Hungary like Waterford Wedgwood Plc is in Britain, is among the most recognized Hungarian brands abroad, along with Tokaj white wine and Pick salami, the tourist board said.
Production at Herend has dropped by 20 % in the past four years, including to its main U.S. market, where hand-painted Herend dishes and figurines are sold in shops such as Neiman-Marcus
Group, Marshall Fields and Bergdorf Goodman to stars including California Governor Arnold Schwarzenegger.