Tyrolean jewelry giant

Swarovski focuses on luxury during the consumer crisis

Since the family's operational withdrawal, the Group is back on a profitable path.

(Bild: Viennareport)

The global luxury market cracked the 1.5 trillion dollar mark last year. Crises and a reluctance to spend are not affecting the jewelry business, expensive fashion and extravagant status symbols. Swarovski has also noticed this trend and wants to continue earning well with jewelry: After years of family disputes, the group has come up with strong figures.

The Tyrolean company recorded sales of around 1.8 billion euros in 2023, four percent more than in the previous year. The profit margins even grew at an above-average rate. The result from operating activities in the last quarter was the highest since 2018 and net debt fell.

CEO sees Group "back on track" after turbulence
The good results are balm for the long-established Austrian company. In recent years, economic problems, job cuts and fierce family disputes have dominated the headlines around Swarovski. However, CEO Alexis Nasard now sees the crystal manufacturer back on track. The top manager is the first non-family boss and has since restructured the company.

Lebanese Alexis Nasard is a top international manager and the first non-family boss of the Group.

(Bild: Swarovski)

He expects further major growth in the luxury sector, which is growing strongly worldwide despite all the crises. Firstly, luxury customers are generally less price-sensitive as they are already more affluent, and secondly, they sometimes save less on small pleasures such as jewelry when large investments are put on the back burner due to less money.

Thanks to testimonials and new collections, the brand is also to be positioned more strongly among the younger generation. Last year, the fashion icon Kim Kardashian also opened a store on Fifth Avenue in New York, and a collaboration with the fashion label Skims is boosting sales, according to the company. The jewelry brand generally wants to concentrate on flagship stores of this kind. Overall, the number of pure Swarovski stores has fallen by 25 percent since 2019.

Largest market in the USA
There are a good 50 stores in Austria. There is also a production facility in Wattens in Tyrol, which Nasard describes as "the heart and brain of the company" in the "Krone" interview. There are no plans to cut any more jobs from the current 3,000 in Austria (16,600 worldwide), as the plant in Wattens is very specialized. The most important sales markets for the jewelry giant are the USA and China. The United States, the world's largest luxury market, accounts for 20 percent of sales. China accounts for 13 percent of sales. However, the Group is still experiencing a crisis of confidence among Chinese consumers.

Predicting the development of the luxury market is therefore also more difficult than before. There is still a lack of Chinese tourists, but many Indians and Americans are traveling and their wallets are a little looser.

With top model Kim Kardashian as a cooperation partner, the aim is to score points with younger people in particular.

(Bild: APA/ APA/Getty Images via AFP/GETTY IMAGES/Dia Dipasupil)

Lab-grown diamonds on the rise
Created diamonds, i.e. lab-grown diamonds, are becoming increasingly important worldwide. They are cheaper than natural diamonds and Alexis Nasard sees them as "the future". In a few years, the segment could even overtake mined diamonds by a clear margin. After all, according to Swarovski, they are indistinguishable in terms of their chemical, physical and optical properties and are also considered to be more environmentally friendly. For many necklaces, bracelets, etc., an affordable alternative is thus entering the jewelry shelves that can compete with more expensive luxury products, but are significantly more affordable.

Example: In the American online store, where "Created Diamonds" are already available, a white gold necklace with a 0.9 carat diamond from the laboratory costs 2,000 dollars. Otherwise, such jewelry costs many times more. Swarovski wants to increasingly anchor its brands in the premium segment and become more interesting for more upmarket customer groups who previously saw Swarovski as "better costume jewelry".

Global expansion is currently underway and the innovation is set to come to Austria next year at the latest. Women in particular like to choose this option when they want to treat themselves, while men still often choose the more expensive "real" jewelry for their loved ones.