An American firm has agreed to buy parts of historic crystal and china maker Waterford Wedgwood after the collapse of the ailing firm put 2,700 jobs at risk including more than 600 in north Staffordshire.
Private equity group KPS Capital Partners has signed a letter of intent to acquire “certain assets” of the group – best known for Wedgwood pottery, Royal Doulton and Waterford crystal – after parts of its Irish business fell into administration earlier this week, said administrators Deloitte.
KPS, a New York-based firm that specializes in buying distressed assets and once owned a German company but currently invests only in North America, declined to comment on whether it would continue to employ any of Waterford Wedgwood’s employees who work at its factory in Barlaston, Stoke-on-Trent and its retail stores.
“This is a critical step forward for Waterford Wedgwood,” said David Sculley, chief executive of Waterford Wedgewood, a 250-year-old company. “We commend KPS for its confidence in our company and for the enormous amount of time, effort and resources expended by KPS globally that have resulted in reaching this important stage.”
KPS is known for taking controlling stakes in companies, often without any debt. The firm has about $1.8?billion in committed capital.
It is believed the firm has been in talks with Waterford Wedgwood’s board to buy the business for several months.
The deal leaves Irish media tycoon Sir Anthony O’Reilly, who owns Independent News and Media, and his brother-in-law Peter Goulandris around £360?million out of pocket. Sources close to Sir Anthony described the deal as “bittersweet”, saying it was the best that could be expected for the company once it had gone into administration.
They said it has yet to be decided how much KPS will ultimately pay for Waterford Wedgewood.
The collapse comes despite attempts to revive the struggling business since 2005. As well as axing thousands, Waterford has embarked on marketing initiatives and launched new products to increase the appeal of its luxury goods, signing up stars such as chef Gordon Ramsay and designer Sir Terence Conran.
It introduced products such as Wedgwood’s Eternity China, much stronger than traditional china and able to stand up to microwaves and dishwashers.
But the firm suffered from funding issues and was weighed down by the cost of restructuring.
Waterford made a pre-tax loss of £55.9?million in the six months to the beginning of October last year, and carried net debt of £422?million. The firm was hit by the onset of the financial crisis, with sales in October 19 per cent down on the comparable period in 2007.
Sir Anthony said the board and executives received “remarkable support” to salvage the business from highest levels from the Irish and UK governments and Irish banks.
Wedgwood was founded in 1759 in Stoke-on-Trent by Josiah Wedgwood, and began making bone china in the 19th century. Crystal maker Waterford was set up in 1783 by brothers William and George Penrose.
In 1986 Waterford acquired Wedgwood to form the present company, listing on the stock exchange and expanding overseas in the 90s.