The global luxury market topped $1.5 trillion last year. Crises and purchasing reluctance cannot affect the trade in jewelry, expensive fashion and extravagant status symbols. Swarovski also notices this trend and wants to continue making good money with jewelry: after years of family disputes, the company is reporting strong figures.
The Tyrolean company achieved a turnover of approximately 1.8 billion euros in 2023, 4 percent more than the previous year. The return margins even grew above average. The result from ongoing activities in the past quarter was higher than since 2018 and net debt decreased.
Boss sees group “back on track” after turbulence
The good results are balm for the traditional Austrian company. In recent years, economic problems, job losses and violent family conflicts have long dominated the headlines surrounding Swarovski. Director Alexis Nasard now sees the crystal manufacturer back on track. The top manager is the first non-family boss and has since been restructuring the company.
He expects further major growth in the luxury sector, which is growing strongly worldwide despite all crises. First, luxury customers are generally less price sensitive because they are wealthier anyway; second, they sometimes save less on small pleasures such as jewelry when large investments are put aside because they have less money.
Thanks to testimonials and new collections, the brand should also be positioned more strongly among the younger generation. Fashion icon Kim Kardashian also opened a store on Fifth Avenue in New York last year and a collaboration with fashion label Skims will result in increased sales, according to the company. The jewelry brand generally wants to focus on these types of flagship stores. In total, the number of pure Swarovski stores has decreased by 25 percent since 2019.
Largest market in the US
There are about 50 stores in Austria. Production also takes place in Wattens, Tyrol; for Nasard, the head office, there is “the heart and brain of the company” in the interview with “Krone”. There are no plans to cut any more jobs from the current 3,000 jobs in Austria (16,600 worldwide), as the Wattens factory is highly specialized. The most important markets for the jewelry giant are the US and China. The United States, the world’s largest luxury market, accounts for 20 percent of sales. 13 percent of sales come from China. However, the company is still facing a crisis of confidence among Chinese consumers.
Predicting the development of the luxury market is therefore more difficult than before. There is still a shortage of Chinese tourists among tourists, but there are many Indians and Americans who travel on a looser wallet.
Lab-grown diamonds are on the rise
So-called “created diamonds”, i.e. diamonds grown in the laboratory, are becoming increasingly important worldwide. They are cheaper than natural ones and for Alexis Nasard they are “the future”. In a few years, the segment could even clearly overtake diamonds produced in mines. According to Swarovski, they are indistinguishable from each other in all chemical, physical and optical properties and are also considered more environmentally friendly.
Global expansion is currently underway and the innovation should come to Austria next year at the latest. Women in particular like to use this variant when they treat themselves to something, while men often opt for the more expensive ‘real’ jewelry for their loved ones.
Source: Krone
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
