Plummeting consumer confidence in the United States has forced Waterford Crystal to cut nearly 100 temporary jobs.
The company, which employs 1,600, is also to cease production at its plants in Waterford city and Dungarvan for a week in June in a bid to stem losses following a slump in US revenues, which account for more than 50 per cent of turnover. Some of the 94 let go this week were out of contract while others were laid off early.
Management will hold talks with unions next week to discuss plans for a temporary shutdown in early June. The company, part of the Waterford Wedgewood group, has also signalled its intention to opt out of the new national pay deal.
Waterford Crystal refused to comment officially yesterday, but sources close to management said the decline in US sales made layoffs inevitable. "The US economy is in a downturn and people just aren't buying luxuries in the quantities they used to," said one source.
Last month, Waterford Wedgewood told stock markets that tensions in the Gulf were harming sales. It said that following reasonable Christmas trade, sales and profits had been under pressure in January and February and would be weaker than expected.
Group chief executive, Mr Redmond O'Donoghue, said this was a time of great uncertainty for luxury-branded products but that the company expected to return a profit this year.
Half of Waterford Wedgwood's sales are to major US store groups, which are experiencing a huge fall-off in consumer spending and are heavily discounting goods to try to encourage sales.
Federated Department Stores, which owns outlets such as Bloomingdale's and Macy's, has been forced to issue two statements in recent months revising down its sales forecasts given the current uncertainty.
Last November, Waterford Wedgewood attempted to boost its presence in the US with the acquisition of two direct marketing firms for €22.04 million. The companies, in Cork and Limerick, have a list of one million homes in the US to which catalogues are sent and access to a further two million US addresses
Both were owned by Fairways Investments Ltd, which employs approximately 60 people in Togher, Co Cork.
Waterford Wedgewood reported a 40 per cent rise in operating profit to €40.6 million in the six months to the end of December. But sales dipped 4.6 per cent to €471.2 million. Operating margins improved 2.8 points to 8.6 per cent. Net debt was reduced €55 million to €402.1 million. Cookware was the best performer with revenues up 30 per cent to €101.2 million. Inventory fell by almost €40 million.
