Wedgwood's woes a sign of the times

Tom Wedgwood epitomises the very reason that a 250-year-old pottery company is on the verge of collapse.

Tom Wedgwood, a direct descendant of the Wedgwood company founder, Josiah, stands in front of historic kilns in Stoke-on-Trent.

STOKE-ON-TRENT // Tom Wedgwood epitomises the very reason that a 250-year-old pottery company, whose teacups and saucers were once de rigueur for Britain's middle class, is on the verge of collapse. A Cambridge-educated engineer, Mr Wedgwood, 37, and his wife are typical of a more modern middle class who order cappuccinos at the village coffee shop, and dine out at local restaurants, instead of eating at home off their "best" dinnerware.

They are the sort of people who are too busy, and too sensible, to fuss over Wedgwood's exquisite - and expensive - crockery, which they know would only get broken by the children or the dogs. Except Tom's surname is Wedgwood and his grandfather, to the power of six, was Josiah, who founded the company. The Wedgwood family sold the company 60 years ago but remain devoted to it - Alan Wedgwood, Tom's father, is a non-executive director.

"It would be tragic if the company went under," said Tom Wedgwood. "It makes wonderful, prestige products. Lifestyles have changed but there's still a big market out there. Wedgwood makes 80 per cent of its profits in Japan. The story about the company's problems is front page news there. It is incredibly popular throughout the Far East, in China and Russia. People there love the luxury, the fact that Wedgwood is 250 years of British history."

Closure would also be a disaster for Stoke-on-Trent. About 600 of the company's 1,900 UK workforce are in Stoke. Another 800 people work in Ireland. "I live in Stoke. People here are proud of it. It gives them self-respect. What would it say about Britain if a great name like Wedgwood vanished?" said Mr Wedgwood. On Thursday, it apeared there maybe a reprieve for the company when KPS Capital, a US private equity firm, was said to be in talks with the administrators to buy most of the firm.

The collapse of Waterford Wedgwood - its official name since it was bought by Waterford, the Irish crystal maker, in 1986 - has provoked massive soul-searching in Britain, where the pottery invokes memories of a quieter, politer age, when people had time to chat over cups of tea served in fine china. It is also symbolic of a more modern trend, Britain's move away from manufacturing towards a more services-based economy.

The country has lost most of its coal mines and the old heavy industries, such as steel and shipbuilding, have been devastated by competition from countries where labour is much cheaper. The Wedgwood factory in Stoke only makes the most expensive ranges; the standard china is produced in Indonesia. Even before this latest crisis there was talk of job cuts and further reducing output. All this should not be surprising, but the troubles of Wedgwood have been front-page news in Britain for a week.

Tom Wedgwood thought the company touched a nerve, that it reminded people of what had been lost in the age of computerised mass production: "There are tours of the factory where visitors watch the people making the china. It is incredibly skilled. It is breathtaking. People love it," he said. All those emotions - nostalgia, pride, affection - were apparent this week in Stoke-on-Trent, a straggling conurbation of six towns and villages, Hanley, Longton, Burslem, Tunstall, Fenton and Stoke, which united under the banner of Stoke-on-Trent in 1910, more than a century after the death of Josiah.

"If Wedgwood goes, what's left in Stoke?" said Mohammed Nazakat, a 32-year-old owner of a fleet of taxis, whose grandfather came from Pakistan. "Everything has gone. The mines. Steel. Everything is made abroad now." At the shop selling Wedgwood china and Waterford direct from the factories there was affection and loyalty, and a hefty sale. Angela Kennerley and her partner, Alan Brayford, from Stoke, were buying a dinner service for £800 (Dh4,446). "We were devastated when we heard the news. The quality is second to none. It is a once in a lifetime purchase for us. I have bought Wedgwood before, but only as presents. I could never afford it myself."

Chris and Gordon Etherington, from Market Harborough, were also splashing out on a dinner service. "There is so much interest in food today, with all those programmes on television. How can you serve wonderful food on rubbish plates?" they said. Though Wedgwood might have millions of admirers throughout Britain, the only people who actually buy its china, if the customers in the shop were any indication, are conservative, and middle aged or older.

Wedgwood has tried to broaden its appeal. It has interactive websites. It has slick marketing campaigns. It has done deals with designers such as Sir Terence Conran and television chefs such as Gordon Ramsay, who have lent their names to new, funky ranges. It even produces dishwasher-friendly china. But Wedgwood is what it is. It cannot be the 21st century's crockery equivalent of Apple; it makes gorgeous china which, by its very nature, is old-fashioned.

The Wedgwood factory in Stoke-on-Trent today looks like the headquarters of a software company. There are dozens of low-slung buildings, manicured lawns and car parks. It is half a century old and sprawls over a large area of countryside. This week, because the company is being run by administrators, the London accountancy firm Deloitte, security guards were keeping out journalists. Josiah Wedgwood would have been appalled by the news blackout. He was a flamboyant self-publicist, as well as being a brilliant businessman, potter, inventor and enlightened employer - and would surely have invited the media to tour his factory, to make sure that potential buyers knew what they could get.

By the time he died in 1795, Wedgwood had become a world brand. By the late 1980s, however, the company was in serious trouble. Lifestyles had changed so dramatically since the 1940s it was in danger of becoming an irrelevance. It was bought by Waterford, the Irish company which made fabulous glassware, but this simply amalgamated two great companies whose time looked like it had gone. In the 1990s the new, single company was rescued by Sir Anthony O'Reilly, the Irish businessman who owns the Independent newspaper, and his brother-in-law, the Greek shipping magnate Peter Goulandris. The two men pumped in money, year after year. But the losses rose and the debts piled up. For the six-month period ending in early Oct 2008 the company reported losses of ?63 million (Dh315m).

The banks lost patience and said they would not extend credit, which led to the appointment of Deloitte this week. Tom Wedgwood blames the management for concentrating on the United States and Britain, where people no longer want formal tableware or great glassware. Instead, he said, they should have kept the focus on other parts of the world, such as Asia, where the newly prosperous prized what the West no longer wanted. "There is no way the company should be losing money. It is a great prestige product."

But Keith Farrell, a former coal mining engineer who has been the chief executive of the British Ceramic Confederation for 15 years, thought it was too simple to blame the crisis on a flawed marketing strategy. "It is all about changing lifestyle. People don't eat together like they used to. There's no formality. Wedgwood used to be so exclusive that it could justify its cost. But now it is expensive and not exclusive."