Fragile Time for Crystal, China Maker

Crystal and china group Waterford Wedgwood, hit this year by a crippling three-month strike and recession fears in major markets, could soon give its shareholders another nasty shock, analysts said today.

They forecast a six-month pretax loss of $35 million for the group, whose products adorn the world’s luxury dinner tables, and warned that currency fluctuations could spell more trouble in 1991.

Shane Nolan, equities analyst at NCB Stockbrokers, said the company’s short-term outlook is bleak.

“This is the kind of share that you buy to lock away for the future. When the turnaround is achieved, you could see profits going up dramatically. But that is several years down the road,” he said.

The group posted a pretax loss of $36 million for all of 1989. Results for the first half of 1990 are due to be announced this month.

Waterford took control of the British china-maker Wedgwood in a 1986 takeover that united two of the most prestigious “table-top” names in the world of luxury goods.

Last March, a group of investors led by Tony O’Reilly, the Irish-born chairman of the U.S. food giant H. J. Heinz, linked up with New York securities firm Morgan Stanley to take a 29.9% stake in the group.

Just one month later, all 2,300 workers at Waterford’s three crystal manufacturing plants walked out in the first all-out strike at the company, already hard hit by a slump in its crucial American and British markets.

The strike began after workers, arguing they were scapegoats for chronic mismanagement, put down their tools when Waterford stopped bonus payments for 500 glass cutters.

John Hogan of Riada Stockbrokers estimated that the strike cost Waterford $35 million. “There is still a problem with labor-intensive stemware. Irish labor costs are a third higher than those of (French crystal maker) Baccarat,” he said.