"It's very painful for everybody, but we have to take the steps that we should have taken years ago," said Mr Buchbauer, 54. In the future, Swarovski will focus on higher-quality products with unique designs rather than trying to offer everything for everybody, he added."Swarovski crystals on a 10-euro T-shirt don't add to our profitability and hurt our brand image."Swarovski offers a cautionary lesson in the pitfalls of globalisation.
But despite its affiliation with the glittering world of high fashion and celebrities, the majority of products costs less than 100 euros. That places Swarovski into the cut-throat segment of mass-market luxury, with its thin margins and fleeting consumer loyalty. Mr Buchbauer's plans have met stiff opposition from other members of the family, who accuse him of causing irreversible damage to the components business run out of Wattens. While his critics concede that the company needs an overhaul, they say the cuts are too deep.
"It's a massive shock for us here, and many families will feel the pain in coming months," Wattens mayor Thomas Oberbeirsteiner said. Because of the dwindling returns at Swarovski, the town is losing two million euros in revenue this year and has to reconsider planned investments in everything from public swimming pools to roads, he added.