Luxury brand Swarovski is predicting a slowdown in sales growth as the global luxury consumption declines. CEO Alexis Nasard expects sales growth to either remain relatively steady or decrease from 10% in 2022 to “low or mid-single digits” this year. However, Nasard is optimistic about the profit and cash flow, which he expects to continue rising at double-digit levels. This is in line with other luxury brands such as LVMH, Prada, and Gucci, which are also experiencing slowing or falling sales due to factors like rising inflation and higher interest rates.
Swarovski was founded in 1895 in Austria by Daniel Swarovski and remains a family-owned business. Last year, the company generated €1.83 billion ($1.96 billion) in revenue. It currently has 6,500 points of sale worldwide, including 1,300 owned boutiques. Swarovski is well-known for its affordable cut-crystal jewelry and collectible figurines. Nasard acknowledges the hesitance of aspirational consumers to spend, but he believes that Swarovski’s wide range of products and prices will help the brand weather turbulent economic times.
Despite the challenging market conditions, Swarovski has reported a 6% increase in sales in both the US and China this year. The German-speaking markets are also performing strongly, while markets like South Korea and the UK are relatively flat. Nasard highlights the importance of developing a desirable brand as a key factor in the lifestyle-retail sector’s resilience. As part of its global strategy, Swarovski has opened a flagship store on Fifth Avenue in New York City to establish its brand image in important centers worldwide.
According to Nasard, a store serves as a temple where customers can fully immerse themselves in the brand experience. The new Swarovski flagship store in New York, near Rockefeller Center, spans across two floors and occupies a 14,000-square-foot space. Swarovski plans to increase its major marketing events and collaborations in top cities globally. Past events, like the highly successful “Swarovski Masters of Light – From Vienna to Shanghai” installation, have generated significant impressions and brand exposure. Swarovski intends to continue these major brand moments and third-party collaborations.
In addition, Swarovski has recently announced a partnership with Kim Kardashian and her Skims bodywear range to create a crystal-embellished line. This collaboration follows similar partnerships, including one with model Bella Hadid. While Swarovski does not plan on expanding or reducing its points of sale significantly, the company aims to gradually improve the quality within its current footprint. Swarovski also sees potential growth in its lab-grown diamond program and the implementation of artificial intelligence and automation in its supply chain, market research, and consumer understanding.
Useful links:
1. Swarovski Corporate Website
2. Swarovski Online Store
