Waterford succumbs to global recession

A group of lenders declined to suspend for a fourth time a so-called covenant that is part of Waterford's loan agreement. (Phil Noble/Reuters)

LONDON - Queen Elizabeth, the Kremlin, and the White House have been customers, but in the current economic climate, luxury crystals and ceramics are a hard sell as Waterford Wedgwood conceded yesterday, when it called in the administrators.

The company, which is based in Dublin and whose roots go back 250 years, makes and sells luxury crystal vases, glasses, ceramic figurines, and kitchenware. It made the ball that drops each New Year's Eve in Times Square, and its crystal chandeliers decorate Windsor Castle and the Kennedy Center.

Waterford Wedgwood said yesterday its 10 British units and four businesses in Ireland were placed into administration, similar to US bankruptcy-law protection, after running out of money and failing to find a buyer.

Deloitte was appointed as administrator of the troubled businesses, which employ a combined 2,700 people, or more than half of Waterford's 5,000 employees. The units will continue to operate as usual until the administrator decides to sell, close, or reorganize them.

"I am disappointed that certain of the group's UK and Irish subsidiaries have had to go into administration and receivership, but we remain optimistic that ongoing discussions will result in a buyer being found for the business," said Waterford chief executive David Sculley.

Waterford Wedgwood was created in 1986 when the Irish crystal maker Waterford acquired the British ceramics company Wedgwood. Both companies have a rich history. Wedgwood was founded in 1759 by Josiah Wedgwood in Stoke-on-Trent, England.

Waterford was founded in 1783 by the brothers William and George Penrose and named after the Irish harbor town where they lived. Waterford faced difficult times in 1851, when it closed down because of rising taxes, but the business reopened almost 100 years later. The Irish government gave Waterford glassware as a present to each American president from Dwight Eisenhower to Ronald Reagan.

Takeover talks with an unidentified private equity firm failed to come to fruition Friday and a group of lenders led by Bank of America declined to suspend a so-called covenant that is part of Waterford's loan agreement. Talks with the lenders started four months ago, and the banks agreed three times to suspend the covenant, which requires Waterford to have a certain amount of cash on hand, to give the company more time to find a potential buyer.