Lladro Reduces Size to Survive
Porcelain manufacturer Lladro announces new measures to try to offset the drop in sales. Its survival is on the table.
There are not good times for Lladro. The Valencian company, worldwide recognized for the quality of its porcelain products, is taking radical measures to overcome the crisis that is choking it. A few months ago it announced a management reshuffle after being unable to leave behind the drop in sales that have accompanied it for several years now, with annual double-digit declines. The two families who left the management of the group eight years ago re-entered in the Board to try to turn around the situation.
It is not the first time adopting saving measures; since 2009 it has taken several decisions to reduce the workload, first with discontinuous fixed contracts and since last year a reduction in working hours by 30% for the entire workforce through a temporary layoffs. It also adopted other measures, such as replacing bonus in cash in exchange of porcelain figures made by the company itself or selling assets. However, this has not been enough and now must conduct a real downsizing, which has not yet been quantified but the rumors put it will affect at least 150 workers. In the company´s statement, it opens the door to try to minimize the effect on the staff, but it looks complicated that the situation does not lead to the dismissal of part of the workforce.
Lladro has been hurt by falling sales abroad, especially Asia, affected by the economic slowdown and anti-corruption measures (mainly in China). In addition, it faces years of a downward trend in interest of new generations for their products, especially in Spain and in other mature markets.
The company was founded in 1953 when the three Lladro brothers began making porcelain products in his family home in Almacera (Valencia). From there, they began a period of fast expansion, especially at an international level, that has made it one of the main references of luxury ceramics worldwide. Currently, the main facilities of the company are located in Tavernes Blanques (Valencia), where about 700 people work.
For its international expansion, Lladró has bet from the beginning by selling through multi-brand outlets. It has some stores in some of the most important cities in the world (just a dozen), but the single brand distribution does not seem to enter into its plans.
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