Share |

Villeroy & Boch places trust in family continuity

Villeroy & Boch, the family-owned company famous for tableware, glassware and cutlery, served up a member of the family's eighth generation earlier this month when Wendelin von Boch took over chairmanship of the supervisory board, writes Marc Smith.

The news comes amid negative growth figures for the Germany-based business, which traces its roots back to the tiny French village of Audun le Tiche, where François Boch set up a pottery company with his three sons in 1748.

Just over 260 years later, the business is still going but, in common with other companies in the consumer lifestyle sector, is suffering from the global financial crisis. The group yielded a turnover of €182.2 million in the first quarter of 2009, which represents a decrease of 17.5 % on the same period last year.

Not that this unduly worries von Boch (pictured). "I am delighted to have been unanimously elected for the appointment of chairman of the Villeroy & Boch supervisory board," he exclusively told Campden FB. "I believe that I can share my forty years of experience in this difficult environment and contribute to the further development of the company."

According to figures released in May, group turnover for the whole of 2008 stood at €840.9 million, down 0.9% on the previous year, while operating profit decreased to €24.1 million, down from €38.8 million.

In particular, it was a lack of demand from foreign markets that hit revenue – specifically those suffering from a fall in real estate values. While the company's domestic German market experienced an increase of 5.1%, revenues were down 30% in the US, 24% in Spain and 16.5% in the UK. In contrast, Eastern Europe increased by 23% and Asia was up 9.8%.

The company cited "the negative effects of the worldwide economic crisis" for the poor performance overall and, in response, unveiled a package of measures aimed at increasing competitiveness and productivity. However, the costs of a restructuring programme, which is expected to provide annual savings of €50 million from 2011, have now increased to €60 million.

With this in mind, the new supervisory board chairman could be forgiven for wanting to smash a few of company's distinctive plates, but with such a long record of family stewardship, the business will be intent on riding out the current storm.

The company has operated as a public limited company since 1987 and was listed on the German stock exchange in 1990. The voting capital is still in the hands of the family descendants and various family members are presently working in the company, which has roughly 10,000 employees worldwide.

And as with most families in business, you can look to the past for inspiration. In 1836, for example, Jean-François Boch merged his works with rival Nicolas Villeroy in order to survive in the European market – thus forming the company which still stands today. A century later, during World War II, the company's factories were badly damaged, three were expropriated and one was integrated into the French Economic Area. As the company states, this was its lowest point, but it did not fail.

Outgoing supervisory board chairman Peter Prinz Wittgenstein steps down after 15 years in office. A member of the supervisory board since 1993 and its chairman since 1994, he is credited with helping to rescue and spin-off the company's tile segment.

At the family's request, Prinz Wittgenstein will continue his supervisory board membership as vice chairman. "In this way, we will be able to continue benefiting from his considerable experience," said von Boch.

According to a statement released by the company, von Boch, who used to serve a chairman of the management board, has "exerted a fundamental influence on the group, developing it into one of the leading international lifestyle companies."

The elevation of von Boch follows careful consideration by the supervisory board, the family and the management board, who stated that the most important factor was "ensuring future continuity" in the supervisory board chairmanship.

Diplomacy will be key to von Boch's early days in charge, with regard to both family members and shareholders. The board of directors and the executive board suggested on 15 May a dividend of €0.37 for preference shares (down 12% on the previous year) and €0.32 euros for ordinary shares (down 13.5% on the previous year).

However if you are looking for good omens then you need look no further than the new 2009 Villeroy & Boch tableware collection, the motto of which is described as "European tradition and timelessness, instead of short-lived trends." If ever there was a product for a family business in this day and age, then this is it.

Click here to take part in the new Campden FB/Mishcon de Reya survey into family business and the current economic climate

Click here >>