On the morning of the Vienna Opera ball, Swarovski CEO Alexis Nasard is holding court in his suite at the Hotel Sacher. As sponsor of the event, a highlight of the Austrian social calendar where debutantes traditionally presented themselves to high society, Swarovski has been designing the debutantes’ tiaras for nearly 70 years.
This partnership hinges on “classic luxury credentials, which are history, provenance, savoir faire, craftsmanship, creativity, impeccable quality; these give the brand credibility,” says Nasard. “Then there’s balancing that with unapologetic modernity, which has been constantly in the zeitgeist, being current and being a relevant part of the cultural landscape. The texture with these two components makes the power of the Swarovski brand.”
Both are key to the brand’s LuxIgnite strategy Nasard instituted upon joining the Austrian crystal brand as its first non-family member CEO in mid 2022. The company had been family run since its inception in 1895 by founder Daniel Swarvoski. How is this two pronged approach faring in luxury’s new arena?
Swavoski’s new vibe#
If the Vienna Opera ball nods to provenance and tradition, the recent revamp of the Swarovski look (under LuxIgnite) is pointedly about the zeitgeist. These include unexpected collaborations with the likes of Kim Kardashian’s Skims label. This is all a far cry from last minute duty free finds, teen targeted jewelry and crystal figurine collectables of yesteryear, although those parts of the business remain important, the brand’s different lines are “surgically segmented.”
But more significant is the redesign of key boutiques globally in delicious candy coloured powder pinks, blues, greens and yellow – under the WonderLux and WonderColor retail concepts.
It’s the perfect match for the playful, sometimes edgy and often oversized, sparkling fashion-forward baubles that are key to Creative Director Giovanna Engelbert’s new vision at Swarovski since being appointed in 2020. The high fashion insider, who has worked as editor at Italian Vogue and W Magazine, is providing a fresh approach to what Nasard calls Swarovski's new and modern “joyful opulence.”
“We’re very privileged to have her. Giovanna and I see eye to eye on what kind of brand we want to be,” Nasard says. “What kind of artistic concept we want to follow and how we want to be different. How much do we want to dare? How much do we not want to dare?”
Brand heat, performance and consumer response#
How have consumers responded? For 2022, the brand reported 10% YoY revenue growth, with sales hitting 1.83 billion euros ($1.97 billion). While we must wait until mid March for the brand to reveal its full earnings for 2023, Nasard provides some clues.
The brand significantly grew its top line in 2023, he says: “Like-for-like sales were up 10%, which is in the upper upper tier of the luxury industry. Our brand relevance is up across key markets. Our brand desirability is up across all markets.”
Nasard reports that EBIT grew “massively.”
And in more good news, the brand has continued to rejuvenate and attract younger clientele. “Today we have 38% of our customer base who are millennials and Gen Z, which tells you that the brand is resonating with younger generations,” Nasard says.
The China story #
As early entrants into the country, China remains Swarovski’s biggest market, but it isn’t its fastest growing. China is however showing steady growth across all key parameters, and importantly brand equity.
“Basically we closed the year with double digit like-for-like growth in China,” Nasard tells Jing Daily. “Store traffic was up double digits, which means reignited interest in the brand. We have now renovated 70% of our store network and the renovated stores are also growing productivity in the double digits … but we’re not looking for explosive growth in China. We are looking for steady growth.”
Swarovski’s fastest growing market in 2023 was Central Eastern Europe, and the Middle East also did well. And perhaps because of Engelbert's (née Battaglia) influence in her native Italy, “this market grew fastest in terms of like for like sales,” Nasard says.
Last September, a hugely successful “Masters of Light: From Vienna to Shanghai” exhibit showed off Swarovski’s craftsmanship, history, archive pieces and collaborations alongside highlights from the new look and collections to a Chinese audience. The brand gained a huge 1 billion social media impressions in a week for the event, and reignited public interest.
But worries about China’s economic backdrop continue. Consumer confidence is wobbly and macroeconomic developments, such as the Evergrande collapse, haven't helped. The fashion, beauty and luxury industries are in limbo. How does Swarovski, an affordable lux brand, or “pop luxury” as Nasard prefers to term it, move forward in China, knowing there are many challenges to navigate?
“We don't chase consumers. We try to seduce consumers by creating relevant desirability,” he says. “In the particular case of China, our strategy is very urban. It's focused in top cities where culture is created and trends are shaped. So, a younger skew, an urban focus, an artistry-driven desire that we want to create with the brand.”
With Swarovski, Nasard is looking not only to follow the zeitgeist but “to partake in its creation, and Chinese culture is increasingly radiating around the world.”
Will luxury shift to pop?#
The luxury industry has transformed in the past five to 10 years, including more democratization, the input of streetwear, the social media boom and recent big price hikes. Nasard says that although some hikes in line with inflation may occur, Swarovski will not inflate prices in the same manner as many of the high luxury brands like Chanel, LV and Hermes, as it's not the kind of interaction they want to have with clients.
These clients are, however, upgrading their purchases and naturally moving up the ladder. “This is the second year in a row where the average price per unit is going up by double digits,” the CEO reveals, adding how the industry has changed: pomposity, sky-high prices and exclusion are now dated notions to him.
“For me, luxury is about instilling joy and a sense of self worth,” says Nasard. “When you buy yourself something beautiful, you are glorifying yourself, making you feel good about yourself. It's the result of self-esteem, not snobbishness."