Wedgwood fails to stop rival switch

WATERWOOD Wedgwood has failed in a late bid to stop production of a key brand belonging to UK rival Royal Doulton being switched abroad.

The Irish-based luxury products group, which holds a 21% stake in Royal Doulton, wanted the company to review its restructuring plans.

Under proposals announced last month, Royal Doulton said it would transfer production of its Royal Albert brand to Indonesia and cut around 500 jobs in its home town of Stoke-on-Trent.

The chinaware specialist is also planning a £18.9m rights issue in an effort to shore up its balance sheet.

Royal Doulton put the proposals for the cash call before shareholders today after rejecting talks with Wedgwood over the alternative measures. Despite Wedgwood voting against the scheme, the rights issue - due to begin on Monday - got the backing of 75% of investors.

Royal Doulton said the Wedgwood proposals lacked the 'clarity, certainty of execution or substantive merit' of its own plan.

Wedgwood had said it would pay Royal Doulton £24m for Royal Albert and keep manufacturing at its plant in Barlaston, Staffordshire.

The move would have increased employee numbers at the Wedgwood factory by around 130 people and have helped safeguard the health of the industry, it said.

Wedgwood also wanted to pool sales and distribution operations with Royal Doulton in four overseas markets and coordinate personnel in UK retail.

Chief executive Redmond O'Donoghue said Wedgwood was 'seriously concerned' about the implications of the move to Indonesia.

He added: 'Our overriding priority remains to protect the interests of Royal Doulton shareholders, Waterford Wedgwood and the British ceramics industry.'

Wedgwood, which was also willing to lend £12m to Royal Doulton, said its involvement would have saved Royal Doulton up to £18m a year.

Royal Doulton has seen its fortunes tumble and last month shed a total of 1,000 jobs worldwide as it faced up to pre-tax losses of £22.4m in 2001. In the past four years the 200-year-old group has also sold off brands such as Royal Crown Derby and Caithness Glass.

It is now focusing on three core brands, Royal Doulton, Royal Albert and Minton, but also has 400 shops worldwide, with 300 in the UK.

Wedgwood has not been spared from the economic slowdown and last week reported its profits halved last year to £25.3m.