Luxury reinvented Owners Back Meissen Revamp

A windfall from its owners means the world famous porcelain manufacturer can go ahead with plans to create a luxury lifestyle brand.
Meissen's porcelain with the exquisitely detailed and colorful drawings that they are famous for.

Christian Kurtzke, the chief executive officer of the world famous porcelain manufacturer Meissen, is a relieved man.

At the weekend, the Free State of Saxony, which owns the company, resolved to establish the Meissen Porcelain Foundation, which will acquire the manufacturer’s thousands of valuable moulds and museum exhibits. This means an early Christmas present for Mr. Kurtzke, who plans to use the millions in proceeds to turn the centuries-old firm into a luxury and lifestyle brand, Meissen Couture.

“Now we can continue to invest,” he said. “With the commitment of the Saxony ministry of finance, our financing is assured up to 2020.”

A battle with its state owners over future direction has left Meissen starved of investment in recent years. The release of funds means management can now carry out their ambitious couture plans globally.

Mr. Kurtzke has long wanted to enact the Couture strategy to stabilize the ailing company. But the ambitious plans drew much criticism from sections of the state government. As a result, Saxony commissioned the professional auditing service firm KPMG to “illuminate and determine the feasibility of the growth strategy”.

Although the contents of the report are being kept secret, the commitment to finance ultimately vindicates his strategy.

Mr. Kurtzke had greatly expanded Meissen’s collection, adding accessories, furniture, fabrics, haute couture clothing and jewelry in recent years. He is putting a heavy focus on the Chinese market. “We will open flagship stores on January 9 in Beijing and in the first quarter of the coming year in Shanghai,” he has announced.

In addition, he wants to “establish subsidiaries in the most important markets worldwide.” This includes, for example, the USA. The first tranch of stores have already opened in Italy, England and in the Asia-Pacific region.

Mr. Kurtzke is also currently remodeling the 20 German stores so that they can display more of the new products alongside the traditional porcelain. Next, he wants to bring handbags and leather accessories into the shops.

Despite the planned expansion to 300 stores worldwide, the plans must remain modest - the company will grow mainly through franchise stores.

Despite the planned expansion to 300 stores worldwide, the plans must remain modest. “We can’t erect dozens of our own stores like the major luxury companies do,” he said. The company will instead “grow mainly through franchise stores.”

It will also continue to generate the bulk of its sales - around 60 percent - through porcelain. In this way, the 600 jobs in the famous Meissen factory near Dresden, in eastern Germany, will remain untouched.

The factory, founded in 1710, was originally owned by the King of Saxony, but ended up in the hands of the East German government after the Second World War. It was bought by the Free State during the privatization of East German assets after reunification in 1990, and the government wants to preserve it as “cultural heritage.”

Meissen's business figures for 2013 have not yet been made public. Previously, the manufacturer generated sales of just under €40 million, or $50 million.

Things are running well in the current business year. Mr. Kurtzke is expecting “a growth in sales in 2014.” He has also confirmed his previous announcement that the company “will be in the black by 2018.” He will be aided in this aim by a new managing business director and advisory board.

 

The author is an editor at Handelsblatt with experience reporting on consumer markets. To contact the author: [email protected]