Markus Langes-Swarovski | Crystal gazing5 min read . Updated: 29 Mar 2014, 12:02 AM IST
This fifth-generation Swarovski says the move from the maharaja to the masses won't happen soon
As a young boy, Markus Langes-Swarovski’s favourite bedtime tale was not one from the Brothers Grimm stable but a Persian fable. His prized possession was a shoebox, the “treasure box" where he hid his collection of sparkling crystals. The crystals were brought home by his father Gernot Langes-Swarovski, the largest, or 21%, stakeholder in Swarovski, a family owned business now being operated by the fifth generation of the Swarovksi family. Markus is the spokesperson of the Swarovski Group and the executive board (Swarovski Crystal Business), which has five Swarovksi members. The company had a turnover of €3.08 billion (around ₹ 25,873 crore) in 2012, according to its website.
“Growing up, I loved Ali Baba (Ali Baba And the Forty Thieves) because he found a treasure box with jewels. I had crystals in many shapes, sizes and colours. The sheer beauty of the products was such that even as a child I instantaneously valued them. And it is still happening, for even my daughter had a box for her crystals when she was little. Now, at 11, she has graduated to collecting figurines like Hello Kitty. But I think it was more fun playing with crystals—you can dig them out from your box, hide them, find the right one, play with them, but that is not so much possible with the figurines," says Markus.
Dressed in a light grey suit with slim-fit trousers and a white shirt, minus a tie, gelled-down blond hair with dark edges, 39-year-old Markus is everything but the conventional European CEO who will not step out unless he is immaculately groomed or has a PR representative or assistant in tow. For our meeting at one of the private dining rooms at The Westin hotel, Gurgaon, Markus strode in, air-kissed his assistant and laughingly shooed her from the room.
Refusing the offer of coffee, he sat down to answer questions in his not-so-perfect, accented English, stopping every now and then to find the right words. “I have been ‘engaged’ with the company for 39 years, but have been actively working for it for the last 14 years. Yet I can say it still surprises and amazes me," he says.
The company, which started out in Watten, Austria, was founded in 1895 by Daniel Swarovski (Markus’ great-great-grandfather) after he had invented a crystal-cutting machine three years earlier. Now the company designs, manufactures and markets jewellery, high-quality crystal, gemstones, lighting solutions, art, home accessories, watches, beauty products, figurines, precision optical instruments such as telescopes, tools and machines. “We are still a totally family owned and operated business, which is very untypical for fifth-generation family businesses. There are not many successful multi-generational family businesses because it is a very, very specific model which combines almost contradictory aspects of conducting business—first there are a company’s particular needs and then there is the family perspective," says Markus.
Here is where the tricky part starts according to Markus, because while the former demands a capitalist outlook, the latter is a potentially socialistic system where everyone is equal since they are part of a family. “Companies do need hierarchies and systems based on merits, but in family businesses there is the ownership issue too. Balancing and understanding that all these systems have to interact in the best possible manner is the key element for driving any successful family owned business. Lately we have intensified this understanding and are now on a good track to preserving this business structure."
No member of the family has the sole authority to take decisions across the Swarovski Group and Swarovski Crystal Business. Swarovski has a governing body for everything— “an executive committee that runs the business, a kind of supervisory committee that represents the capital allocation and the ownership, and a family committee that deals only with family related questions", says Markus.
Of course things are not always rosy, and there have been reports of family members squabbling over the direction the business should take: for example, whether it should stick to high-end luxury or diversify into mass market products too. “We are perceived differently in different geographies. We have a modern approach to luxury, which is that luxury is inclusive, rather than exclusive. For us it is about trying to find interest options for a broad base of clients. Yet we understand that, for example, in a country like India, while we may want to be accessible to everyone, it is just not possible. The move from the maharaja to the masses will not happen anytime soon," says Markus.
The reason for this thinking may be that though Swarovski did, in the last decade, consider competing in the low-end crystal component market, eventually it changed direction. “We believe in high quality, which certainly comes at a price. Since 2007 there was a dramatic decline in market prices. This downturn cycle of prices and quality, and our core belief in ethics and environmental standards, drove the decision to not participate in the low-end market," he says.
In retrospect, Markus says, “One big realization for me was that we are great when it comes to innovation, aiming for higher standards of quality, but we simply cannot compete in the low end. And that it is okay."
Asked why Swarovski’s visibility has been low in India lately, he mused that it was perhaps a result of slow inputs from the head office and the local PR not being aggressive enough. “If I look at overall development in India, we started well in 2001. Even though our development has been stable, considering the size of the market, it is still on a rather small scale, a phenomenon which a lot of Western luxury brands face in India," he acknowledges, reiterating that India’s importance as a market is growing for the company.
So will Swarovski consider partnerships with Indian designers other than Tarun Tahiliani, Manish Arora, Suneet Varma, J.J. Valaya and Manav Gangwani? “To still work with Tarun and the others is great because we look at long-term partnerships and we have an evolving relationship with these designers. Of course, we want to reach out to new talents/designers too so that we can broaden our base here. Apart from collaborating with design schools, we are eager to work out a design contest like the ‘Sparkle of Istanbul’ we had in Turkey to get fresh talent aboard. The message out there should be that crystal can add sparkle to your everyday life," says Markus.