Wellendorff jewelry

Sparkling Returns

  • Why it matters

    Why it matters

    Despite its small size and being positioned at the lower end of the declining luxury goods market, Wellendorff has managed to increase profits.

  • Facts

    Facts

    • Wellendorff was founded by the family of the same name in Pforzheim, south-western Germany, in 1893.
    • It is estimated to enjoy an annual turnover of around €80 million ($83 million).
    • Global sales of luxury jewelery are expected to remain static this year at around €16 billion.
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  • Audio

    Audio

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Made in Germany: Schmuckmanufaktur Wellendorff
Christoph Wellendorff has overseen his firm's expansion into China, the U.S. and Japan. Source: Heinz Heiss

The family-owned Wellendorff jewelery firm is famed throughout the world for its gold thread necklace that requires the most exacting of production techniques.

The necklace starts the manufacturing process looking like a long sausage of dough. But as it passes through steel rollers multiple times, the thread becomes thinner and thinner. Eventually, after hours of pressing and other processes have been applied, what originally looked like a 40-centimetre long gold sausage has been fashioned into a delicate golden thread.

Christoph Wellendorff, one of the co-owners of the Pforzheim-based company, takes pleasure in showing visitors around the factory and showing them how its famous gold colliers are made. He is also looking forward to next spring when a new visitor center will open on the site, which sits on the northern edge of Swabia’s Black Forest.

The new Wellendorff World visitor center will house the company’s showroom and a small museum with a treasure chest of jewelery rarities. Its opening will coincide with the 250th anniversary of jewelery production and watch-making in Pforzheim, which is known as “Goldstadt Pforzheim” (Gold City of Pforzheim) because of its long association with the jewelery trade.

While global luxury good companies have in recent years been suffering a downturn in sales, particularly in China and Hong Kong, the Wellendorff family business has been going from strength to strength, by breaking undisclosed new sales records.

A particular annoyance for the company is the occasional discovery of fake copied jewelery products.

Mr. Wellendorff says that orders for the last quarter have been “sensational”. “These are the best months I have ever experienced,” the 52-year-old sales director said.

But Mr. Wellendorff declines to provide any exact figures saying that: “I am a goldsmith and not a financial investor”.

Industry experts estimate that the 123-year-old company, which has a reputation for financial prudence and employs around 140 people, has an annual turnover of around €80 million ($83 million).

Although there are other manufacturers of jewelry in Pforzheim, Wellendorff is the only one to have created a famous brand from its products. The company’s rings, necklaces and bracelets, which feature a prominent “W” and are generally priced at between €1,000 and €4,000, sell particularly well in Germany, Austria and Switzerland.

When asked about the secret of the company’s success, Mr. Wellendorff replies vaguely using marketing stock phrases such as “We are passionately committed to jewelry and beautiful women” or “Our jewelry is designed for eternity”.

The company’s success is largely down to its focus on the manufacture of small collections of products, its vertical integration throughout Germany and its long-lasting products. Since the financial crisis, Wellendorff has also benefited from the fact that, because of continuing low interest rates, many customers have chosen to buy jewelry as an alternative form of investment.

Mr. Wellendorff also cites the company’s slow culture “as a part of our success”. This applies, for example, to the company’s use of social media, where Mr. Wellendorff freely admits the company has some catching up to do.

The firm has also been slow when it comes to expansion, where the Wellendorff family has taken a cautious approach compared to many of its competitors. It was only in 2010 that the company opened its first overseas boutique, in Hong Kong.  Since then, Wellendorff has opened outlets in China and the U.S. and now has 15 shops worldwide.

But the company plans to take a break, at least for the time being, from overseas expansion. “We will not be moving into new countries in the coming years as we are already very busy with our foreign markets in countries such as Japan, the U.S. and China,” says Mr. Wellendorff.

The Wellendorff family has decided that it only wants to take on as much work as it is able to carry out well. It is only through such a strategy, the family believes, that the fourth generation of the company – which at the time of its founding in 1893 supplied aristocrats and other wealthy patrons – will be able to remain in control.

Christoph Wellendorff and his brother Georg have been managing directors of the company since 1999. Christoph is very much the outer face of the company and travels extensively throughout the world as the firm’s marketing chief. He recently opened a new Wellendorff boutique in a hotel in China World, Beijing’s most famous shopping mall.

Forty-nine-year-old Georg is responsible for production at the Wellendorff factory, while his 48-year-old wife Claudia takes charge of marketing and public relations. Christoph and Georg’s mother Eva, who is more than 70, and 81-year old Hanspeter Wellendorff, are employed as senior consultants.

Unlike many similar companies there is no official advisory board. Instead the family prefers to take advice twice a year from “two friends of the house”.

Does having so much family at the top of the firm lead to good decision-making and management? “Yes, it works very well because we all have clearly defined tasks,” says Claudia Wellendorff. “Of course we talk about anything controversial before coming to a decision that we all stand by.”

The company positions itself at the lower end of the luxury jewelry market, which is this year expected to remain static with global sales of around €16 billion, according to the consultancy firm Bain & Co.

For the members of the Wellendorff clan, the firm’s emphasis on family, tradition and craftsmanship are at the core of their strategy.

In the company’s simple 1950s manufacturing plant in Pforzheim, much of the work is still done by hand despite the existence of numerous specialist tooling machines that the company has designed itself. Meanwhile, many of its products, such as a new clasp for a chain, are tested thousands of times before being launched for sale.

A particular annoyance for the company is the occasional discovery of fake copied jewelry products, as was recently found on sale at the Karstadt chain of department stores. “Of course we have to take this in our stride,” says Claudia Wellendorff.

But the threat of fake products makes it important for the company to take precautions. As he hastily pushes a silver-colored bracelet under the cuff of his white shirt, Christoph Wellendorff says he cannot show the bracelet publicly yet as it will not be launched until next spring. The price of the square cord of white gold: a cool €10,000.

 

Georg Weishaupt covers the luxury and fashion industry for Handelsblatt. To contact the author: weishaupt@handelsblatt.com

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