CEO Talk | Nadja Swarovski, Member of the Executive Board, Swarovski

LONDON, United Kingdom – Nadja Swarovski is a woman on the go. Having recently been elevated to member of the executive board of Swarovski, she is constantly shuttling between her home in London, Swarovski's headquarters in Wattens, Austria, and countless other places around the world. Indeed, the crystal manufacturing company that Daniel Swarovski set up in 1895 has since grown into a business with over €2.8 billion in revenues, operating in several disparate market segments, with B2B and B2C businesses, and over 2,000 retail stores. This is a complex, global concern.

On the afternoon that I meet with her in Swarovski’s London offices, she is preparing for a trip to Los Angeles, where Tony Award-winning production designer Derek McLane is putting the finishing touches on a Swarovski-encrusted set for the 85th Academy Awards, an ongoing collaboration that is now in its sixth year.

It is just one of the many projects Nadja Swarovski has undertaken over the past decade to connect Swarovski with the worlds of fashion, film and design to achieve her vision of turning Swarovski into a design-led company. In fashion, Swarovski is known for its collaborations with emerging designers including Rodarte and Christopher Kane, while leading figures in the design world, including Zaha Hadid, Yves Behar and Karim Rashid have engaged with Swarovski through its Crystal Palace initiative.

But just because her name is on the door doesn’t mean it has been an easy ride. At times, it has been an acrimonious, uphill battle since she joined the family business in 1995. As a privately-held company thought to be controlled by more than 100 descendants of the company’s founder, the family dynamics can sometimes be complicated, and not everyone has agreed with her approach.

But today, as Chinese manufacturers flood the market with cheap crystal and eat into the commoditised wholesale jewellery components business, Nadja Swarovski’s vision for the company seems downright prescient. Value-added products that are innovative and design-led will help Swarovski stay ahead of the pack and maintain healthy margins.

I sat down with Nadja to learn more about her new role, how she sees Swarovski evolving over the next 100 years, and the 'Paris haute couture' exhibition opening on Thursday, tracing her company's history with the most renowned couturiers.

BoF: A lot of people in the fashion industry know Swarovski as a supplier to the industry, but Swarovski is actually a much broader business than this. Could you give us an overview of the business, and the history of how it has developed?

NS: The first product that my great-great-grandfather, Daniel Swarovski, created was a jewellery stone which was supplied to the fashion industry [as a component]. Then, in the 1970s, my grandfather was doodling around with a few chandelier components and glued a few pieces together, ending up with what looked like a mouse. That’s how we went from a trade product to a consumer product.

In the early 1980s we thought, ‘let’s create our own jewellery.’ We weren’t quite sure it was right to suddenly [compete] with our own customers, but actually we set a better standard of manufacturing and quality within the jewellery industry, which at the end of the day is a good for the consumer.

The consumer goods division grew tremendously, and as those crystal animals evolved, we subsequently had a collector’s society of 500,000 people worldwide. The animals have changed, they became a bit more design-driven, but I personally think we still have a lot of room for improvement in that arena. The ratio between the jewellery and animals is now 80/20 in terms of our profits.

The components division, supplying the design, fashion and jewellery industries, was a lot larger than the consumer goods division 10 years ago. With the increase in competition in China, there are hundreds of crystal manufacturers now, competing with us on price. Our competitive advantages are the brand name, assortment of the crystal and the types of application and technology. That’s where the Chinese have not caught up.

The other division is Swarovski optics, binoculars and riflescopes. The binoculars are used for the hunting industry, but predominantly bird watchers. The grinding stone company, I think is now the second largest worldwide creating grinding stones, and we also supply, besides Swarovski, automobile and nautical companies, Rolls Royce and so on.

BoF: So, this is a pretty big company with many different divisions and products, which can lead to confusion in the market about the Swarovski brand. If you were going to distill what Swarovski stands for, what would it be?

NS: I would say quality and craftsmanship within crystal manufacturing. Give me 5 years and hopefully we can say design-driven. We are really trying to create a product that’s relevant to the consumer and we’re trying to embrace our consumer, whether that is the fashion designer that’s using our product or the end consumer who buys our jewellery.

BoF: Speaking of design, let’s talk about the long-standing relationship between haute couture and Swarovski. You are opening a new exhibition about this relationship during Paris Fashion Week. Can you talk to me a bit about how that relationship started, and how important that is to the business today, both in terms of innovation and design?

NS: We have been in a very special position at Swarovski, because for a certain time we were the monopolist jewellery stone supplier to the fashion and jewellery industry.

We worked with [Charles Frederick] Worth, who did all the gowns for Queen Victoria; a lot of her gowns are encrusted with Swarovski crystals. We also worked with Coco Chanel and Christian Dior. This is when my grandfather started to have a closer relationship with the couturiers. He went to Paris, visited them in their studios, and they visited Austria, [where] he showed them a bit of the manufacturing, so they could understand how far they could go with their requests of a special crystal.

Dior wanted a crystal that emulated the northern light, so a coating was invented called the aurora borealis, which still is one of our best selling stones. Elsa Schiaparelli wanted a special grey coating. Coco Chanel mixed real gems with crystals, glass with pearls, and she really forced people to think about the design [beyond] the value of the material.

For Swarovski that was perfect, because to us it was really all highlighting the design.

BoF: Earlier, you were talking about Chinese competition. Do the Chinese also compete with you today in the haute couture market, or is that still a relative monopoly for Swarovski?

NS: They are increasingly competing [with us]. It’s our customer service that makes a huge difference, and of course product innovation. For Swarovski, innovation has brought us to where we are today, and we believe it’s innovation that will keep us alive in the future. We are working more and more with designers to create special stones. We did a special stone for Armani, and Versace, we’ve worked with Viktor & Rolf, and we’re just creating a stone for Maison Martin Margiela.

BoF: The other way that you have been fostering innovation is by working with young fashion designers. But up until a few years ago, it was a long list of designers. Now it seems like you’ve really narrowed your focus. What is the thinking behind that strategy?

NS: Well that [type of] collaboration began 12 years ago when we started working with Alexander McQueen. If there is one person I can single-handedly credit for reintroducing Swarovski in fashion, it is Alexander McQueen. He opened the floodgates in fashion using Swarovski crystal. He created this crystal mesh top with a hood, and teamed it up with the most incredibly delicate silk skirt. That juxtaposition between the hard and the soft and delicate made it so powerful and energetic.

As time went by, we continued to support these designers, whilst also concentrating on the younger designers. You’re right to say that there was a time period when we were perhaps working with too many people. Our attitude now is ‘less is more’. More focus, with fewer designers but more financial support from our side. What we really demand from them [in return] is to continue to use the crystal in a different way.

BoF: What are you looking for now when you are selecting this very small group of young designers to support?

NS: We look at their past track record, their creativity, their creative vision. What we find, over and over again, is that it is the designers that have a passion for crystal who truly find the right way of using it. We’ve worked with people when it was clear they just wanted the financial support and you could tell the final result was not aesthetically pleasing and it wasn’t impactful.

If your heart is not in it, and you don’t have a vision of how you can use it to make your own creation more powerful, it’s not cutting-edge enough. It has to be a two-way relationship, this is not just a financial transaction. We really challenge them, and it elevates their creativity too.

BoF: On another note, I was fascinated by Swarovski’s recent move into the entertainment industry. Hollywood has always been a big part of the way Swarovski communicates, but moving into the area of working on films such as Romeo and Juliet, which comes out this year, is brand new.

NS: We have a tremendous history in the film industry. We have been part of the silver screen since it’s beginning 75 years ago. Dorothy’s slippers were made with Swarovski crystals, as was the tiara that Audrey Hepburn wore in Breakfast at Tiffany’s and Marilyn Monroe’s dress when she sang ‘Happy Birthday Mr. President’ and so on.

Romeo and Juliet was an opportunity that came to us from 3 different people in the same week, one of them being (director) Julian Fellowes who is a family friend. He called up and said he had adapted the script of Romeo and Juliet and asked what we think. I thought it sounded fantastic.

BoF: How will we see Swarovski crystal come to life in that film?

NS: You’ll see it in the costume and the jewellery, but I felt very strongly about leaving it entirely up to the costume designer. I wanted it to be an authentic use of crystal, not an overuse. There’s an amazing ball scene where Romeo & Juliet meet for the first time and Juliet wears this amazing mask and the tips of the mask are covered in individual crystals. They  have such an impact on camera.

We are also creating a jewellery line based on the film which we will be selling in our Swarovski stores, and hopefully we will be able to entice all of our customers to see the movie. We feel it’s an incredibly educational movie, fantastic for the young generation.

It fits into my great-great-grandfather’s motto. He thought that diamonds were for royalty, and he wanted to create a product that felt like a diamond, but that anyone could afford. From the beginning we have been about the democratisation of luxury as well.

Paris Haute Couture runs from March 2 to July 6, 2013 in the Salle Saint-Jean of the Hôtel de Ville in Paris. CEO Talk is BoF's forum for in-depth discussions with the fashion industry's global decision makers, conducted by founder and editor-in-chief Imran Amed.

This interview has been edited and condensed.