Abstract

Baccarat, a French luxury brand with an international influence, well known as the market leader that designs, manufactures and retails high-end crystal products for more than 250 years, has known several difficulties since the beginning of the 21st century. By capitalizing on a traditional expertise, the small company managed to become the synonym of a unique French savoir-faire but its incapacity to be profitable and its management issues have slowed down the international expansion of the company and damaged its competitiveness. The French crystal-maker is owned by Starwood Capital Group, an American investment firm, since 2005. This owner has followed a growth strategy and aimed at doubling Baccarat’s revenues in the world. To achieve this objective, they kept appointing new CEOs at the head of the French company as soon as the results were not good enough according to them, which may have weakened the company that consequently lacked a long-term vision held by a unique CEO. But the main objective of Starwood, whose core business is to invest in real estate, was to develop the Hotel offer of Baccarat, an offer that is far from its core business. The success of French luxury companies worldwide is driven by multinational companies like LVMH, Hermès or Chanel but also by medium-size companies like Baccarat, that turns its know-how into a real competitive advantage. But is it enough to compete with such players? How can a small traditional company can go global? In June 2017, Starwood Capital sold the French company to a Chinese investment firm. This specific situation raises several interesting questions: What were Starwood’s motivations to buy Baccarat in the first place? Why did they sell it now? And will this new Chinese owner allow Baccarat to fix its internal difficulties and improve its profits without alienating its traditional mission and values that made its success in the past?

Detailed information