Polish Christmas tree baubles are winning over the Western European and American markets. They stand for good quality and luxury. Americans often pay over 100 PLN a piece and are always awaiting new designs. 70-95 per cent of all production, that is 400,000-600,000 baubles, is sold in the US. This year, Magdalena Słodyczka, co-owner of Silverado, responsible for bauble design, went with a fruit and vegetable theme. Royalty-themed baubles are also a favourite. “Americans love the holiday season and can afford it. We have to do a lot to satisfy them and it is a very demanding but open market. We feel the pressure to seek new inspiration. You could compare it to the fashion industry, where whole collections are themed. Americans love to create stories, hence themes referring to the Orient, Egypt and Hawaii,” says Magdalena Słodyczka, “Most importantly, there has to be a label stating the baubles are from Poland. These products are making us well known in the States”. Polish manufacturers are competing for the American market against others from Mexico, Portugal, Slovakia and Ukraine. Competition also comes from China, but only in terms of price, not quality. “China has taken some key customers away from us. Our product is high-class, and therefore, expensive to produce, which means it costs a lot. This is our niche that the Chinese will not be able to fill anytime soon. They are serious competition for companies that specialise in cheaper products,” Słodyczka explains. Polish companies are able to maintain their position due to the high quality of their products and creativity in making new designs. The Chinese also lose out here, because they do not celebrate Christmas and so do not really feel the market and have to copy European designs.
Apart from the USA, baubles from Józefów go to Switzerland, Canada, Germany, the Benelux states, Denmark, and Austria. There are also requests from South Africa and the United Arab Emirates. Depending on the year, the native Polish market receives only 3-5 per cent of Silverado’s production. Currency exchange rates bring much risk, as contracts with foreign partners are signed for the whole year and this explains how the US recession has hit Polish bauble manufacturers. Słodyczka says: “Differences in currency exchange rates, which caused the fall of many large Polish companies, were also disastrous for us. In this industry, the cycle is almost yearly. It begins when orders come in, then manufacturing starts several months later, while payment arrives two months after that. If there are any exchange rate shifts, we are financially ruined”. The US economy crash hit Polish manufacturers hardest three years ago. “Large, key companies that had great success and employed 300 people or more could not survive,” explains Słodyczka, “Their profitability dropped, and maintaining so many employees is expensive”. Silverado managed to survive, and today the situation is more stable. This year will close with an eight per cent increase. “Further forecasts will be known in the first quarter of 2014, when new orders start coming in, based on the sales of the 2013 collection,” says Wojciech Słodyczka, a co-owner of the company. “Our meetings with retailers suggest a rather good economic situation for the upcoming year”. The cheapest bauble costs 1 PLN, while the most expensive up to PLN 100. Mr. Słodyczka claims that, “in retail, prices can even be five times higher. Depending on complexity, design costs prior to production can be as high as PLN 2,000, which includes the manufacture of a bauble mould“.
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