Grupo Lladró S.A.

1950–2005

Grupo Lladró S.A. is known throughout the world for its decorative figurines crafted from porcelain and other materials. The company produces more than 900 different models each year, which are handcrafted by the company's army of more than 2,000 porcelain craftspeople based in the City of Porcelain complex in Tavernes Blancas in Valencia. The company enhances the collectibility of its pieces by limited production runs--whether in quantity or by date--and many of the company's original pieces now fetch prices ranging into the thousands of dollars. Lladró sells its products through a network of some 4,000 retailers worldwide, as well as through the company's own growing retail network of 40 Lladró boutiques worldwide, including a new six-floor, 800-square-meter flagship store opened in Tokyo's Ginza district in October 2002. The company intends to spend $40 million to open up to 50 new Lladró boutiques by 2005. The company also owns the Lladró Museum in Manhattan. As the second generation of Lladrós--the company remains wholly controlled by the founding Lladró family--prepares to take over the company's reins, Lladró has begun an attempt to transition itself into the luxury goods sector, dropping a number of its lower-priced models, ending its distribution relationship with more than 1,500 lower-end retailers, and introducing new figurines and statuettes with price tags ranging up to $35,000. The company also is attempting to diversify its holdings, acquiring a controlling stake in noted Spanish jewelry designer Carrera y Carrera. Lladró is led by brothers and founders Juan, José, and Vincente, who each own one-third of the company and take turns acting as its chairman. The Lladró brothers have been joined by three of their ten children, Juan, David, and Carmen, who have taken the lead in the company's reorientation for the new century.

From Dirt to Clay in the 1950s

The Lladró family were farmers in Almacera, Valencia, a region of Spain long noted for its ceramics and porcelain production. The Lladró brothers, Juan, the oldest, and José and Vincente, were raised in the difficult economic climate of the 1940s following the Spanish Civil War, and were put to work on the family farm. In the late 1940s, however, Juan Lladró left the farm to take up an apprenticeship with a local ceramics tile factory, where his job consisted of painting the tiles with decorative scenes. With his mother's encouragement, Lladró began taking classes at the local art school. In 1950, the family bought a kiln and Juan began producing his own ceramic designs.

By 1951, younger brothers José and Vincente had joined Juan at the tile factory, and also began taking afternoon classes at the art school. While Juan and José leaned more toward painting and drawing, Vincente's interest quickly turned toward sculpture. The brothers soon began to sell their figures, and in 1953, the Lladrós established their first workshop. Production originally encompassed a wide range of items, including ashtrays, jugs, vases, and ceramic flowers. Yet the brothers quickly added their first sculptural pieces, a series of figurines produced in a style that was to place the Lladró name on sideboards all over the world. The Lladró brothers also turned to working exclusively in porcelain. Yet, as Juan Lladró told Time International: "I wanted to make something that once only kings could own accessible to the man in the street."

To achieve this aim, the Lladrós developed their own production techniques, including developing a technique involving pouring liquid porcelain into molds, as well as replacing the traditional coal-fired kilns with gas-drive kilns. The company also brought in a growing number of craftspeople--all of the companies' pieces remained finished by hand--who received training from the company, which started up its own professional training school in 1962. Lladró also developed its own glazing technique, which enabled the company to produce completed figures after a single firing, while creating what was to become a signature "glow" to its pieces. In this way, Lladró was able to begin to offer series of figurines for as little as $30 each.

In this way, Lladró was able to begin to offer series of figurines for as little as $30 each.

1958–1985

Lladró's sales took off by the end of the 1950s, requiring it to move to a larger location in nearby Tavernes Blancqes in 1958. Through the early 1960s the company became the largest producer of porcelain figurines in the Spanish market. The company also had begun exporting its figurines, and by 1965 the first shipments were being sent to the United States, which became one of the company's largest markets, representing some 40 percent of its sales. That same year, Lladró had opened its first retail store, in Valencia.

International Collectors Supplier in the 1980s

The company began construction on its "City of Porcelain" in 1967, opening the workshop and cultural center in 1969. At the end of the 1960s, the company launched two series that were to become synonymous with the Lladró name, the Sad Harlequin and the Group of Horses, both of which proved highly successful. Then, in 1970, the company extended its materials range when it introduced its Gres stoneware series. Another extension of the company's product line came in 1971 when Lladró introduced its first porcelain vases.

Lladró made its first international expansion effort in 1973 when it acquired a 50 percent stake in the United States' Weil Ceramics & Glass, helping the company strengthen its position in North America. Lladró later acquired full control of Weil, which in turn became for a time the holding company for the company's Lladró USA subsidiary.

The launch of the Elite Collection in 1974 provided Lladró with another international success; that range was expanded in 1976 with the Elite Stoneware collection, featuring characters from the Spanish literary tradition. Another hit series debuted in 1978 as the "Pursued Deers," a series of figurines that was later added to the permanent collections of the Brussels Royal Museum of Art and the Modern Art Museum in Santa Domingo. This kind of recognition helped enhance Lladró's appeal among the world's collectors, which had come to include strong sales in Japan as well as through a distribution agreement with Mitsui. Lladró helped stimulate the collection of its figurines through its policy of "retiring" its series--and destroying the molds that created them--in addition to a strict policy of destroying individual pieces with fabrication flaws. In 1985, the company encouraged its collectors again with the creation of the Lladró Collectors Society, which quickly saw its numbers swell to more than 100,000 members.

1986–1993

By then, the Lladró brothers had started to bring in the second generation to the family business, launching three of their children, Rosa, Mari Carment, and Juan Vincenté--one from each brother--on a lengthy apprenticeship. Nonetheless, the Lladró brothers, each of whom owned one-third of the company, continued to share its leadership, following a promise made on their mother's deathbed. Each brother took turns leading the company as its chairman.

In 1986, Lladró stepped up its exports to the fast-rising Japanese market with the creation of a joint venture, controlled by Lladró, with its distributor Mitsui. Two years later the company marked the importance of the North American market, particularly the U.S. market, with the establishment of the Lladró Museum and Gallery in Manhattan, which, in addition to retail facilities, contained one of the most extensive collections of early Lladró pieces. In that year, as well, Lladró formed its U.S. distribution subsidiary, Lladró US, and a new subsidiary for its Australian distribution operations, Ordal Australia.

In the late 1980s, Lladró sought to extend its operations by pursuing two different approaches. On the one hand, the company introduced a new lower-priced line, the Nao collection, targeting a price range from $30 to $60. On the other, Lladró attempted to extend its well-known brand name into other categories, starting with the introduction of a collection of leather goods, including handbags and accessories, in 1989. The company hoped to associate the Lladró name with the international recognition enjoyed by Spain's leather industry. Yet the effort never quite took off with consumers, and by the end of the 1990s the leather line had been closed.

Lladró's porcelain and other figurines, however, continued to build the company's international reputation. The company received new recognition following the success of its exhibit at the Hermitage Museum, in Saint Petersburg, Russia, which added two of the company's pieces into its permanent collection in 1991. By the beginning of the 1990s, the company's sales had topped 1.5 million pieces, sold in more than 140 countries, and accounted for some 60 percent of all Spanish porcelain figures exports--a position that earned the company the Prince Felipe award for internationalization in 1993.

Transitioning to a Luxury Products Group in the 21st Century

1997–2005

Lladró continued to develop through the late 1990s, adding new successful collections, including the Legend Collection launched in 1999. The company also was building up a strong, internationally operating chain of retail boutiques, including a new store opened on Beverly Hill's Rodeo Drive in 1997. That store was followed by the opening of a two-story, 300-square-meter boutique in Las Vegas's Venetian hotel complex, opened in 1999.

With the youngest of the founding Lladró brothers celebrating his 70th birthday, the company was faced with decisions on how best to prepare its future. The new generation, now represented by David Lladró, began to take on a more decisive role in the company. Lladró, which had developed the not-so-enviable reputation as a maker of kitsch products, now sought to reposition itself as a manufacturer of luxury goods.

To achieve this restructuring, Lladró began cutting out a good portion of its lower-priced items, dropping the number of its products from a high of 1,500 to just 900 per year. The company also moved to eliminate its presence in more down-market venues, such as airport gift shops, eliminating nearly 2,000 of a distributor network that had swelled to some 6,900 worldwide. The company then countered the corresponding drop in sales--estimated to reach as much as 15 percent of sales of some EUR 220 million--with a plan to spend $40 million to expand its company-owned retail boutique by as many as 50 stores by 2005.

As Lladró eliminated its lower-priced items, it began adding higher-priced, and more exclusive, figures, including a porcelain train priced at $35,000. These were placed on display in a newly redesigned boutique featuring modern styling. The success of the company's first prototype shop, opened in Tampa, Florida, in 2001, encouraged the company to roll out the concept worldwide, including a new flagship shop spanning six stories and 800 square meters in the Ginza shopping district of Tokyo.

Lladró also returned to its goal of expanding its holdings beyond its porcelain business. In 2001, the company acquired control of noted Spanish jewelry designer Carrera y Carrera, which was then in the process of seeking to extend itself as a worldwide luxury brand. While risky, the company's push of its brand name into the luxury category, and its drive to expand beyond its core porcelain products, was seen as necessary to maintain the family's fortune--the Lladrós counted among Spain's wealthiest families--into the new century. The success, or failure, of the company's new strategy also was expected to help the company determine the successor or successors for the founding Lladró brothers. As José Lladró told Forbes magazine: "I personally haven't yet made up my mind which of the children is the most professional. Time will tell."