
Consumer spending stalled in the third quarter, which is never good news for upscale and luxury brands. And earlier this week, investors watched the U.S. financial markets plummet to their biggest one-day point loss in history -- another scenario that had consumers trying to figure out how to spend what money they have left.
At the All-Clad Metalcrafters plant near Canonsburg, however, workers continued to churn out high-end cookware for buyers who are expected to keep purchasing pricey pots and pans despite the dour economy.
"Nobody is recession-proof; the bad economy has an impact on any business," said Marc Navarre, president and chief executive of Groupe SEB North America, a subsidiary of the French-based conglomerate that bought All-Clad in 2004 and which is investing millions of dollars in technology and facilities at the 34-year-old company.
But because All-Clad targets a small, extremely loyal customer base, he is confident its cookware and other luxury household brands Groupe SEB owns -- including Lagostina, Krups and Rowenta -- will flourish even in recessionary times.
Since January, the All-Clad facility also has been the base for managing Groupe SEB's Krups brand, best known for its upscale coffee and espresso makers.
Krups products will not be manufactured there, but it made sense for Groupe SEB to bring brand management to the same site as All-Clad, Mr. Navarre said, "because they have a business model that should be very similar. ... Krups is an iconic brand for coffee. We have this relationship with All-Clad that we saw as extremely important for Krups."
It also didn't hurt that Mr. Navarre ran Krups' U.S. operations in New Jersey before Groupe SEB acquired it.
Pittsburgh may not be touted as a hotbed of chic or gourmet, but Mr. Navarre believes that Krups fits well within the operation because of All-Clad's "very capable work force. We have people loyal to the company [who] have a very high standard of ethics, and we know they understand what premium and luxury brands mean."
Of the nearly 400 workers at All-Clad, about 300 work in the plant over three shifts, five days a week, pressing, trimming and polishing sheets of metal into the frying pans, slow cookers, sauce pans, ovenware and bakeware that get prominent display by specialty retailers such as Williams-Sonoma; Sur La Table; Bed, Bath and Beyond; Crate & Barrel; and department stores such as Macy's.
When Irish crystal maker Waterford Wedgwood sold All-Clad to Groupe SEB in 2004, sales were $105 million. Mr. Navarre declined to divulge current sales figures but said: "We expect sustained growth. Something between 5 and 10 percent year over year makes us happy."
He also declined to specify how much Groupe SEB has invested in the local operations since it bought the business for $250 million cash from Waterford Wedgwood.
"We don't disclose numbers, but it's a substantial number of millions," he said.
Some of that has been spent on expansion at the Canonsburg plant and some on implementing greater efficiencies at a warehouse in Eighty-Four that housed Emerilware, an All-Clad brand that carries the name of popular TV chef Emeril Lagasse.
"We have transferred Emeril brands to our main warehouse in New Jersey, which allowed us to free up space ... and put customer and logistics people together in one location," said Mr. Navarre.
If loyal customers don't balk at paying close to $2,000 for a 14-piece All-Clad cookware set featuring its premium copper core design, it's because they have "an extremely long relationship" with the brand, and "what they admire is our craftsmanship," said Mr. Navarre.
A 10-piece set of All-Clad with an aluminum core that retails for $550 might appeal to a broader market.
Many customers are "collectors" for whom, "It's not a matter of money," he said. "A lot of them actually have a fairly modest to low income. But they're constantly looking for what's new at All-Clad." Others, he said, are "foodies" who "love cooking and understand how our products work and know that our product will deliver a very superior cooking experience. ... You can love cooking even if your income is not one of a billionaire."
One way Mr. Navarre has gleaned fresh information about All-Clad's customer base is by hanging out at the biannual "seconds" sales that attract buyers -- including professional chefs -- from around the country.
"I think it's an honor when we see all these people lining up to buy these products in the cold or the rain. ... They are very considerate, very open and very kind to us in all ways as we have discussions about what they like, what they don't like and why they buy this product. We can communicate the very high detail that goes into the thinking behind every product and get some input from them."