Swarovski wears a hoodie to take the tech route

A group of millennial programmers swapped jokes recently in their office’s well-stocked kitchen while preparing salads for a weekly barbecue. Others mingled around a new foosball table, playfully arguing over the prospective teams.

The budding entrepreneurs had arrived at the space — replete with fridges crammed with craft beer and a $3,000 coffee maker — only late last year. “When we moved in, we weren’t sure this place was for us,” said Valentin Schütz, 24, a founder of Gronda, a smartphone application for hotels to use when recruiting staff members. “I mean, we’re literally in the middle of nowhere.”

Here, in this bucolic village nestled in the Austrian Alps, a co-working space sits in the original 19th-century manufacturing compound of a decidedly old-school manufacturer — Swarovski, the crystal company. The project is part of an unusual effort to refashion Swarovski into, of all things, a tech company.

Fearful of cheap Chinese competition and wary of a profitable complacency that has felled giants in the past — Eastman Kodak, destroyed by digital cameras, is often cited — the company is developing new crystals that double as solar panels or that change colour when tapped with a finger. It has revamped how it sells online, invested millions in high-tech machinery and signed partnerships with smartwatch makers like Misfit.

Swarovski has also hired Silicon Valley advisers and sent executives to the West Coast of the United States to meet venture capitalists and others, trying to add a little tech pizazz to a business whose roots date to the days of buggy whips.

“Tech companies can disrupt whole industries within a couple of months,” said Markus Langes-Swarovski, 42, chairman of the board of the Swarovski Group and a great-great-grandson of the founder. “We need to do that to ourselves before it happens to us.”

To many, Swarovski’s tech dream seems an odd strategy for a 121-year-old crystal maker better known for its (sometimes ostentatious) figurines, designer jewellery and even a $2,000 Cinderella slipper. It also raises questions about whether it is an industry suited to embracing the hoodies, start-up incubators and other trappings that have given Silicon Valley global cachet.

Within Swarovski, which is owned by members of the extended Swarovski family, the revamp was not a slam dunk. Family shareholders were concerned that Langes-Swarovski and his executives were merely jumping on the Silicon Valley bandwagon, forgoing the company’s heritage for the chance to mingle with West Coast technorati. Some were sceptical that the company, which employs more than 31,000 people and owns retail stores from New York to New Delhi, would benefit from shifting toward sensors and start-ups rather than focusing on making shiny crystal.

The reluctance was compounded by the fact that Swarovski was far from facing ruin. The company’s annual revenue reached $3.8 billion in 2015, up 10 percent from the previous year. Swarovski does not disclose its profit.

The crystal maker, which has avidly guarded its trade secrets for over a century, rarely gives a glimpse into its inner workings. The company’s manufacturing centre is usually off-limits even to most Swarovski employees. One enters via a high-security revolving door that would not seem out of place in a spy movie.

More industrially functional than catwalk chic, the campus was dotted with people driving forklifts, shuttling boxes of crystal and other raw materials between buildings. At one new production line, two robotic arms, painted bright yellow, spun in a midair ballet as workers checked the gauges while Kings of Leon, the rock group, played on the radio.

In another building, several 3-D printers whirred away, producing spare parts and prototypes of jewellery designs. Engineers kept watch over machines that were originally built for the semiconductor industry but have since been modified to pump out minuscule crystals, some barely visible when held on a fingertip.

Founded in 1895 by Daniel Swarovski, his brother-in-law Franz Weis and a business partner, Armand Kosmann, the company has roots in Victorian-era disruptive technologies. That year, Swarovski, the mustachioed epitome of a 19th-century businessman, moved his nascent crystal-cutting business from Bohemia (now in the Czech Republic) to this small village in Austria. He wanted to avoid having rivals copy his new machinery — the equivalent of high tech in its day — that allowed him to cut crystal more cheaply and quickly than they could.

© 2016 The New York Times News Service