The photo is supposed to demonstrate the new unity. Four apparently happy young people, three women and a man in the middle. The daughters from the second marriage and the son from the first marriage of Anton-Wolfgang Graf von Faber-Castell. He died in January 2016 at the age of 74, after four decades at the helm of the family and their pen dynasty. He left his succession unregulated and so a struggle for power in the company founded in 1761 began among the bereaved. But now everything should be settled peacefully. At least the photo should give that impression. Faber-Castell AG spread it, combined with the message: The ninth generation of the family is taking over.
Is it really a peace treaty, or just a fragile keep, enforced by bad business in the pandemic?
At least the claims have been staked out for now. Charles von Faber-Castell, 41, will become a member of the Faber-Castell AG Supervisory Board with immediate effect. His stepmother, Mary, 69, who also holds the vice-chairmanship, continues to sit there. Since the death of the company patriarch five and a half years ago, the widow has appeared to the outside world as the placeholder for her young daughters. Of these, the eldest, Katharina von Faber-Castell, 33, is now moving into the board of directors of AW Faber-Castell Unternehmensverwaltung GmbH, the sole shareholder of the AG. She has headed the Corporate Development division since 2018. Her two sisters, the 25-year-old twins Victoria and Sarah, do not have any executive functions in the company structure, but like Charles and Katharina von Faber-Castell they want to “jointly and actively” shape the future of the company, as it is officially called. “In trusting cooperation and in open dialogue between the group of shareholders, supervisory bodies, the board of directors and the entire workforce.”
What sounds good is a laborious and hard-won compromise. It took some time and an external advisor to focus the family on a common ownership strategy and to balance out the individual interests. Had that not succeeded, sooner or later Faber-Castell would have threatened fragmentation in the worst case. The different interests were already complicated enough and meant difficult and time-consuming coordination processes for the company’s managers. Allegedly, after the death of Anton-Wolfgang von Faber-Castell, the American Mary von Faber-Castell and her daughters jointly prevented stepson and brother Charles from making the leap to the top of the company. Instead, Widow Mary initially moved to the board herself.
The ninth generation must initiate reforms
But now everyone involved is in agreement that Faber-Castell should be kept as a family company, according to the message. As an “active group of shareholders”, the four boys want to actively shape the company “in a family-controlled model”. In other words: you are not satisfied with the roles of silent partners, you want to determine and get involved yourself. Their father had transferred the shares in the company to them in four equal parts while they were still alive. Faber-Castell produces more than two billion pens a year, employs 6500 people (at peak times it was 8000) and manages 10,000 hectares of forest in Brazil, from which the wood for pencil production is obtained.
Operationally, Stefan Leitz has been managing the business as CEO since March 2020. He came from the Hamburg canning manufacturer Kühne to Stein near Nuremberg, where Faber-Castell AG resides right next to the family castle. Since then, as the second non-family boss in the company’s long history, Leitz has not only had to grapple with difficult owners, but also with a certain backlog of reforms in the company and the consequences of the pandemic. Sales have been going downhill for years. Faber-Castell ended the 2019/20 financial year with sales of 555 million euros; in the 2020/21 financial year ended at the end of March, sales should have fallen well below half a billion euros. In 2016/17 it was 667 million euros. Faber-Castell does not provide any information on the earnings situation.
The slump in sales is, on the one hand, a consequence of the pandemic that Faber-Castell is feeling especially in its largest sales market, Latin America, but also in parts of Asia. Naturally, when schools and universities are closed for months, fewer writing implements are bought. The cosmetic pencil business is also bad. The devaluation of the national currencies in important sales countries such as Brazil, Peru and Indonesia are also causing great difficulties for Faber-Castell. In the USA, Germany, Australia and New Zealand, however, business went well, according to a spokeswoman. Online trading has increased and the company division, which specializes in artists and hobby artists, even showed an increase of around 30 percent. A strong presence in social networks should boost sales. Faber-Castell has recently been represented on relevant channels. A gift from the company to themselves on their 260th birthday.