Neither writing instruments nor cosmetic pencils were among the consumer items that were in demand during the past two pandemic years. On the contrary: When schools and offices are closed, there is less painting, drawing and handwriting. And who puts make-up on their lips when they have to put a mask over their mouth and nose? Instead, outdoor exercise was the order of the day and with it the appropriate equipment, from suitable clothing to backpacks. But that alone does not explain the extraordinary upswing that the Schwan-Stabilo group of companies experienced during the Corona crisis.
The Franconian group with its 5,100 employees, which is exclusively owned by the extensive Schwanhäußer family of industrialists, combines three business areas, of which at most two (in terms of development and production) are distantly related: namely writing implements and cosmetic pencils. The third division is out of the ordinary. With the backpack manufacturer Deuter and clothing brands such as Ortovox and Maier Sports, Schwan-Stabilo is also active in the outdoor business. A diversification that proved to be an element of success during the crisis.
The group of companies ended the 2021/22 financial year, which ended at the end of June, with a jump in sales of 20 percent to 745.3 million euros. The cosmetics division grew the most (plus 37 percent), which produces lipsticks, eyeliner and other colored cosmetics for almost all major international brand manufacturers. The Stabilo writing instrument division, known for decades primarily for the highlighter of the same name, grew by a moderate 3.1 percent to EUR 215.8 million. The business of Schwanhäußer’s outdoor brands increased by 20 percent; For the first time, sales exceeded 200 million euros, 216.9 million to be exact. “The past financial year has shown that Schwan-Stabilo can be successful even in times of crisis,” commented CEO Sebastian Schwanhäußer and also attributed the “strong result” to the strength that, in his view, is inherent in family businesses even in difficult times. You should see it similarly with the pen rival Faber-Castell; the manufacturer, located just a few kilometers from Schwan-Stabilo in the Franconian town of Stein, is also family-owned. Faber-Castell also came through the pandemic well and, in addition to full order books, recently reported significant sales growth of 15 percent to 525 million euros.
Sebastian Schwanhäußer attributes the success of Schwan-Stabilo primarily to his own “strong brand portfolio”. The fact that the company has fundamentally changed its cosmetics division, the biggest source of revenue, also plays a role. Out of necessity, because business had gotten worse and worse in recent years. For too long, the Schwan Cosmetics subgroup had rested on its old business model, which – to put it bluntly – worked like this: As a supplier, you waited at the company headquarters in Heroldsberg north of Nuremberg to see what trends the big customers, namely the global cosmetics brands, were calling out and wanted to have implemented. According to today’s interpretation of the management, own innovations were too rare and on top of that were more technically driven than due to fashion trends.
In the meantime, the development team around CEO Tomás Espinosa thinks and acts as if Schwan were its own label. Trend scouts are on the move around the world to find out early on which colors and forms of application, but also sales lines, are on the rise. Gone are the days of the Avon consultant (a big Schwan customer) who came to the house and from whom the mostly female customers ordered lipsticks and mascara, which were then delivered days or even weeks later. Selected and ordered today, delivered tomorrow. “The change from an internal perspective to an innovation and customer-oriented perspective pays off,” says Tomás Espinosa. “The reorientation helped to find back to old strength faster than expected.” In the meantime, Schwan is closer to the customers again and makes “cosmetics as a whole more emotionally tangible”.
They can actually paint in Heroldsberg, in any form and type of use. This also applies to writing instruments, where Schwan, unlike Faber-Castell, does not primarily rely on pencils and expensive fountain pens, but on the colored center. Colorful felt-tip and highlighter pens for schools and offices, which are aimed primarily at young consumers. In marketing, Schwan-Stabilo relies on influencers and technical gimmicks, such as colored pencils networked with an Apple app.
However, because the younger generation is more concerned with sustainability than almost any other topic, Schwan-Stabilo is trying to reflect this megatrend as well. By shortening transport routes, drastically reducing energy consumption and paying more attention to avoiding possible pollutants or microplastics in raw materials for cosmetic products. Schwan-Stabilo itself wants to be climate-neutral by 2025. The purchase of a company from the outdoor sector was also recently due to the issue of sustainability. The previous range of brands with Deuter, Maier Sports, Ortovox and Gonso was supplemented with a stake in Doghammer, a start-up from Rosenheim in Upper Bavaria that manufactures shoes with a minimal ecological footprint. Manufactured largely from cork and by hand, from vegan materials.
The time of the pandemic was used well, says CEO Sebastian Schwanhäußer. He is also optimistic for the current financial year, which started in July, although he expects sales to increase by at most ten percent. Business is good, the order books are full. Political and economic uncertainties aside – “we take a relaxed view of developments,” says Schwanhäußer. He wants to “act instead of react” and “remain flexible”, because one thing is clear: “There will be no new normality after the crisis.”