The retailer and manufacturer, best known for Wedgwood pottery, Royal Doulton and Waterford crystal, appointed Deloitte & Touche as administrator after it succumbed to hefty debts of €450 million (R5.9 billion) and tumbling sales and profit. Furthermore, customers had started to baulk at its prices during the credit crunch, although the company's fate was not helped by its products falling out of fashion and formal dining largely becoming a thing of the past.
Although the administrators have already received expressions of interest in the businesses, the collapse into administration of the Waterford Wedgwood holding company and nine of its UK and Irish subsidiaries is a far cry from the booming success of the brands during much of its history - and would make the perfectionist Josiah Wedgwood, who founded the Wedgwood brand in 1759, turn in his grave.
Wedgwood, the youngest of 13 children, was born in Burslem, Staffordshire, in the heart of the English potteries. In his early twenties, Wedgwood started working with the most renowned English pottery maker of his day, Thomas Wieldon, and learned a wide variety of pottery techniques.
After founding the company, he achieved a key early success in 1763, when he manufactured a cream-coloured tea and coffee service for Queen Charlotte, the wife of George III. Subsequently, she gave him permission to use the title, Potter to Her Majesty, and to call his new cream ware Queen's Ware, giving the firm an enormous boost.
Wedgwood gained a reputation as a tough taskmaster who had no compunction about venting his spleen if production standards at a workshop were not up to scratch. If he saw a vessel that did not meet his exacting standards, Wedgwood would smash it with his stick and shout: "This will not do for Josiah Wedgwood!"
Wedgwood also created black basalt, a fine black porcelain, which was his first major commercial success,. He later invented the pyrometer, a device for measuring heat in kilns.
In simple terms, one of Wedgwood's great achievements was to become the first company in 18th century England to innovate the perfect mixture of fine bone china, which was extremely popular with the British upper classes.
Before he succumbed to cancer in 1795, Wedgwood passed his company on to his sons, hence the company's official name: Josiah Wedgwood and Sons.
Many of Wedgwood's descendants were directly involved in the management of the company over the years and the fortunes of Wedgwood soared through much of the 19th and 20th century.
In 1986, the firm was acquired by Waterford Glass. Waterford itself has a long and illustrious history dating back to 1783, but the company's name was changed to Waterford Wedgwood in the late 1990s, partly because Wedgwood's profit was significantly higher.
In 2005, it acquired Royal Doulton, the iconic manufacturer of china, in a move that was partly designed to deliver economies of scale. At the time, Waterford Wedgwood's group chief executive, Redmond O'Donoghue, said the deal would "increase the volume through our factories without substantially increasing production costs".
There is no precise point when the fortunes of Waterford Wedgwood started to fade, but the writing was on the wall for some time. Over the years, it had acquired a number of companies. Across its renowned brands, Waterford Wedgwood employed 7 700 staff in the US, Germany, Ireland, UK, Canada, Indonesia, Japan and other Asian countries.
So what went wrong? Even before the credit crunch reared its ugly head in 2007, Waterford Wedgwood, like rival fine china brands, had been struggling. Fellow Staffordshire manufacturer Royal Worcester called in administrators in November.
From a commercial perspective, Waterford Wedgwood found it increasingly difficult to compete with a raft of cheaper imported rivals, many of whom entirely used manufacturing facilities in low-cost countries such as China.
It also suffered from retail giants, such as Ikea, parking their tanks on its lawns and starting to sell mass-produced quality products, as well as department stores, such as House of Fraser and John Lewis, upping their game. Niche players, such as Villeroy & Boch, also started to eat into its market share.
Robert Clark, a senior partner at Retail Knowledge Bank, said: "Its products are luxury items and there is an awful lot of less expensive everyday ware around that people use and are quite cheap, such as from Bhs and House of Fraser."
Waterford Wedgwood has suffered from the weak dollar which, until recently, hit its export costs.
Laura Cohen, the chief executive-designate of the British Ceramic Confederation, thinks that Waterford Wedgwood has suffered from changing dining habits in the UK and elsewhere over the past 20 years. "Whereas dining used to be quite formal, there is a trend these days towards more informal dining," she said.
As its target market has narrowed, it's fair to say that Waterford Wedgwood has also suffered from becoming increasingly viewed as an "outdated" brand.
That Waterford Wedgwood has fallen into administration is certainly not through a lack of trying and financial investments by its major shareholders.
In recent years, its shareholders, including chairman Anthony O'Reilly, his brother-in-law Peter Goulandris and Lazard Alternative Investments, have pumped e400 million into the firm.
As a result, O'Reilly, who is also the chief executive of The Independent's parent, Independent News & Media, and his fellow investors are nursing huge losses.
In a statement, Deloitte said its management had made "exhaustive efforts to restructure the businesses. However, as trading conditions deteriorated, it became apparent that a restructuring of the business could not be achieved in an acceptable timescale."
It is understood that Deloitte has already received a number of expressions of interest from both financial and trade companies interested in buying some of the businesses. Sources said that Deloitte was meeting one of the parties this week.
Whether a bid for the entire company will emerge is unclear, but the brands alone, if sold separately, would attract a huge amount of interest.
Waterford Wedgwood's financial woes tell their own story. For the six months to October 4, the company posted a net loss of e75.8 million, compared with a e57.1 million loss in the first half of 2007. Its first-half sales tumbled by 15.4 percent to e207.6 million.
While there may be bigger administrations facing British industry, it would be a sad day if the brands of Waterford Wedgwood were to just become part of an industrial museum. If Wedgwood's founder were alive during the credit crunch, he would surely say: "This will not do for Josiah Wedgwood!"
Hopes for the future of Waterford Wedgwood were raised this week as a little-known US private equity company said it was in advanced talks to buy the company.
New York-based KPS had signed a letter of intent, signalling its determination to secure a deal to buy many of the company's assets and potentially save 2 700 jobs in the UK and Ireland, said Deloitte & Touche, Waterford Wedgwood's administrators.
The firms were still weeks away from any agreement and it could yet founder over crucial issues such as price, but both sides were working to try to secure a deal by the end of the month, a source familiar with the matter said.
KPS has been in talks with Waterford Wedgwood since last year, before the firm called in the administrators on Monday.
"We commend KPS for its confidence in our company," said the pottery firm's chief executive David Sculley.
KPS specialises in turnaround situations, and has bought businesses in other cyclical sectors that are suffering from the economic downturn, such as US-based car parts manufacturers.
It also prides itself on being union-friendly and being able to hold constructive discussions with labour representatives in the companies it buys.
But Deloitte & Touche said it would continue to holds talks with other firms that had expressed an interest in buying all or part of Waterford Wedgwood.
The accountancy company has said it had received interest from at least 10 firms.
But according to banking sources it is unlikely that many of these suitors will want to buy the whole company.