Over the past year or so investment analysts and commentators have devoted an increasing amount of attention to the new-economy sectors of the market. Given the excitement and hype associated with the rapidly evolving world of technology and media stocks, it is not surprising that these sectors have been grabbing most of the headlines.

By contrast many old-economy stocks have seen their share prices slump under the weight of increasing competition and the need to invest heavily in new technologies just to preserve their market positions.

One of the worst affected sectors globally has been retailing as the Internet threatens to replace "bricks and mortar" businesses with cheaper and more accessible methods of retailing.

The sector's difficulties have been exemplified by the fall from grace of companies such as Marks & Spencer and Sainsbury in the UK. Marks & Spencer's profits have been tumbling for over two years and the company announced a cut in its dividend at its recent financial results presentation.

While this may mark a turning point in the company's prospects, it is still doubtful as to whether the company can ever regain its previous pre-eminent position in British retailing.

The situation in the grocery sector has proved to be equally grim for the one-time market leader, Sainsbury. Its new chief executive recently stated that a massive investment programme was required to make up for years of under-investment in the business. In the short-term, profits will decline as the company spends millions bringing its outmoded systems up to date.

Not surprisingly the shares fell sharply on this announcement.

In the Irish market, there are very few quoted companies operating in the retail sector. Arnotts is the only quoted clothes retailer and it has been able to expand its business due to the rapid growth of the domestic economy.

Waterford Wedgwood operates in the luxury goods sector, primarily as a producer of luxury crystal glass and tableware. Although it retails directly to the consumer, much of its sales occur through large international department stores.

Waterford Wedgwood has had many years of operating in difficult market conditions and, indeed, the long-term viability of the Waterford glass operation was under threat in the early 1990s. It was only a strong performance from the Wedgwood business that kept the company afloat during this period. Subsequently, the Wedgwood business suffered from declining demand.

However, several years of decisive management action have paid off and the Waterford Glass business, in particular, is now thriving. For calendar year 1999, buoyant crystal sales linked to the Millennium and an end to several years of weighty restructuring charges led to a 34.7 per cent rise in pre-tax profits.

Waterford Wedgwood's share price responded positively to these results to leave the shares as one of the better performers on the Irish market so far this year. However, over longer periods, the shares have under-performed and are still below the level of 115 cents at which they were trading just over two years ago.

Despite the disappointing investment returns from Waterford during the 1990s, it does seem as if the company could well produce better returns to shareholders in coming years. Costs of production are now well under control and the company offers a wide range of luxury crystal and tableware goods across international markets.

Strong economic growth and rising incomes provide a favourable backdrop for a luxury goods producer such as Waterford Wedgwood.