Jeweller - July, Edition I 2020

Chains through the decade | STATE OF THE INDUSTRY
CHAIN REACTIONS
Australian jewellery retailing has undergone significant evolution over the past
decade, but, surprisingly, the changes are very different to what was expected when
Jeweller published its last State of the Industry Report in 2010.
A
decade on from Jeweller’s first State of
the Industry Report, the jewellery retail
industry – mirroring the broader retail
sector – has undergone momentous change. Yet
over the past 10 years, fine jewellery chain stores
have remained relatively resilient, at least in
terms of store numbers.
However, the same cannot be said for the fashion
jewellery category!
There were 21 fine jewellery chain store ‘brands’ in 2010,
operating a total of 977 stores nationally. On a Like-By-Like
basis, by 2020 that number had declined by 118 stores to 859,
representing a 12 per cent reduction in total store count.
That contraction could be considered small when compared
with the performance of other consumer categories.
Some fine jewellery chains – such as Prouds and Michael Hill
– managed to increase overall store numbers, while others
marginally decreased.
Only two ‘names’ entirely disappeared from the list: Blue
Spirit, a lesser-known small franchise, which operated six
stores in 2010, and the high-profile Thomas Jewellers, with
nine stores.
James Thomas founded Thomas Jewellers in 1896 in
Ballarat. After 121 years of operation, the Thomas family
decided to close its iconic Bourke Street Mall store in
Melbourne in October 2017, as well as the Warnambool,
Wagga Wagga, Albury, Shepparton, Bendigo, Ballarat and
Geelong stores.
In contrast, of the seven fashion jewellery chains listed in the
State of the Industry Report (SOIR) 10 years ago, only one
remains – six closed their physical stores.
The proverbial ‘last man standing’, Lovisa, has grown from 35
locations in Australia to 140 over the past decade, following
the liquidation and closure of major competitors and smaller
fashion jewellery chains alike – including its sister chain Diva.
The ‘downfall’ of the six fashion jewellery chains means
that of the 378 stores that were operating in 2010, 343 no
longer exist.
Demise of fashion chains
For the purpose of research and a report, it is necessary
to create definitions in order to accurately measure and
compare results across categories and over time.
Therefore, a ‘chain’ is defined as a group of five or more
BY THE NUMBERS
Chain Insights
In this report, a ‘chain’
is defined as a group of
five or more jewellery
stores trading under
the one (brand) name,
with one ownership
entity – a person or
company –
co-ordinating buying
and marketing
activities across the
group. It could include a
franchise operation.
859
fine jewellery
chain stores
remain open as
at July 2020
343
of 378 fashion
jewellery chain
stores have closed
since 2010
50%
chains in
Australia are
owned and / or
controlled by New
Zealand entities
jewellery stores trading under the one (brand) name, with
one ownership entity – a person or company – co-ordinating
buying and marketing activities across the group. It could
include a franchise operation.
In addition, Jeweller notes that a chain store usually has
central management and standardised business methods
and practices and will purchase product from both local
suppliers and/or import its own product.
In 2020, Lovisa is the largest fashion jewellery chain
operating in Australia. The ASX-listed BB Retail Capital,
founded by retail entrepreneur Brett Blundy, owns it.
TABLE 1: FASHION CHAINS STORE COUNT 2020 VS 2010
Chain 2010 2020 Variance
Diva 176 0 -176
Equip Accessories 104 0 -104
Lovisa 35 140 105
Magnolia Silver 22 0 -22
Butterfly Silver 20 0 -20
Bijoux 11 0 -11
Myka 10 0 -10
TOTAL 378 140 -238
Of the 7 chains in 2010, 6 collapsed and/or closed their physical stores
to move online. Of the 378 fashion jewellery stores in 2010, 343 closed.
Lovisa’s current store count is 140; however, an article
published by Jeweller in May 2014 detailing the closure
of Lovisa’s 176-store sister chain Diva – also owned by
BB Retail Capital – noted that Lovisa had 158 stores
across Australia.
Therefore, even though Lovisa has had an impressive
increase of 105 stores since 2010, it has rationalised
its store count over the past few years by closing at
least 18 outlets.
The demise of Diva is interesting. It was launched in 2003
by husband and wife team Colette and Mark Hayman, and
within two years it had expanded to 83 stores. It was sold
to BB Retail Capital in 2005.
By 2007, a further 72 stores had been opened, bringing
to 131 the total retail outlets in Australia.
Diva operated a further 369 stores overseas, primarily
targeting teenage girls, while Lovisa promoted itself as
being able to “fill the void for high quality, fashion forward
and directional jewellery.”
In 2010, and after a three-year absence from the industry
July 2020 | 33