Jeweller - August 2020

jeweller

• Tech’s appeal: Understanding your customers’ e-commerce expectations
• Balance of power: Review of retail leases and negotiation in the post-covid environment
• Market update: new and bestselling products from leading suppliers

VOICE OF THE AUSTRALIAN JEWELLERY INDUSTRY AUGUST 2020

Tech’s appeal

UNDERSTANDING YOUR CUSTOMERS’

E-COMMERCE EXPECTATIONS

Balance of power

REVIEW OF RETAIL LEASES AND NEGOTIATION

IN THE POST-COVID ENVIRONMENT

Market update

NEW AND BESTSELLING PRODUCTS

FROM LEADING SUPPLIERS


t

a

e

I N T E R N A T I O N A L

J E W E L L E R Y & W A T C H F A I R

s

a

f

e

t

y

e

s

m

i

t

r

t

e

p

r

x

e

s

YOUR SAFETY IS OUR PRIORITY

Safety plans in place to protect visitors, exhibitors and staff

at the event.

Social Distancing will be encouraged and monitored

throughout the event for your safety and the safety of others.

To minimise queuing and contact all visitors are required to

pre-register for entry tickets.

The teams have been trained to deliver new cleaning procedures.

As a condition of entry, everyone will be assessed and those

with COVID-19 related symptoms will be refused entry.

For details and updates on the International Jewellery & Watch Fair

please visit jewelleryfair.com.au

Organised by

Est. 1990


Only $6,495 USD

yehuda.com +1.212.221.5985


THE SHErlOck HOlmES 2.0

lab-Grown Diamond Detector

by

12 Synthetic Diamond Detectors that can check multiple stones and

jewellery were tested by the ASSUrE Program.

ONlY 2 were found to detect All of the Synthetic Diamonds tested.

Thus, giving you 100% PrOTEcTION!

For your convenience, please check out the table below for the synthetic detection rate of

all 12 detectors that can test multiple stones and jewellery at once.

Manufacturer

Detector

Synthetic Diamond

Accuracy (%)

Price in

$USD

Yehuda

The Sherlock

Holmes 2.0

100% $6,495

De Beers Group SYNTHdetect 100% $18,500

NGTC GV5000 99.00% $43,200

DRC Techno J-Smart 89.40% $22,499

Arotek/GII QChKAdC 88.90% $7,700

DRC Techno D-Secure+ 85.90% $11,999

DRC Techno J Detect 9000 85.40% $9,999

Gemometrics GemPen 84.90% $2,300

DRC Techno J.Mini 84.40% $6,499

Massive Tech Lab G-certain 82.40% $9,999

Massive Tech Lab J-Certain 80.40% $13,999

Taidiam Technology

DiamondDect 5

(HPHT only)

77.40% $5,730

Scan the QR Code below to read the full report of the Assure Program

performed by UL Laboratories, and see for yourself.

yehuda.com


Looking for new product ideas? Maybe you have an unusual request for a diamond or gemstone or perhaps

you need a new supplier for your bread and butter items? Or you are looking for a new watch brand?

The 2020 Suppliers Directory – the “Bible” of the Australian and

New Zealand jewellery industries – has all the answers.

STILL

THE #1

DIRECTORY

280+

Product

Categories

4

Distinct Category

Sections

Individual

Industry

580 Suppliers

Jewellery &

520+ Watch Brands

Suppliers - Are you and your products listed? Retailers – Have you got your copy?

Email info@jewellermagazine.com

Not only is the Supplier Directory the largest and most comprehensive

industry database, you can access it online through any device 24/7.

www.jewellermagazine.com


AUGUST 2020

Contents

This Month

Industry Facets

10 Upfront

24

10 YEARS AGO

Time Machine: August 2010

12

FACTS & FIGURES

COVID-19 Update

26

MY STORE

The Collective

14 Monthly Showcase

17 News

29

52

54

LEARN ABOUT GEMS: BACK IN TIME

Colour change gemstones

MY BENCH

Laurie Moffatt

SOAPBOX

Darren Roberts

Features

30

COVID-19 IMPACT – PART II

Seeing eye to eye: Retail rent review

30 RENT REVIEW FEATURE

New lease on life

Jeweller explores how the COVID-19 pandemic

has tipped the balance of power between retail

landlords and tenants.

Better Your Business

41

CUSTOMER STRATEGY

STEVEN VAN BELLEGHEM reveals how technology is shaping customer relationships.

44

46

48

50

SELLING

To increase sales and satisfaction, listen up, advises RICHARD SHAPIRO.

MANAGEMENT

Make employee performance reviews count, writes BARBARA CROWHURST.

MARKETING & PR

BARRY URQUHART discusses the best ways to cut through the marketing ‘noise’.

LOGGED ON

DAVID BROWN explains how to audit your business’ online presence.

29 LEARN ABOUT GEMS

Colour change gems

4Discover the captivating

qualities of chameleonic

gemstones across the

colour spectrum.

FRONT COVER The Thomas

Sabo Magic Garden collection

continues to inspire and

delight, with delicate pieces

evoking the beauty of nature.

August 2020 | 7


S A MS GR O UP

A U STRA L I A

WE’LL RISE ABOVE THE STORM

These are unsettling times, with COVID-19 impacting our

professional lives and those close to us. We understand it

is challenging to operate under current restrictions, however

we’re getting through this together one day at a time and

there is a light at the end of this tunnel.

Despite the circumstances, take care and make time to

do the things you love with the people you love; it’s

never been more important to support one another, remain

positive and keep smiling.

Wishing you a safe passage through this difficult period.

We’ll rise above the storm.

Steve Der Bedrossian

CHIEF EXECUTIVE OFFICER

ARGYLE PINK

DIAMONDS

Semi Precious Jewellery

T: 02 9290 2199 F: 02 9262 1630 E: Pink@samsgroup.com.au W: Samsgroup.com.au


It all comes together at Palloys

A world first in jewellery production management

Your It all singular comes destination together for all at things Palloys jewellery

A world first in jewellery production management

Your singular destination for all things jewellery

Combining AGS Metals|PJW, A&E Metals, Regentco and Palloys all in the one place, Palloys

Combining AGS Metals|PJW, A&E Metals, Regentco and Palloys all in the one place, Palloys

1300 886 108 | AUSTRALIA WIDE

palloys.com

1300 886 108 | AUSTRALIA WIDE

palloys.com

From ou

BECOME

STO

Due to an increa

we are upgradin

function on our

are trying to kee

vibrant and bus

Please visit w

or call our frie

for more infor


Upfront

#Instagram hashtags to follow

Alpha Order

#chainbracelet

#jewelleryblog

Stranger Things

44,251+ POSTS

#chunkyjewelry

145,628+ POSTS

#menswatches

Weird, wacky and wonderful

jewellery news from around the world

42,899+ POSTS

486,930+ POSTS

Crashed up

#diamond

15.8 MILLION POSTS

#estatejewelry

215,639+ POSTS

#goldnecklace

492,008+ POSTS

HISTORIC GEMSTONE

The Black

Orlov

The Black Orlov, set

in a diamond brooch

and necklace

The 67.5-carat Black Orlov diamond is

famous for its alleged ‘curse’. It was

once part of a much larger stone called

the Eye of Brahma, which – legend has

it – was stolen from an Indian temple

before surfacing in Russia in the early 20th Century.

#rosegoldjewelry

98,500+ POSTS

#sustainablejewelry

125,835+ POSTS

#vermeil

65,625+ POSTS

Two of its owners – Princess Nadia Vygin-Orlov and US jeweller

JW Parris – committed suicide before the diamond was cut into

three pieces in an attempt to break the curse. Renamed the

Black Orlov in the princess’ memory, the stone was set in a

brooch of 108 diamonds, suspended from a diamond necklace.

It was purchased by jeweller J Dennis Petimezas in 2004 and has

been displayed in several museums since.

Celebrity Style

4 US actress Joey King has modelled

a beautiful range of jewellery during the

digital press tour for her latest Netflix

film. Her stylist Jared Eng selected a

particularly eye-catching set of hoop

earrings by Alexander McQueen for the

LA online premiere.

Image credit: Instagram/jaredeng

4Talk about turning ‘crash’ into

treasure! US brand Crash Jewelry

creates jewellery from parts of

wrecked luxury vehicles. Jeweller

Christi Schimpke crafts necklaces,

earrings, cufflinks, and bracelets

using metal sourced from her

husband’s LA car repair workshop,

combined with precious gemstones.

Pieces made from Porsche,

Ferrari, and BMW cars are

her bestsellers.

Million-dollar mask

4An Israeli jewellerhas been

commissioned to create a

COVID-19 protective face mask

valued at $US1.5 million. Isaac

Levy, jewellery designer of the

brand Yvel, says the 18-carat white

gold mask will be fitted with an

N99 filter, and be covered in 3,600

white and black diamonds.

“I am happy that this mask gave us

enough work for our employees to

be able to [keep] their jobs in very

challenging times,” Levy said.

Digital Brainwave

An Instagram

spokesperson said

the company is

exploring options

to monetise Reels

for businesses,

though details are

yet to be finalised.

4Instagram has introduced a new feature,

Reels, which enables business and personal

accounts to create short-form videos. The

15-second clips mimic the format of the

popular social media app TikTok. The clips

can be annotated with captions and and

edited with fun visual effects.

While advertising is yet to be integrated into

the Reels feature, it is still useful for brands

to create engaging and entertaining content

for followers. However, business accounts

are currently unable to use music or branded

content tags, and cannot pay to have their

Reels promoted.

Jewel Watch

4Louis Vuitton presents a new

unisex jewellery collection, LV Volt

(as modelled by French artist Sharon

Alexie, above), which reshapes the

fashion house’s signature letter logo as

a recurring motif.

Bite the dust

4New York City publication

Brooklyn Paper reports that a

mugger stole a man’s gold teeth

after ambushing him in his car

earlier this month. The victim told

police that his assailant held him

at gunpoint and stole a ring and

cash as well as the false teeth.

While unusual, the crime is not

unprecedented; in 2016, a man

was assaulted on the street in

San Francisco’s Financial District

before two robbers stole his gold

teeth and mobile phone.

VOICE OF THE AUSTRALIAN JEWELLERY INDUSTRY

Published by Befindan Media Pty Ltd

Locked Bag 26, South Melbourne, VIC 3205 AUSTRALIA | ABN 66 638 077 648 | Phone: +61 3 9696 7200 | info@jewellermagazine.com

Publisher & Managing Editor Angela Han angela.han@jewellermagazine.com • Assistant Editor Arabella Roden arabella.roden@jewellermagazine.com

Advertising Toli Podolak toli.podolak@jewellermagazine.com • Accounts Paul Blewitt finance@befindanmedia.com • Subscriptions info@jewellermagazine.com

Copyright All material appearing in Jeweller is subject to copyright. Reproduction in whole or in part is strictly forbidden without prior written consent of the publisher. Befindan Media Pty Ltd

strives to report accurately and fairly and it is our policy to correct significant errors of fact and misleading statements in the next available issue. All statements made, although based on information

believed to be reliable and accurate at the time, cannot be guaranteed and no fault or liability can be accepted for error or omission. Any comment relating to subjective opinions should be addressed

to the editor. Advertising The publisher reserves the right to omit or alter any advertisement to comply with Australian law and the advertiser agrees to indemnify the publisher for all damages or

liabilities arising from the published material.


With the recent announcements of

government restrictions starting to be

rolled back, jewellers now have the

opportunity to get customers back

into the store.

Effectively communicate the

changes that have taken

place without spending

all their time on the phone.

Do you do custom rings?

Yes we do! Pretty much

everything is customisable,

from setting to stone to cut.

What are you looking for?

Get the free

Texting Guide

CLAIM YOUR COPY

We’re wanting to create a

unique engagement ring.

Wonderful, congratulations!

Come on in and we can go

through all the options.

61.478.189.947


COVID-19 Update

9.5%

decline in the Westpac-

Melbourne Institute Index

of Consumer Sentiment

between July and August

* Westpac Consumer Sentiment Survey highlights, 12 August

6 October

Commonwealth Budget to be

announced, including decisions on

further stimulus payments, business

support, and tax reform

$5,000

additional grant available to Victorian

small businesses – both metropolitan

and regional – from the State

Government’s Business Support Fund

due to the impact of stage-four lockdown

To qualify for the extended

JobKeeper scheme, employers

now need to show a 30 per

cent decline in revenue for

the September and December

quarters; employees hired

from 1 July are now eligible

DR PHILIP LOWE

GOVERNOR, RESERVE BANK

OF AUSTRALIA

“The economy is not going to

recover until we get on top of

this virus. From the outset there

was a very strong sense that

we needed to build a bridge to

the other side when the virus is

contained. That bridge has had

to be longer than we might have

hoped to be necessary, even so,

it’s been the right strategy.”

DANIEL ANDREWS

PREMIER OF VICTORIA

“We want businesses

to survive this pandemic. We want

people healthy and back at work.

We want to begin the process of

rebuilding our economy and our

community and setting us up for

the future. We can’t get to that

point unless we all play a part

in making this strategy work,

but we will continue to support

businesses to the other side.”

DR ELOISE ZOPPOS

RESEARCH FELLOW,

AUSTRALIAN CONSUMER

RETAIL STUDIES UNIT –

MONASH UNIVERSITY

“Victorians are well placed to

adjust to the ‘new normal’... While

we can’t know exactly what the next

few weeks will bring in Victoria,

we do know that consumer and

shopping behaviours were already

changing, and we can only expect

these changes to continue.”

48,000

Australians applied to

access up to $10,000 of

their superannuation in

the week to 2 August *

* Australian Prudential Regulation Authority

60%

of surveyed

Australians who received

government stimulus

payments said they spent it,

rather than saving

* ‘Australian Financial Review’, 10 August 2020

$101.3bn

estimated total cost

of the JobKeeper

scheme until

March 2021

Australian

Financial Review

Gemfind Digital

Solutions

World Diamond

Congress

Pip Marlow, CEO

Salesforce ANZ,

Charles Coorey,

partner Gilbert +

Tobin, and Dr Billy

Sung of Curtin

University will take

part in the event.

4The Australian Financial

Review will host the third

instalment of its Future

Briefing virtual event series

on 29 September. The webcast

will explore the new reality

of consumer behaviour and

demand of online shopping.

Topics covered will include

e-commerce opportunities

and trends, and how to create

strong brand engagement and

personalised experiences.

Gemfind’s Alex

Fetanat and

Anthony Arechiga

will explore

digital marketing

strategy and

website best

practices.

4US jewellery-focused

digital marketing firm

Gemfind Digital Solutions

continues its ongoing

webinar series for retailers

on 19 August.

The session, held in

partnership with the

Independent Jewelers

Organization, is entitled,

‘The Road Map to Successful

Online Selling for Jewelers’.

The biennial

Congress was

scheduled to be

held in Hong Kong

in November, but

has been moved

online due to

COVID-19.

4The next World Diamond

Congress will be held digitally

from 14–15 September 2020,

the World Federation of

Diamond Bourses (WFDB)

has announced. Yoram Dvash,

acting president WFDB, said,

“This is the first time that

we will be holding the entire

Congress in this format,”

adding that the event was

coming at a “critical time” for

the diamond industry.

12 | August 2020


Let’s Talk

It’s always important to talk, but right now – in the middle

of a worldwide economic crisis – it’s more important than

ever to talk and work together.

As we emerge from COVID-19 we want to ensure Duraflex Group

is listening and adapting to your needs as a true business partner.

Duraflex Group is here to support you during this recovery

period, and to help you succeed in 2020 and beyond. We are

open to discussing anything you need to assist your business

during this challenging time.

Phil Edwards

MANAGING DIRECTOR, DGA

We are here to listen and provide support for your business.

Duraflex Group is here to help you succeed.

For more details please call (02) 9417 0177 and talk to your Sales Executive to discuss.


Bestsellers

1

2

3

4

AUGUST

Monthly

Showcase

Jeweller’s compiled snapshot

of bestselling pieces from

leading suppliers.

5

6 7

8

1 QUDO | Timesupply The Tondo and Tondo Deluxe tops from Qudo are a perennial favourite, while the new Eternity Spacer rings are proving equally popular with customers who love the exciting and

personalised Qudo range. 2 STOW LOCKETS | Link Wholesale Stow Lockets are handcrafted from the finest materials. Each locket can be carefully stylised by adding meaningful charms, creating a

sentimental heirloom jewellery piece. 3 PIERRE LANNIER | Heart & Grace The Pierre Lannier Capital Chronograph is a stylish and sophisticated addition to any watch collection. 4 IKECHO AUSTRALIA

The Keshi Freshwater Pearl Hook Earrings combine simplicity with elegance. Crafted in sterling silver with 14–16mm Keshi pearls. 5 GEORGINI | West End Collection The Sonutosa range – part of

the Luxe Collection – is a refined take on geometric shapes. The bold squares and rectangles are accentuated with Georgini’s signature sparkle to make a style statement. 6 THOMAS SABO | Duraflex

Group Australia The Colourful Lucky Symbols necklace, made from 925 sterling silver plated in 18-carat yellow gold, features glass-ceramic decoration as well as synthetic ruby, and pink and white

zirconia. 7 Baume & Mercier | Duraflex Group Australia The Hampton Collection features a unique style emblematic of the Art Deco era and is immediately distinctive for its rectangular design. 8 PINK

KIMBERLEY | SAMS Group Australia The Kimberley Rae Ring features a trinity of emerald-cut white diamonds set in 18-carat rose and white gold and adorned with beautiful Argyle pink diamonds.


News

Sydney Jewellery Fair postponed to October

The International Jewellery & Watch Fair is now scheduld to take place in October.

The organiser of the International Jewellery &

Watch Fair (IJWF), Expertise Events, has postponed

the show by four weeks, from 12–14 September to

10–12 October 2020.

Gary Fitz-Roy, managing director Expertise Events,

told Jeweller that the decision to move the show

date was made earlier this week, prior to the

announcement of new border restrictions between

NSW and Queensland, and increasing COVID-19

case numbers in Victoria.

“We’re making our decisions based on what’s best

for the industry, rather than a particular state. We

haven’t reacted to Victoria, we haven’t reacted to

Queensland. No-one knew the announcement

[from the Queensland Premier] was coming – we

certainly didn’t.

“We made a commitment to the industry that we

would give an update on the show at the end of

July, and we’ve been transparent in our

communication and shared the good, the bad,

and the ugly,” Fitz-Roy said.

In an email to exhibitors, Fitz-Roy confirmed that

the mid-October dates had only recently been

made available by International Convention Centre

Sydney, adding that the extra four weeks would

give “more time for state border restrictions to

be reviewed, especially given most states have

resumed to near-normal business operations”.

He added, “If we’d made this decision two weeks

ago, we would have been jumping the gun. We

are making the next decisive move that is in the

best interest of the industry. Will everyone like it?

Possibly not. But if we’re going to have any industry

to come back to, and if retailers are going to survive,

it’s got to start with something.

“It’s our desire and hope that the October new

dates will give us an opportunity to reconnect, do

everything we’ve talked about, and move forward.”

The Spring Gift & Lifestyle show, which was

scheduled to run concurrently with the IJWF at the

ICC Sydney exhibition centre, will also take place on

the new October dates.

The exhibitor email states that the later schedule

“provides more time for State border restrictions

to be reviewed, especially given most states have

resumed to near normal business operations. It will

also allow buyers a little more time to gauge their

stock levels in time for Christmas, and although we

do know this could mean some suppliers will need

to review their own supply levels and timing we

believe it’s the ‘greater good theory’.”

Fitz-Roy told Jeweller he also believes the new

dates are more suitable because “there are no

international shows, so the sourcing and supply of

stock for the busiest period, being Christmas, is

still important. Sooner or later, retailers are going

to need stock. And significantly, not many retailers

have had visits from suppliers [this year],” he

explained.

Expertise Events previously announced several

initiatives aimed at reducing costs for exhibitors,

including new modular stands and the Expertise

Mate discount program.

Addressing safety concerns, Fitz-Roy said delaying

the show was “realistic” and would provide enough

time for case numbers to stabilise in Victoria.

“We have to accept that we will have COVID-19

among us for some time. So I think what [moving

the dates] means is that it gives all states a bit

more time to get things under control and they are

obviously ramping that up,” he explained.

Expertise Events will provide a further update on

the Sydney shows on 4 September. The Gold Coast

Gift & Lifestyle fair will proceed as planned on

26–28 September.


News

In Brief

David Allen returns to lead Pandora

Australia; Phil McNutt steps down

Gold price reaches

record high

4 Amid an investor surge, the gold price

has broken its previous record high.

Gold reached $US2,075 per ounce on

7 August – exceeding the previous record of

$US1,917, which was set in August

2011. However, the price has since dropped

back below $US2,000. The gold price

has seen an upward trend throughout

2020 as a result of uncertainty in other

areas of the world economy.

Record-breaking colour

diamond found in Russia

4Russian mining giant Alrosa has

confirmed that it has unearthed the

largest natural colour diamond ever

found in Russia. The 236-carat rough

– which displays a yellowish orange

colour – was mined at the Ebelyakh site in

Yakutia. Pavel Vinikhin, head of polishing

Alrosa, said the stone was being evaluated

to determine if it would be cut in-house at

Alrosa or sold as rough.

Apprentice competition

revamped for 2020

4Nationwide Jewellers has launched its

2020 Apprentice of the Year Competition,

with key changes. This year, apprentices

have been given a customer brief

including thoughts, ideas, and budget to

reflect the market demand for custommade

jewellery. Entry forms have been

snt to Nationwide members in Australia

and New Zealand. The winner will be

announced in November.

GIA embraces artificial

intelligence

4The Gemological Institute of America

(GIA) is developing an artificial

intelligence (AI) system for diamond

clarity grading, alongside IBM. Pritesh

Patel, chief operating officer GIA, said

AI clarity grading works by feeding

data gathered from GIA’s thousands of

reference stones into a program, which

then is used to ‘train’ algorithms on

how to grade for clarity. The system is

currently being trialled at two GIA US labs.

David Allen – who previously led Pandora Australia from 2012–2015 – has returned to take over management of

the new Pacific regional division, which includes Australia, New Zealand, and Fiji.

As part of Pandora Jewelry’s global

restructuring, David Allen – who led Pandora

Australia between 2012–2015 – will return to

head up the new Pacific regional division, with

current managing director Phil McNutt leaving

the company.

Allen had been based at Pandora’s global

headquarters in Copenhagen, Denmark for the

past five years, where he oversaw its Europe,

Middle East and Africa operations.

Speaking to exclusively to Jeweller about his

return, Allen said, “It is wonderful to be back,

Australia is home, and we all missed her very

much. My family and I have had an incredible

life and professional experience abroad and I

will always be truly grateful for the opportunity

that was given to us.”

He added, “One of the first things we did when

we got back was to have a barbecue – not that

we didn’t have barbecues in Denmark, but

there is nothing quite like an Aussie barbecue

on a Saturday afternoon with a cold beer!”

When the restructuring was initially announced

in March 2020, Allen was confirmed to be

staying with the company in an unspecified role.

Internationally, 180 redundancies were

expected, with Kenneth Madsen, president

Pandora Asia-Pacific, among those leaving

the company.

At the time, a spokesperson for Pandora

Australia told Jeweller that McNutt – who was

appointed managing director in January 2019

– would take over as general manager of the

new Pacific regional division, which includes

Australia, New Zealand and Fiji.

Jeweller also previously contacted McNutt

regarding potential job losses and staffing

changes at Pandora Australia’s head office in

Sydney, but those questions went unanswered.

Pandora Australia’s revenue has declined each

year since 2017. Throughout 2019, revenue

fell by double digits each quarter; the most

significant drop was in the three months to

November 2019, when it fell by 23 per cent.

“It is wonderful to be back, Australia

is home, and we all missed her very

much. My family and I have had an

incredible life and professional

experience abroad”

– David Allen, Pandora Jewelry

It has also undergone something of a

management merry-go-round, having been led

by three different executives: Brien Winther,

who was transferred to Pandora British Isles

after 13 months, Mikael Kruse Jensen, who left

to manage Pandora Northern Europe following

less than two years in the role, and Phil McNutt,

who joined the company from Sunglass Hut in

January 2019.

When asked about the differences between the

Australian and EMEA markets and the changes

in Australia over the past five years, Allen

said, “It is of course very important for me to

understand if and how the market has changed

– as I am sure that it has – and I will invest time

in understanding this. This will in turn help the

team and I understand the role that Pandora

will play moving forward.”

Some industry commentators have noted

that Pandora’s local problems may have

CONTINUED ON PAGE 20

18 | August 2020


SUPPORT SERVICES FOR

INDEPENDENT JEWELLERS

• Marketing • Sales Training • Business Planning

• No joining fee

• No agency fee

• no security deposits

no fees ever!

FREE Recovery, Support Services and

Strategies for successfully

overcoming Covid-19

- STAY 100% INDEPENDENT -

the largest network with over 450 jewellery stores

P: +61 2 9418 0000

E: info@jgbs.com

www.jgbs.com


What You

Need When

You Need It

For 50 years, we have worked

to provide fast service and

enduring support to jewellers

across the world.

As you open your doors once

again, know that Stuller is

here to help — with services,

custom orders, and in-stock

essentials you need.

Stuller.com

+3493-754-7774


News

Indian jewellery body to host international digital trading event

India as well as buyers from across the world an

opportunity to interact and make decisions in a

similar way as they used to do at a

physical show”.

Dilip Shah, convener international GJEPC, added,

“The VBSMs will help our buyers to check out

new product developments without travelling,

explore new sourcing opportunities, compare

and analyse products and services of exhibitors

without any distraction.”

The Gem & Jewellery Export Promotion Council has announced the first in a series of Virtual Buyer and Seller Meets.

The Gem & Jewellery Export Promotion

Council (GJEPC) has announced it will hold

a Virtual Buyer and Seller Meet (VBSM) on

27–28 August to allow Indian manufacturers to

showcase diamond jewellery and loose stones to

international buyers.

Products will be displayed on a dedicated secure

GJEPC website with a user-friendly search

function. Registered buyers and sellers will then

be matched through the site and have video

meetings scheduled and managed by the GJEPC,

alongside a team of international coordinators.

The GJEPC postponed the India International

Jewellery Show (IIJS) Premiere – the country’s

largest jewellery trade fair – earlier this year

due to the COVID-19 pandemic; it had been

scheduled to take place from 6–10 August.

Another major Indian diamond trade event,

Bharat Diamond Week, was held digitally last

week.

Colin Shah, chairman GJEPC, said, “The demand

for gems and jewellery is slowly recovering in

markets like the US, China and other parts of

the world. We need to make sure that we reach

out to these buyers and meet their requirements.

“This is the time to explore the digital world,

and make the best use of it to showcase our

products through virtual medium and help

buyers make informed decisions.”

Vipul Shah, vice-chairman GJEPC, explained

that the VBSM would “give our exhibitors in

“The demand for gems and jewellery

is slowly recovering in markets like

the US, China and other parts of the

world. We need to make sure that we

reach out to these buyers and meet

their requirements. This is the time to

explore the digital world”

– Colin Shah, GJEPC

He added, “I am glad that we have been able to

create an advanced user-friendly set-up which

would give our buyers an experience better than

the real one.

“A series of VBSMs are organised over the next

few months, which would help our buyers across

the world to source gems and jewellery from the

comfort of their homes or offices.”

The diamond VBSM is intended to be the first of

many, with future digital trading events focused

on other categories within the jewellery market,

such as gold, colour gemstones, and platinum.

Jail likely for gold

buyers linked to 2017

store robberies

Judge Scott Johns has indicated Alejandro Mendieta

Blanco (left) will face a custodial sentence for

handling stolen jewellery and watches.

A Melbourne judge has indicated a custodial

sentence is likely for three gold dealers who have

pleaded guilty to receiving stolen goods, which

were taken from jewellery stores during a spate

of armed robberies three years ago.

Alejandro Mendieta Blanco, 34, his brother Julio

Mendieta Blanco, 37, and their associate Chey

Tenenboim, 39, were initially charged with more than

400 offences each following a raid on their business,

Gold Buyers Melbourne, in October 2017.

Police reportedly collected more than 1,900 hours

of surveillance footage, while undercover officers

were able to sell gold jewellery and watches

to Gold Buyers Melbourne for “off the books”

payments without showing identification, as is

required by law.

Earlier this year, all three pleaded guilty to single

charges of receiving stolen goods as part of a

deal with prosecutors and paid back $165,000.

The Mendieta Blanco brothers are currently free on

bail, while Tenenboim’s bail was revoked in mid-July.

At a hearing at the County Court on 31 July, Judge

Scott Johns described the actions of the three men

as “very dishonest, it’s brazen, it’s audacious. There

is no moral compass being applied.”

He added that they were “acting as a customer

for the thief” by running a “particularly lucrative

business”; The Age and The Sydney Morning

Herald report that Gold Buyers Melbourne turned

over $66 million in the 2015-16 financial year.

Judge Johns dismissed a suggestion for a

community correction order for Alejandro

Mendieta Blanco and told his legal representative,

Justin Hannebery QC, that his client should

prepare to serve a prison term.

Prosecutors are seeking a harsher sentence

for Tenenboim as the scale of offending was

larger. Last month David Grace QC, acting for

Tenenboim, requested a community correction

order or a prison term short enough to allow

him to return home for his son’s bar mitzvah

in November. However, Judge Johns said that

Tenenboim was unlikely to be freed before then.

All three men will be sentenced this month.

August 2020 | 21


LUXURY pearl AND opal JEWELLERY

LUXURY pearl AND opal JEWELLERY

LUXURY pearl AND opal JEWELLERY

David Allen returns to lead Pandora Australia

CONTINUED FROM PAGE 18

been compounded by its shift toward company-owned ‘Concept’ stores

while simultaneously alienating retail stockists.

A recent analysis by Jeweller revealed that the number of Pandora

points of sale in Australia has declined by more than 60 per cent

since 2010.

Addressing Pandora’s strategy in Australia, Allen said, “I cannot

comment on the more recent decisions that have been made in the

Australian market regarding network distribution. I do know that

the organisation values the contributions that all of our distribution

channels make to our brand.

“I also know that the shape and structure of this distribution varies

across our Pandora markets globally, and this differentiation can be

based on particular local market conditions and on how established the

brand is,” he added.

“I’m grateful to have David take on a new responsibility

and that we can continue to pull on his strength and

business know-how”

– Alexander Lacik, Pandora Jewelry

e are in a situation we never thought we

ould be in. COVID-19 has turned our lives

ide down but there’s always a silver lining

We We are are in in a a situation we never thought we we

would would be be in. in. COVID-19 has turned our our lives lives

upside We upside are down in down a situation but

but there’s we always never a thought silver

a silver

lining we lining

to would to this

this be crisis.

crisis. in. COVID-19 The industry

The industry has and

and turned our community

our our community lives

another. coming together We are to connected encourage and in support isolation. one

coming pside down together but there’s to encourage always a and silver support lining

another. We are connected in isolation. one

o this

another.

crisis. The

We

industry

are connected

and our

in

community

isolation.

oming We will together see each to other encourage after this and all support has passed. one

another. We are connected in isolation.

e will see each other after this all has passed.

his crisis. The industry and our community

ing together to encourage and support one

will see each other after this all has passed.

Stay Stay strong and safe!

e will see each other after this all has passed.

Stay strong and safe!

www.ikecho.com.au | enquiries@ikecho.com.au

Tel: (02) 9266 0636 | Fax: (02) 9266 0969

www.ikecho.com.au | enquiries@ikecho.com.au

Stay strong and safe!

Tel: www.ikecho.com.au (02) 9266 0636 | | enquiries@ikecho.com.au

Fax: (02) 9266 0969

Tel: (02) 9266 0636 | Fax: (02) 9266 0969

www.ikecho.com.au | enquiries@ikecho.com.au

When questioned over Pandora Australia’s treatment of retail

stockists, including being forced to take unsuitable pack sizes, Allen

was diplomatic: “Clearly the topic of inventory quality and quantity is

critically important to us as well as our partners. That is understood

and is of course something that the team and I are very focused on.

“The distribution and the performance of our product is critical to

strengthening the connection that our consumers have with our

brand, and we will continue to work on investing in and enhancing

our inventory lifecycle and management processes both locally and

internationally,” he added.

In his new role as general manager of the Pacific division, Allen

will report to Pandora Jewelry’s new chief commercial officer,

Martino Pessina.

Alexander Lacik, CEO Pandora Jewelry, said, “I’m grateful to have

David take on a new responsibility and that we can continue to pull

on his strength and business know-how.“With David’s long standing

experience with headquarter decisions and operations, the move

is yet another step in us shortening the distance between headquarters

and markets.”

The restructuring program is estimated to cost DKK1.3 billion

($AU288.3 million) and is designed to “reduce organisational

complexity” and “ensure that feedback from consumers can more

quickly fuel new concept creations”, according to Lacik.


10 Years Ago

Time Machine: August 2010

A snapshot of the industry events making headlines this time 10 years ago in Jeweller.

Historic Headlines

4 Jewellers expand WA retail presence

4 Fake gemmologist to pay for crimes

4 Sydney set for biggest fair

4 All eyes watching Pandora launch

4 Online scammers target jewellers

Aussie websites openly

selling counterfeits

Jeweller has found Australian websites openly

selilng counterfeit watches and jewellery from

well-known brands, including Tag Heuer, Omega,

Breitling, and Rolex under the guide of ‘replicas’.

When contacted by Jeweller, the director of one

such website, SwissReplicaWatches.com.au,

claimed his actions did not breach any Australian

or international laws and described his business

as necessary due to consumer demand.

However, intellectual property expert Lisa

Egan, a senior associate at law firm Middleton,

confirmed that the term ‘replica’ was incorrect

– copies carrying a brand’s logo are classified as

‘counterfdeit’ goods. Egan said the only way the

site could remain online was if none of the affected

brands had taken action.

Egan said brands could protect their intellectual

property by sending a letter to the website operator

and contacting Google to have the site excluded

from search results.

All eyes watching

Pandora launch

The much-anticipated Pandora watch collection

is on track to launch in Australia in early

September 2010. It will initially be introduced

to consumers in 30 Pandora concept stores and

more than 110 Pandora shop-in-shop retailers.

The collection consists of men’s and women’s

models and features 10 styles with four to five

options available in each style. Prices start at

$295, ranging up to $2,495. One of the selling

points is that the range is Swiss-made and the

watches feature Rhonda movements, sapphire

glass, and a diamond on every winder.

August 2010

ON THE COVER Maxum

Editors’ Desk

4Pay Up: “Some years ago a salesman

offered me the following advice: if you

think education is expensive, you should

try ignorance! [However] there are

many forms of learning, and often the

most valuable are the least costly.

Business education and the ability to

recognise opportunities are perhaps the

most important; staying one step ahead

of your competitors is imperative.”

Soapbox

4Turning Over A New Leaf: “We are

living in a world where design is

highly appreciated, and luxury goods

are attainable for a great number

of consumers.

Why is it then that jewellery designers,

a group who should be at the forefront

of fashion, are content to churn out

the same designs year after year?

To enable the jewellery industry to

flourish, we need more unique design

that comes direct from the heart.”

– Victoria Buckley, owner, Victoria

Buckley Jewellery

STILL RELEVANT 10 YEARS ON

Shining Silver:

With a brilliant polish, flexible

workability and low price, silver’s unique

allure continues to work its magic

in the jewellery world... Propping up

silver’s profile is the wave of economic

uncertainty that is washing over

luxury consumers, dissuading them

from paying huge premiums for gold

Facebook ‘nipplegate’

A Sydney jeweller found herself at the centre

of a global media frenzy last month after

launching a battle against Facebook.

High-end jeweller Victoria Buckley lashed out

as ‘Midwest American puritanism’ on Facebook

after the social networking site threatened

action against her for having pictures of nude

porcelain dolls posing with her jewellery

products on her fan page.

After a week of global media coverage,

Facebook eventually apologised for censoring

the images and said Buckley could re-upload

them, which she did.

Global tribute to ‘Mr Swatch’

Politicians, business people and celebrities

were among the thousand people who flocked

to Switzerland for a public ceremony to pay

tribute to Swiss watch legend Nicolas Hayek,

who died unexpectedly on Monday 28 June.

Hayek, who was still Swatch chairman when he

died aged 82, founded the company in the early

1980s and is widely credited with breathing life

into the declining Swiss watchmaking industry..

His death sent shockwaves through the

Swiss business community, even prompting

the country’s president, Doris Leuthard, to

release a statement. “With his commitment

and courageous actions, Nicolas Hayek for

decades gave big and important boosts to

entrepreneurship,” Leuthard said. “We owe Mr

Hayek a lot.”

READ ALL HEADLINES IN FULL ON

JEWELLERMAGAZINE.COM

24 | August 2020


Peter W Beck has been passionately committed to the

jewellery industry for 45 years.

Please be assured that we are still here and we will continue to provide

you with the world class products and services that you rely on.

We stand beside you through this tough time and beyond.

OUR TEAM IS HERE TO SUPPORT YOU:

Toll Free 1800 888 585 | Email customerservice@pwbeck.com.au

14 Duncan Court, Ottoway Park, SA, 5013 Australia

Toll Free 1800 888 585 | Email customerservice@pwbeck.com.au | Web www.pwbeck.com.au


INSIDE

My Store

The Collective

DUBLIN, IRELAND with Emma Counihan, lead interior designer and assistant to the director • SPACE COMPLETED October 2019

4Who is the target market?

We are proud to reveal that clients from every walk

of life come through our doors and so for us, it

was pivotal that our store was a safe place where

everyone felt welcome.

Nestled in the heart of Dublin’s renowned Creative

Quarter, The Collective is a two-storey treasure

trove, featuring stunning designs from more than 30

independent jewellery designers, the overwhelming

majority of which call Ireland home.

Our goal has always been to support the craft

and embrace the incredible unique style of each

of our artists by creating the perfect backdrop to

showcases their designs.

Drury Street, and the building itself, is steeped in

history and charm and our intention was to create

“Each of the 100-year-old

alcoves that make up the

space have been lovingly

tailored with bespoke polished

brass and glass shelving,

illuminated to illustrate

a glittering display for

each jewellery designer’s

collection.”

–Emma Counihan

the perfect storm. For us, that meant a marrying of

the past and the future.

As an homage to the building’s past, we uncovered

the natural beauty of the space, showcasing

the exposed brick, embracing the quirky layout

and exhibiting original features such as the two

charming chimney breasts.

Simultaneously, as a toast to the future, we added

in unexpected surprises, like the crittal-style sliding

door and accompanying half-window. The blackframed,

New York-style door leads to our stateof-the-art

studio which hosts our silversmithing

workshops and jewellery courses all year round.

Which features encourage sales?

Often our new clients visit us after a

recommendation from a friend or because

26 | August 2020


something in our window has caught their eye. From

the outset, our priority was for our clients to have an

experience when they visit us and so every element

has been carefully thought out, in order to provide

them with the best possible service.

As our clients step through The Collective doors onto

the restored wooden planked floors, they are greeted

by the scent of ‘Dublin Dusk’ a woody, fresh yet

relaxing fragrance burning in the periphery.

As Dublin is home to Rathbornes, the world’s

oldest candle company, it felt fitting as a nod to the

city’s history.

Each of the 100-year-old alcoves that make up the

space have been lovingly tailored with bespoke

polished brass and glass shelving, illuminated to

illustrate a glittering display for each jewellery

designer’s collection.

Drawing the eye up, the ceiling comprises glass birds

floating from hanging plants, giving a magical and

whimsical feel against the dark, moody backdrop

above. An old restored railway sleeper rests above

one of the chimney breasts, framing a collection of

large, circular golden plinths, inviting your eyes for

a feast of the newest collections.

The counter – the backbone of the store – waits for

you at the end of your journey while also acting as

a gateway to the workshop beyond. The crittal-style

windows behind offer a peak into where the magic

happens!

4What is the store design’s ‘wow factor’?

I think the store’s wow factor is the combination and

flow of all of the separate entities. No one aspect

demands your attention – it is rather like a collection

of little surprises that draw you in!

August 2020 | 27


Ready

Get

Polish your gemstone

knowledge online

From lapis lazuli and coloured diamonds to

synthetic moissanite and zebra rock, brush up

on your gemstone knowledge in the downtime.

The GAA has over 14 years of gemmology

articles freely available to read online

on Jewellermagazine.com.

Learn About Gemstones with

the GAA on Jewellermagazine.com

ADELAIDE BRISBANE HOBART MELBOURNE PERTH SYDNEY

Passionately educating the industry, gem enthusiasts

and consumers about gemstones

learn@gem.org.au | 1300 436 338 | www.gem.org.au


REVIEW

Gems

CANDLELIGHT

MIXED LIGHT

DAYLIGHT

L to R: Omi Privé alexandrite rings; Rubius loose Alexandrite; Alexandrites under different light

The exotics: colour change gemstones

Magicians have used the illusionary power of

light for centuries, but consider a gemstone

that could harness this power to create a

different kind of magic show.

Introducing colour change gemstones: the

perfect illusionists to take centre stage

upon any wrist, finger or neck.

Colour change gemstones are

commanding a growing audience, and

the price of admission ranges from the

surprisingly affordable to the seriously

stratospheric.

These rarities are chameleons of the

gemstone world, coveted for their ability to

change colours in different light.

The human eye perceives light in the visible

spectrum, comprised of red, orange,

yellow, green, blue and violet wavelengths.

Colour change gemstones have two

transmission windows in the visible

spectrum of roughly equal size, and the

nature of the illumination dictates the

perceived colour.

For example, alexandrite is coloured by

the trace element chromium that produces

transmission windows in red and blue

wavelengths.

As candlelight is rich in red wavelengths

and daylight is rich in green/blue

wavelengths, alexandrite looks red when

viewed in candle light and green when

viewed in daylight.

This effect is applied to any gemstone with

an ability to transmit two (or more) different

ranges of wavelengths and is known as

“the alexandrite effect”.

The value of these extraordinary gemstones

is primarily based on the strength of the

colour change (weak, moderate or strong),

followed by the actual colours of the stone.

Factors such as size, cut and clarity are

less important due to the rarity of the

colour change phenomenon.

Locations like Madagascar, Sri Lanka,

Burma, east Africa, Russia and Turkey

are rich sources of these gemstones.

Top billing in any colour change

performance is alexandrite, a rare variety

of chrysoberyl originally found in the Ural

Mountains and named after Czar Alexander

II of Russia.

The finest specimens display a vivid

bluish-green in daylight and a purplishred

in incandescent light. Fine quality

Russian alexandrites larger than one carat

command a premium.

For an exotic twist on a conventional stone,

there is colour change sapphire, a variety

Alexandrite

Named for Czar

Alexander II of Russia

Colour: Deep green

when viewed in

daylight, purplish-red

in candle light

Found in: Russia, Sri

Lanka, Zimbabwe,

Burma, Tanzania,

Madagascar, India

and Brazil

Mohs Hardness: 8.5

Class: Chrysoberyl

Lustre: Vitreous

Formula: BeAl 2

O 4

of corundum. The most popular type

changes from blue or violet in daylight to

violetish purple or strong reddish purple in

incandescent light.

Another very rare variety changes from

green to reddish-brown.

A well-kept secret is Australian colour

change sapphires from the central

Queensland gemstone fields that display

some unusual colour changes – brown to

green, yellow to pink, or golden orange to

orangey-green.

Another twist on a favourite is colour

change garnet, either pyrope type or a

mixture of pyrope and spessartite varieties.

These gemstones change from a deep

green or blue-green in daylight to red or

purple in incandescent light.

Rivalling alexandrite and sapphire for

hardness and durability is colour change

spinel. This chameleon can change from

blue to purple or from light bluish-violet

to light pink, resembling colour change

sapphire without the hefty price tag.

The captivating magic of colour change

gemstones will far outlive any show, and

as prices of conventional gemstones in fine

qualities are rising, these exotics present

alternatives for those who demand unique,

collectible gemstones.

August 2020 | 29


STRATEGY FEATURE

Retail Rent Review

SEEING

EYE to EYE

RETAIL RENT REVIEW

The COVID-19 pandemic has caused the bubbling tension between

retailers and landlords to boil over – but the crisis has cleared the way

for a new paradigm, writes ARABELLA RODEN.


BY THE NUMBERS

Retail Reality

Leasing premises is one of the highest

fixed costs associated with traditional

retail, alongside staff. Yet unlike staff

contracts, lease agreements are largely inflexible

– often with fixed minimum terms of five years

– and can increase beyond inflation for years

at a time regardless of trading conditions,

demanding tenants sacrifice margin or

constantly increase sales.

During good economic times, these fixed terms were

somewhat tolerable for businesses. However, the retail

environment has become increasingly challenging in

recent years; changing consumer habits, shrinking

margins, and increased competition have all served to

erode profitability.

Simon Fonteyn, managing director of retail leasing data

firm LeaseInfo Group, says, “Over the past five years, there

has been an increasing amount of capital required for

retailers to do business. In terms of leasing structures,

rents have generally been outstripping sales. Typically,

rents have escalated between 4–5 per cent per annum,

whereas retail sales have increased by, on average, 2 per

cent per year.”

Fonteyn says there was already a “shake-out” occurring

in the sector prior to the COVID-19 pandemic, pointing to

the high-profile collapse of several fashion and footwear

retailers – such as Bardot, Ed Harry, and Ziera – in 2019.

The arrival of the virus in January 2020 “accelerated

and amplified cracks that were already visible” in the

retail sector, according to the KPMG white paper Beyond

COVID-19: The Shifting Foundations in Retail Property,

which was published in June 2020.

“Retail precinct footfall had been in decline for years as

e-commerce penetration grew – recording 8.1 percent in

cumulative footfall losses over the three years to 2020.

Retailer profit margins and retail landlord yields were

being squeezed since 2017 and consumer confidence had

been in decline for most of 2019,” the paper’s authors note.

By mid-year, the Australian economy was in recession for

the first time in nearly three decades, and the effective

unemployment rate had reached 13 per cent, according to

Federal Treasurer Josh Frydenberg.

Consumer spending see-sawed, with the Australian

-8.1%

overal retail precinct

footfall decline,

2017–2020

KPMG, Beyond COVID-19:

The Shifting Foundations of

Retail Property

4–5%

average yearly

increase in retail

rental cost

Simon Fonteyn

analysis

1,338

shopping centres

in Australia

The Retail

Doctor Group

5.1%

vacancy rate in

shopping centres,

June 2020 – a

20-year peak

JLL Australia

12%

proportion of

Australian retail

sales that took

place online in

March 2020

Australia Post, 2020

eCommerce Industry Report

Bureau of Statistics (ABS) recording the most precipitous

fall and meteoric rise in retail trade figures consecutively

in April and May. At the same time, foot traffic at shopping

centres and retail precincts collapsed by up to 80 per cent,

leaving businesses out in the cold.

In the midst of the unforeseen and turbulent conditions

precipitated by the virus, Paul Zahra, CEO of the Australian

Retailers Association, notes that some landlords have

been unwilling to accept this new reality.

“The challenges endured by retailers over the course of

the pandemic have put a spotlight on the high cost of

rents,” he explains.

“Unsustainable annual increases to rent have been

a persistent problem for some time now, with rents

far outpacing revenue growth amid a changing retail

environment. We expect many stores will require ongoing

rent relief to help them recover – and when retailers win,

landlords win.

“Unsustainable annual increases to rent have

been a persistent problem for some time now,

with rents far outpacing revenue growth amid

a changing retail environment.”

Paul Zahra, Australian Retailers Association

“Landlords need to remember that we are in a recession.

It’s a false economy for landlords to try to extract rent from

retailers that need cash reserves to survive,” he adds.

Peter Ryan, director of retail strategy firm Red

Communication, predicts that retailers will be in ‘survival

mode’ for at least the next two years as a result of the

pandemic. “Foot traffic is down, there has been a ‘forced’

shift to online retail, and sales and margin are under

enormous pressure,” he says.

“As household disposable incomes succumb to economic

pressure, stores will be subjected to intense pressure –

some of it appropriate, a lot of it unwarranted. Lease costs

and inclusions must be reduced or they run the risk of

becoming uneconomic.

“No retailer will be able to support high rents any longer

and therefore renegotiating terms is a critical success

factor both in terms of survival and growth,” Ryan says.

August 2020 | 31


RE A L ESTATE GI A NTS

Australia’s

Largest

Retail Property

Groups by Gross

Lettable Area

It’s a conclusion supported by the KPMG paper, which

notes, “Even if COVID-19 is quickly resolved, retailers

and landlords will need to ‘lean in’ to create a new and

more sustainable retail business model, which in turn will

require adaptations to the property model.”

Given the impact of the pandemic, the questions to

be answered remain: what will the retailer-landlord

relationship look like, post-COVID, and how can retailers

shift the balance toward more favourable terms?

Examining the retail landscape

According to analysis by the Retail Doctor Group’s Brian

Walker, Australia has 1,338 shopping centres, which

comprise 85 per cent of stores and attract 85 per cent of

overall shopping visitation.

These shopping centres are, in the main, owned and

operated by real estate companies including Scentre

Group, Vicinity Centres, and Stockland, many of which are

publicly traded.

ASX: SCG

37 shopping centres in

Australia and 5 in NZ

Approximately

3.8 million sqm

lettable retail space

ASX: VCX

64 shopping centres

Approximately

2.5 million sqm

lettable retail space

officer of large chain The Jewellery Group (TJG), which

operates 67 stores under the Mazzuchelli’s and Zamels

brands. Notably, TJG’s store count has decreased dramatically

since 2010, when it operated more than 120 stores.

When asked about the challenges of negotiating leasing

agreements, he said, “Landlords were unilaterally

considering only their property valuation and returns, with

less scope to look at the retailer’s commercial viability of

operating the store.”

He added, “There was lots of pushback in negotiating the

multiple stores as one portfolio, as they were stating that

each store has different cost dynamics and the owners’

expectations were different.”

When negotiating the terms of a lease, the retailer has

historically been at a disadvantage, with Ryan noting that

retailers have often had to supply trading information

to landlords “only for them to turn around and use that

information to negotiate onerous terms based on a

percent-of-sales formula”.

85%

OF RETAIL VISITATION TAKES

PLACE IN SHOPPING CENTRES

Ideally, the relationship between retailer and landlord

is one of mutual benefit; while the latter collects rental

income, the former is meant to enjoy increased and highquality

footfall as well as reduced occupancy cost.

Yet it is not always so. Frank Salera, director Salera’s –

a jewellery chain which has been dealing with landlords

since 1953 and operates 20 stores across Victoria

and Queensland – observes, “The key challenge is

that landlords seek to maximise the returns to their

shareholders, who expect year-upon-year increases –

and this objective is irrespective of the challenges of

increasing retail performance, which is often declining.

“This results in a situation where now, more than ever,

retailers are required to ‘throw the keys on the table’ [threaten

to vacate] before the landlords will consider a rent that affords

the retailer a minimum return on investment.”

It’s a perspective shared by Balaji Sambasivam, chief financial

ASX: SGP

35 shopping centres

Approximately

1.02 million sqm

lettable retail space

QIC Global Real Estate

Government-owned

13 shopping centres

ASX: GPT

12 shopping centres

Approximately

960,800 sqm

lettable retail space

“The key challenge is that landlords seek to

maximise the returns to their shareholders,

who expect year-upon-year increases –

and this objective is irrespective of the

challenges of increasing retail performance,

which is often declining.”

Frank Salera, Salera’s

Zahra also describes another “information imbalance”:

“Smaller retailers, in particular, don’t fully know their rights

and what they can ask for. Landlords are in the business of

collecting rent, whereas for retailers, rent is just one of many

parts of the business they need to manage.”

Additionally, many Australian states and territories have

required a minimum five-year term for commercial leases.

While providing stability for retailers and security for

landlords, these terms have made it more challenging for

retailers to respond to downturns.

As a result, several states have taken steps to amend the

legislation governing commercial leases.

“In NSW, which accounts for about a third of all Australian

retail, there used to be a requirement of minimum five-

32 | August 2020


Retail Rent Review | STRATEGY FEATURE

NO RESOLUTION OUTCOME

ALTERNATIVE FUTURE: THE RETAIL LANDSCAPE

If current trends continue unabated, without

a flexible and reasonable response from

landlords, the retail landscape in Australia

could look dramatically different in the

coming years.

Overall, retail footfall has been in decline

since at least 2017 and at an accelerating

rate – which will likely continue as

e-commerce penetration increases.

Yet over the same period, rents have

increased, on average, by 4–5 per cent

per year, according to LeaseInfo Group

managing director Simon Fonteyn.

Tellingly, the vacancy rate across Australian

shopping centres reached its highest rate in

more than 20 years – 5.1 per cent – in June

2020, according to data from commercial

real estate firm JLL Australia.

For CBD-based shopping centres, the

vacancy rate is at more than 10 per cent.

Shopping precincts and strips have fared

even worse; an analysis by real estate

advisory firm Plan1 Project Management

found that Melbourne’s Chapel Street had

a vacancy rate exceeding 20 per cent

in June 2020.

Across the city’s 11 major retail strips, the

vacancy rate was 12.3 per cent, an increase

of more than 4 per cent when compared

with 2018.

Speaking at the Australian Financial

Review’s Virtual Retail Summit earlier this

year, Julia Forrest, a portfolio manager at

investment firm Pendal Group, speculated

that vacancy rates would likely increase

further, and that more retailers would opt

for holdovers – month-to-month contracts –

rather than long-term leases.

Peter Ryan, director of retail consultancy

RED Communication, says “The economic

reality is that we face an extended period

of poor market conditions with some

economists suggesting the impacts could

last a decade or more and that we have not

seen the worst of it yet.”

“The economic reality is that we

face an extended period of poor

market conditions with some

economists suggesting the impacts

could last a decade or more and

that we have not seen the worst

of it yet.”

Peter Ryan, RED Communication

However, Ryan believes “online is only part

of the solution” and that stores will “regain

their position as the centre of the customer

relationship – [but] when that happens

though is the critical question.”

Without a sustainable reduction in rent,

Ryan says retailers will face increasing

pressure to exit tenancies.

Meanwhile, Fonteyn argues that shopping

centres will not disappear from the

Australian landscape – but that they will be

“forced to change”: “Their model is getting

shoppers in, getting them to spend, and

getting them to stay as long as possible.

“After

COVID-19,

that has to be readjusted.

There will

be another iteration of

different types of use within

shopping centres.”

He adds that shopping centre

owners are constrained by strict

planning laws. “It’s not that easy to

introduce new shopping centres.

“There have been a couple of new centres

built [in the past 10 years], but the majority

have been there for decades and have

simply expanded their trading area.”

However, the shift toward mixed-use,

including residential, offices, services, and

lifestyle, may be hampered as consumers

increasingly opt to avoid crowded spaces

due to safety concerns.

Additionally, the KPMG white paper Beyond

COVID-19: The Shifting Foundation of Retail

Property notes that ‘destination shopping’

at large-scale centres is in decline, with

consumers increasingly preferring to spend

locally in what is referred to as ‘village

shopping’.

At the same time, replacing tenants has

become “increasingly difficult”, with

landlords “having to work much harder to

attract new tenants and repurpose their

centres to make them relevant to their

communities.”

In order to justify rental costs, the report’s

authors suggest that landlords provide

“supporting infrastructure” for retailers

who are moving toward omni-channel

sales, such as “kerb-side pick-up zones,

dark stores/floors, shared click and collect

counters, or parcel lockers”.

If these changes do not occur, the value

of shopping centre assets will continue to

decline – as will the Australian retail sector.

August 2020 | 33


1

0%

0% Investments by retailers and landlords in

Australian retail footfall had been in decline for years - 1%

1

before COVID-19

the shopping Investments experience Australian by retailers had been and consumer landlords in confidence

- 1% working to the reduce shopping the experience rate of footfall had been decline

12 month rolling average YoY growth rate

- 2%

Index (>100 = positive outlook)

1

STRATEGY FEATURE | Retail Rent Review

working to reduce the rate of footfall decline

Jan 2017 – Mar 2020

- 2%

Jan 2017 – Apr 2020

- 3%

1

- 3%

- 4%

150

1

0%

- 4%

Australian retail

Investments by retailers and landlords in

- 1%

- 5%

140

1

footfall had been

the shopping experience had been

- 5%

working to reduce the rate of footfall decline

in decline for years

- 6%

- 2%

- 6%

130

before COVID-19

- 7%

- 3%

- 7%

120

12 month rolling average

2017 2017 2018 2018 2019 2019 2020 2020

YoY growth rates from - 4%

110

January 2017 – March 2020

2017 2017 2018 2018 Positive 2019outlook

2020 2020

- 5%

-3.9% -3.9% -6.7% 100-6.7% -8.1% -8.1% -11.7% -11.7%

Source: KPMG report,

Negative outlook

using ShopperTrak data,

- 6%

90

Jan 2017-March 2020

. .

- 7%

80

Consumer confiden

2017 2018 2019

2020

Cumulative Cumulative % growth % in growth footfall in footfall since 2016 since 2016

70

deteriorating prior t

2017 2018 2019 2020

Notes: (1) Based on ShopperTrak 60 data, ShopperTrak uses in-store foot traffic counters to collate foot traffic data;

-3.9% -6.7% -8.1% -11.7%

Notes: (1) Based on ShopperTrak data, ShopperTrak uses in-store foot traffic counters to collate foot traffic data; (2) G

Sources: Livewire Markets, Chart of the day: foot traffic for Australian retailers; AFR, Weak retail spending an un

Sources: Livewire Markets, Chart of the day: foot traffic for Australian retailers; AFR, Weak retail spending an uninten

year terms, but that has now changed [with in penalties for parties “not providing

2019; ANZ - Roy Morgan Australian consumer confidence; KPMG analysis (2020)

2019; the ANZ right - Roy Morgan different Australian types consumer of confidence; shoppers KPMG throughout analysis (2020) the day.”

10

legislation passed in 2017],” Fonteyn explains. information or doing the right thing, or seeking

. It’s a trend Salera has also observed: “With

information they are not required to,” according

In South Australia, amendments to the Retail

or without COVID,

Cumulative % growth in footfall since 2016

2017

the centres have spent

2018

the

to Chapman. These penalties had not been

2019

And Commercial Leases Act came into force

last few years in considering how to maintain

updated since 1995.

in June and have streamlined the process for

centres as a hub of consumer activity. In the

acquiring a certified exclusionary Notes: clause (1) Based to on ShopperTrak In the data, past ShopperTrak five years, uses Fonteyn in-store notes foot traffic that counters shopping to collate foot past, traffic specialty data; (2) Growth retailers rate from and previous department to current year’s stores 12-month average (e.g. Jul 16

shorten a lease term.

Sources: Livewire Markets,

centre

Chart of

landlords

the day: foot

have

traffic

also

for Australian

made

retailers;

significant

AFR,

efforts

Weak retail spending formed an unintended the basis consequence of attracting of the shoppers banking royal to commission; Savills Research Qua

2019; ANZ - Roy Morgan Australian consumer confidence; KPMG analysis (2020)

The changes also provide added protection and

to improve footfall, namely by shifting the retail mix centres, which then created a demand for food

reduce confusion for small and medium retail toward services and lifestyle.

and lifestyle – such as cinemas.

tenants. John Chapman, South Australian Small

“The apparent trend is that now landlord owners

Business Commissioner, explains that the

are focusing on food and lifestyle as the primary

amendments resulted from a lengthy period of

attraction for consumers, who will then frequent

consultation and an independent judicial review.

the specialty stores.”

“Some of the changes that have flowed through

include that landlords will be required to provide

prospective tenants with a disclosure statement

and a draft lease as soon as negotiations

commence,” Chapman says.

“What that is aiming to do is make sure people

have as much information up front so they can

go away and think about it early. That provides

transparency around the stages of negotiation.”

Additionally, the South Australian Small

Business Commission has produced a Retail

Commercial Leasing Guide, which is now

required to be provided to prospective tenants.

“This document is very much aimed at helping

tenants understand their obligations and what

a lease may contain, with frequently-askedquestions

and indeed tips on what to look out

for,” Chapman says.

Other changes include a “significant increase”

“Shopping centres have tried, generally,

to change the mix to ‘experiential’

retailing – lifestyle precincts, casual

dining precincts, gyms – and away

from more traditional retail...

Unfortunately that has backfired

during COVID-19 because experiential

retail has been hardest hit.”

Brian Fonteyn, LeaseInfo Group

“Shopping centres have tried, generally, to

change the mix to ‘experiential’ retailing –

lifestyle precincts, casual dining precincts,

gyms – and away from more traditional retail

like apparel and footwear. Unfortunately that has

backfired during COVID-19 because experiential

retail has been hardest hit,” he explains.

“Centres have also become more ‘all hours’ –

opening early and closing late – and they appeal to

As Fonteyn notes, the viability of the lifestyledriven

strategy has been significantly hampered

by COVID-19, at least in the short-term. Whether

footfall will recover to previous levels remains

to be seen, given that COVID-19 has also

accelerated another major retail trend of the

past five years: e-commerce.

Facing the headwinds

COVID-19 dealt a devastating blow to the

Australian economy, plunging it into recession

and increasing the official unemployment rate to

7.5 per cent, its highest level in 22 years.

At the same time, shopping centre footfall

declined by more than 80 per cent in 2020, when

compared with 2019, during the nationwide

lockdown. It remains about 20 per cent lower

in states that have emerged from restrictions,

according to data from ShopperTrak.

“The higher the footfall, the more time consumers

7.5%

AUSTRALIAN

UNEMPLOYMENT

RATE, JUL ‘20

82.5%

INCREASE IN

E-COMMERCE

SALES FOR ALL

RETAILERS, APR ‘20

80%

DECLINE IN

SHOPPING CENTRE

FOOTFALL, Q1 2020

34 | August 2020


Retail Rent Review | STRATEGY FEATURE

dwell and the more confident consumers are in

their financial wellbeing, the more money they

spend with retailers, who can then pay rent to

landlords and make a profit.

“The COVID-19 physical distancing measures

and the resulting recession work against all

three of these value drivers – footfall, dwell times

and consumer confidence,” notes the KPMG

white paper.

For practical reasons, consumers increasingly

turned to e-commerce while under lockdown and

have adapted to its convenience. The Australian

Financial Review reported that in August 2020,

e-commerce sales increased 56 per cent for

omni-channel retailers when compared with

April 2019. For online-only retailers, the figure

was 109 per cent.

The shift – however temporary – away from bricksand-mortar

shopping has placed significant pressure

on retailers and landlords alike.

Vicinity Centres – which operates 60 shopping

centres across Australia, including Melbourne’s

Chadstone and Chatswood Chase in Sydney

– was recently forced to launch a $1.4 billion

capital raising to mitigate the decline in rental

income, while its overall real estate portfolio

declined in value by $1.8 billion for the first half

of the year.

While retail sales fell a record 17.7 per cent in

April due to widespread lockdowns, the figure

rebounded 16.3 per cent in May as government

stimulus flowed through to consumers and

businesses, before stabilising in June.

TRENDS OVER TIME

CENTRE OF

CHANGE: RETAIL

EVOLUTION

Since 2015, several major trends have

been noted in shopping centres. These

have occurred as a result of changing

consumer behaviour as well as external

pressures on specific categories within

the retail sector.

Foot traffic has been driven by different

factors: The number of department

stores and discount department

stores in shopping centres has been

shrinking, but grocery stores – such

as Woolworths – and lifestyle

businesses, such as gyms, as well

as cinemas have been making up

some of that lost foot traffic.

Shopping centres have become

more ‘all hours’: Early opening and

late closing has increased in order to

appeal to different types of shoppers

throughout the day.

A move toward mixed-use

development: Shopping centre

landlords have shifted their model

to include a combination of retail,

residential, and offices. In the future,

this mixed-use model could also

include hotels.

Instability in the discretionary retail

sector leading to changing tenancy

mix: Retailers, particularly in fashion

and footwear, have been vulnerable due

to a combination of factors, in particular

increased competition from large

international entrants to the market, as

well as online-only fast retailers. This

has led to a ‘shake out’ of such tenants.

However, the spending was largely concentrated

in necessities such as groceries, hardware, and

homewares. Fonteyn said the jewellery category

had been “heavily impacted”, though urban

areas had again borne most of the brunt.

With bricks-and-mortar retailers across

discretionary categories in dire straits, the

necessity of rent reductions, waivers, and

deferrals became clear.

“Meeting rental obligations is a significant

concern for retailers, with many stores still

suffering diminished revenue, particularly

discretionary retailers and stores in CBD or

tourist-dependent locations,” Zahra says, adding

that retailers would also incur costs due to

COVID-19 safety requirements.

On 7 April, the National Cabinet released a

Commercial Tenancy Code of Conduct to guide

good-faith rent renegotiations between retailers

and landlords.

At the time, Peter Allen, CEO of Westfield owner

Scentre Group and chairman of the Shopping

Centre Council of Australia (SCCA), said, “We

all accept that retail leases are legal obligations

and enshrined in the laws of the states and

territories, yet we are also commercial people

and we understand there needs to be many

factors taken into consideration as we come to

an agreement on temporary arrangements.

“Our aim is, in a proportionate and measured

way, to share the financial risk and cash flow

impact during the COVID-19 [pandemic] with the

interests of all our stakeholders.”

17.7%

FALL IN RETAIL

SALES, APR ‘20

12.3%

16.3% 2%

VACANCY RATE

INCREASE IN RETAIL

SALES, MAY ‘20

OF MAJOR

MELBOURNE

RETAIL STRIPS

AVERAGE YEARLY

INCREASE IN TOTAL

RETAIL SALES

August 2020 | 35


STRATEGY FEATURE | Retail Rent Review

INSIGHTS

The Response

to COVID-19

When it comes to

assessing the impact

of COVID-19 on

shopping centres,

Simon Fonteyn,

managing director

of retail data firm

LeaseInfo Group,

argues that the

figures paint a

nuanced picture.

“[The impact is]

location-specific,

sector-specific,

geographically

specific – and within

shopping centres,

certain categories

are doing better than

others. Generally

speaking, the

smaller shopping

centres – what we

IMPACT ON SHOPPING CENTRES

PAIN AND GAIN

% change

by precinct

format

Sm all shopping

centres

Large format

stores 2

Medium

shopping c entres

Major

retail strips

Large shopping

centres

Me lbourne

CBD

Outlet

precincts

Reference periods

A vs. BA vs. C

27/01 –1 6/03 27/01 –2 7/04

-20%

-10%

-19%

-30%

39%

-47%

14%

-32%

-39%

-45%

-59%

-66%

-87%

-87%

Impact of COVID-19 on shopping centre

footfall by type. Source: KPMG/GapMaps.

term Neighbourhood centres – have been the least impacted

because customers are tending to spend and shop locally,

particularly for groceries. The most impacted have been

CBD shopping centres, for obvious reasons: the lack of office

workers and no international tourists,” he explains.

“In between those, in general the bigger the shopping centre,

the more impact has been felt, usually because of what their

mix entails. The exception to that rule would be shopping

centres in regional areas, which have not been impacted to

the extent of metro areas.” Fonteyn’s analysis is supported by

data from KPMG and GapMaps (see chart, above).

In terms of shopping strips or precincts, Fonteyn says the data

point to even more of a “mixed bag”.

“Some have been devastated by COVID-19. As an example, I

was recently at a strip mall in northwest Sydney which used to

be very busy, and the number of vacancies astounded me. Strip

malls have been affected because a lot of the businesses that

tend to go there are SMEs [small and medium enterprises] and

they have been hit really hard.”

“There are also high vacancy rates in Oxford Street in Sydney

and Chapel Street in Melbourne – the fashion districts – and

that gives you an idea that it’s really a mosaic.”

This information should be taken into account when predicting

how centres may recover in the medium- and long-term.

Paul Zahra

Australian Retailers

Association

“Many landlords are treating

the Code’s minimum

provisions for rent relief as

their maximum requirement,

and are unwilling to offer

rent abatement higher than

50 per cent of the total rent

relief. However, it is unfair to

be entirely critical, as we’ve

also received a lot of positive

feedback.”

Peter Allen

Scentre Group & Shopping

Centre Council of Australia

“We all accept that

retail leases are legal

obligations and enshrined

in the laws of the states and

territories, yet we are also

commercial people and we

understand there needs to

be many factors taken into

consideration as we come to

an agreement.”

John Chapman

South Australian Small

Business Commissioner

“The vast majority of the

[mediations have been]

successful with the parties

in agreement. We don’t

expect a lot to go to court.

What we are finding is that

a lot of people, once we go

to the other party, come to a

resolution. They go away and

start talking again, and that’s

a great outcome.”

Between March and May, SCCA members were able to complete

more than 6,400 revised rent agreements with small and

medium-sized retailers, representing approximately 45 per cent

of those who had requested relief.

As of 14 August, the SCCA’s assistance extended to retail tenants

totalled $1.6 billion.

Angus Nardi, executive director SCCA, said, “Our industry has

provided substantial rental assistance to both SME [small-andmedium

enterprise] and non-SME retailers... We have strived

to strike a balance between helping those who need it while

at the same time confronting our own financial pressures in

the face of ongoing disruptions to regular trading to protect

public health.”

He added that SCCA members would continue “working closely

and co-operatively” with SMEs, saying, “It is in our commerical

interests as well as the broader economy that SMEs have

longevity within our centres as they provide products and

services our customers want and support local jobs.”

“It is in our commercial interests as well as the broader

economy that SMEs have longevity within our centres

as they provide products and services our customers

want and support local jobs.”

Angus Nardi, Shopping Centre Council of Australia

Meanwhile, Grant Kelley, CEO Vicinity Centres, has drawn ire for

suggesting that lease agreements could include base rent plus

a variable component based on retailers’ e-commerce sales,

justified by bricks-and-mortar stores acting as ‘showroom and

fulfilment channel’.

Across the retail spectrum, the ARA’s Zahra reveals that

renegotiation results have been moderately successful: “We have

heard from retailers that the majority of landlords are sticking

strictly to the provisions specified by the National Cabinet’s Code

of Conduct, however some landlords are extending better offers

than the code requires which is welcome feedback.

“Disappointingly, we have heard that many landlords are doing

as little as possible under the law. Many landlords are treating

the Code’s minimum provisions for rent relief as their maximum

requirement, and are unwilling to offer rent abatement higher

than 50 per cent of the total rent relief,” he says.

“However, it is unfair to be entirely critical, as we’ve also

received a lot of positive feedback. One medium-sized landlord

36 | August 2020


Retail Rent Review | STRATEGY FEATURE

Top 3 retail categories offered

rental assistance

26%

21%

14%

CAFES, FOOD CATERING & TAKEAWAY

RETAIL SERVICES (I.E HAIRDRESSERS,

KEY-CUTTING & SHOE REPAIR)

CLOTHING, FOOTWEAR &

ACCESSORIES

AT THE TA BLE

Approaching

Negotiation

wrote to all tenants to advise them of a six-month holiday for

rental payments to affected tenants.”

The most potent and visible example of the conflict between

retailers and landlords has been the public campaign of Premier

Investments, Australia’s largest retail tenant and the owner of

brands such as Peter Alexander, Just Jeans and Smiggle.

Led by chairman Solomon Lew and CEO Mark McInnes,

Premier refused to pay rent during a six-week shutdown in

the first wave of the pandemic, and has since advocated for a

percentage-of-sales-only model.

Prominent chains, such as jeweller Michael Hill and fashion

retailer City Chic, chose to rationalise their store network and

close locations due to the intransigence of landlords.

In the jewellery category, Salera said his business was offered

the opportunity to renegotiate with landlords, but the terms

were “not acceptable”.

In contrast, Sambasivam said The Jewellery Group’s

landlords were “by and large more than willing to discuss the

opportunities to defer, renegotiate or waive rent”.

On the state level, support has been extended by various

governments to assist retailers. The Victorian Government

launched the Commercial Tenancy Relief Scheme in March,

which included a six-month moratorium on evictions for SME

tenants who had applied for rent relief and were participating

in the JobKeeper scheme.

Judy O’Connell, Victorian Small Business Commissioner, told

Jeweller, “We want to help tenants and landlords negotiate

the best possible rental outcomes, so they have one less

thing to worry about and can focus on coming out of this

pandemic in good shape. We’re confident the new reforms to

commercial tenancy laws will give tenants and their landlords

the much-needed support and security they need during

these incredibly tough times.”

By July, O’Connell’s office – the Victorian Small Business

Commission – had received 825 applications to resolve rent

disputes; of those that were finalised, 96 per cent resulted in

rent relief for the tenant.

Meanwhile, Chapman said the South Australian Small Business

Commission had seen a doubling of lease-related work in the three

months to June, including almost 80 disputes.

“The vast majority of the [mediations have been] successful with

the parties in agreement. We don’t expect a lot to go to court. What

we are finding is that a lot of people, once we go to the other party,

come to a resolution. They go away and start talking again, and

that’s a great outcome,” Chapman said.

Judy O’Connell

Victorian Small Business

Commissioner

“We want to help tenants and

landlords negotiate the best

possible rental outcomes, so

they have one less thing to

worry about and can focus on

coming out of this pandemic

in good shape. We’re

confident the new reforms

to commercial tenancy laws

will give tenants and their

landlords the much-needed

support and security they

need during these incredibly

tough times.”

Jane Cohen

KPMG

“I don’t necessarily think

retailers will be able to get

more out of the landlords,

but both will be able to

create more value if they

shift to a more collaborative

approach.”

Peter Ryan

RED Communication

“The problem about

renegotiating rent is one of

fairness to both parties. A

landlord must get a return on

investment or the asset will

become starved of capital

and operational expenditure

– and that includes

promotions which attract

customers.”

RENT READY

NEGOTIATION CHECKLIST

FOR RETAILERS

Assessment

Examine your business model and decide whether it is

viable

for the long-term: what is the existing occupancy

cost, and what is a sustainable rent going forward? How

expensive is the store fit-out and how long will it take to

amortise the cost?

Analyse market trends and uncertainty to determine

whether a short, flexible lease is preferable to a longer term

Analyse the performance of your store and the shopping

centre or precinct: is it in the best possible location in terms

of the centre’s retail mix, and delivery of quality foot traffic?

Would it be better suited to another area, or even moving to a

shopping strip?

Given the changes in consumer behaviour, how is the

shopping centre management planning to support retailers

and drive foot traffic over the next two to five years?

Education

Seek advice from your buying group or industry

organisation, such as the Australian Retailers Association:

inform yourself about the landlord’s obligations, what you are

entitled to as a tenant under legislation, and what you are not

required to provide – such as cash flow projections or financial

statements

Refer to the relevant retail tenancy legislation in your state

– several have been updated in recent years with increased

protections and flexibility for tenants

Check your relevant Small Business Commissioner’s

website for guidelines and frequently asked questions

regarding commercial tenancies

Negotiation

Bring an attitude of fairness and good faith to the

conversation, but recognise that the survival of your business

is paramount

Be honest with the landlord about what you can afford

The Australian Retailers Association recommends retailers

avoid signing a non-disclosure agreement, as this limits

their options for collective bargaining

If you are unable to come to an agreement, seek support

from your state or territory’s relevant Small Business

Commissioner, as many are equipped to provide mediation

services at low or no cost

August 2020 | 37


STRATEGY FEATURE | Retail Rent Review

KEY

TRENDS

FOR

RETAILERS

He added, “There will be those periods for

businesses who were shut down and a lot

of them have already come to agreements

with their landlords.

“There will be others that haven’t. There will

be those that open up and landlords saying,

‘Well, you’re open now, I want all my rent.’

That is not realistic in some cases and there

will be a lot subject to negotiation.”

Indeed, the need for negotiation and

managed expectations – on the part of

both retailers and landlords – is critical

in the post-COVID period.

Bridging the gap

For retailers, the COVID-19 pandemic

dramatically rebalanced the value

equation with landlords, most notably

by the decrease in footfall, the increase

in e-commerce trading, and the rising

number of store vacancies.

“Since the early 2000s at least, supply has

always exceeded demand for shopping

centre space. As a result of COVID-19, with

the number of retailers that have gone out of

business, you are seeing a situation where

demand exceeds supply,” Fonteyn explains.

“Retailers can’t afford now to hold any

space that is not making money. Large

groups may have one or two stores that

they are prepared to take a loss on, but

the majority will have to be profitable

or breakeven. The pandemic has simply

created a seismic shift in supply and

demand – and hence, rent.”

Indeed, at the Australian Financial

Review’s Virtual Retail Summit, held on

25 June, Ian Bailey, managing director

Kmart Group, confirmed that 10–20 year

leases and yearly increasing rents would

no longer be acceptable to large anchor

retailers, which are still responsible for

driving a substantial portion of foot traffic

to shopping centres.

“None of us are going to be signing

anything like that in the future because

what this period of time has told us is

things can happen where sales decline

completely outside of the control of the

retailer – and rents do not,” he said.

Jane Cohen, a partner at KPMG Australia

and co-author of the white paper, observes

that consumer behaviour has been drastically

changed by the virus and those trends are

likely to continue, placing more pressure on

both landlords and retailers to create a more

sustainable framework.

“There will be [consumers] who

jump straight back to the way

they were, but even if just a

small percentage move [their

shopping patterns], it makes such

a difference on these fixed-cost

businesses – both the landlords

and the retailers.”

Jane Cohen, KPMG

“There will be people who jump straight back

to the way they were, but even if just a small

percentage move, it makes such a difference

on these fixed-cost businesses – both the

landlords and the retailers,” she says.

It’s a conclusion supported by Fonteyn,

who says, “Post-COVID, it’s a whole new

world. People are preferring to work

from home, at least part of the time,

because they don’t have to bother with the

commute and it’s convenient for them.

”That means the consumer behaviour will

change; they might shop more locally, so

there will be less demand in the CBD.”

Salera notes, “Landlord’s expectations

of achievable rent will need to change. In

the short run, the only way that landlords

will accept the possibility that they will

generate less rent from sites is when they

get an increased level of vacancy.

Higher

vacancy

rates means

there is less

competition

for retail

space, both in

centres and

precincts

Economic

uncertainty

creates a good

environment

for negotiating

a new, better

deal as

landlords look

for repeat

income

Large

shopping

centres

are still

beholden to

shareholders,

putting

upward

pressure

on rents

The consumer

shift to

‘village

shopping’

makes smaller

centres more

appealing for

retailers

As

e-commerce

grows,

shopping

centres must

adapt to offer

infrastructure

for omnichannel

retailing

“This may well escalate in the years

immediately after the end of the COVID

financial support as more businesses

are very likely to close their doors due to

unsustainable rent levels.”

Zahra adds, “If retailers fall over due to rental

costs, landlords may not be able to replace them

– it’s better to have a tenant with reduced rent

than an empty store. It would make more sense

to come to an arrangement that allows that

tenant to continue to trade profitably.”

For retailers, the balance of power has tipped

slightly in their favour. In addition to further

regulatory protections and free state-based

mediation services, the Australian Competition

and Consumer Commission (ACCC) recently

issued a draft determination granting new

collective bargaining powers to the ARA and its

members.

“The ACCC’s draft determination will help

our members exchange information and

collectively bargain with landlords to achieve

more productive outcomes during this

uncertain time,” Zahra says.

“I am sure the relationship will be

more amicable with more mutual

benefits, rather than it being a ‘my

way or highway’ approach.”

Balaji Sambasivam, The Jewellery Group

“The provision is time-bound, and is

scheduled to elapse on 1 September

2021, which will provide retailers with a

crucial opportunity to inform themselves

and understand what is going on in the

marketplace. This will help press the reset

button on future lease agreements.”

Meanwhile, Sambasivam predicts that “the

valuations and cost structure of operating the

stores will come to realistic levels, and landlords’

objective at this point in time is ensuring that

more stores are open for trading.”

38 | August 2020


Retail Rent Review | STRATEGY FEATURE

When it comes to the timing of a negotiation,

Fonteyn observes that landlords have been

“very accommodating” for his clients and

have presented the most favourable terms in

10 years.

“Landlords are desperate for certainty or

repeat income, so the next year or two is a

great time to negotiate if you are due for a

lease renewal,” he says, adding the caveat

that with so much uncertainty, particularly

the potential for further lockdowns and

closures, retailers may instead take a ‘waitand-see’

approach.

Indeed, he notes that many commercial tenants

are “on holdover” – paying rent month-bymonth:

“They are dealing with all the COVID-19

legislation and paperwork, so most are not

even thinking of renewals at the moment, they

are just getting through to September.”

In the long-term, Fonteyn predicts rents will

adjust in line with the retailer’s sales: “Retailers

can’t continue to run businesses that are not

profitable. It’s going to be much more about

what’s sustainable for that business – and if

the business is profitable, then the rent should

align more broadly with the average for that

sort of category,” he explains.

While jewellery stores have previously been

“in the crosshairs of shopping centres” to pay

a higher rate per square metre for premium

sites, Fonteyn advises that jewellers will be less

receptive, as the vulnerabilities of the category

have been laid bare.

“If retailers

fall over due

to rental costs,

landlords may

not be able to

replace them

– it’s better to

have a tenant

with reduced

rent than an

empty store.

It would make

more sense

to come to an

arrangement

that allows

that tenant

to continue

to trade

profitably.”

Paul Zahra,

Australian

Retailers

Association

Speaking at the Virtual Retail Summit,

Julia Forrest, a portfolio manager at

investment firm Pendal Group, said,

“We’re looking at it as an opportunity for

rents to be reset to sustainable levels

and once they’re at sustainable levels it

will give us the confidence to put a high

multiple on those earnings as retailers

and sales improve.” She rejected a Premier

Investments-style model as unacceptable

to shareholders.

Salera views the future of retailerlandlord

negotiations through a

pragmatic lens: “There are certain lease

parameters that landlords have considered

to be non-negotiable, and I doubt that we

will see a situation where small to medium

retailers will be able to vary these core

terms.

“However, I believe that landlords will

be inclined to be more lenient in areas

where they have greater latitude to

negotiate, rent being one such area.”

Those sentiments were echoed by

KPMG’s Cohen, who said: “I don’t

necessarily think retailers will be able to

get more out of the landlords, but both

will be able to create more value if they

shift to a more collaborative approach.”

Sambasivam reached a similar

conclusion, saying, “I am sure the

relationship will be more amicable with

more mutual benefits, rather than it

being a ‘my way or highway’ approach.”

Meanwhile, Ryan cautions retailers against

dismissing landlords’ requirements – yet

insists landlords must also manage their

obligations to tenants.

“The problem about renegotiating rent

is one of fairness to both parties.

“A landlord must get a return on

investment or the asset will become

starved of capital and operational

expenditure – and that includes

promotions which attract customers.

A retailer needs the lowest rent possible

to survive,” he explains.

“It is not landlords’ job to subsidise a retail

business, but lease costs should reflect

what is being delivered to the retailer. If it is

the wrong type of foot traffic or a low level

of foot traffic, then the onus falls to the

landlord to either improve the outcome or

reduce the rent.”

Ultimately, the onus is on both retailers and

landlords to negotiate leases that benefit

both parties. Without sustainable rents,

more retailers will fail – and landlords will

lose tenants and therefore income.

However, with realistic and flexible

terms in place, retailers can thrive in

the new trading environment while

landlords can expect stable profits that

perform over the long-term. The result

is mutually assured success, rather

than destruction.

USEFUL LINKS & RESOURCES

Victorian Small Business Commission

13 87 22

NSW Small Business Commissioner

South Australian Small Business

Commissioner

Small Business Development Corp. (WA)

13 31 40

Queensland Small Business

Commissioner

1300 312 344

Business Tasmania

1800 440 026

Tenancy Unit, Consumer Affairs (NT)

1800 019 319

ADDITIONAL RESOURCES

Australian Retailers Association (ARA)

1300 368 041

National Cabinet Mandatory Code of Conduct

Australian Treasury

KPMG Beyond COVID-19: The Shifting

Foundations in Retail Property

August 2020 | 39


From our inventory, to yours...

BECOME AN OFFICIAL

STOCKIST

Due to an increase in enquiries from retail customers,

we are upgrading the online presence of our stockist

function on our website. It’s another way O’Neils Affiliated

are trying to keep the Australian Jewellery industry

vibrant and busy in the face of overseas and online sales.

Please visit www.oagems.com

or call our friendly team on 03 9654 5200

for more information.


BEST OF BUSINESS

Feature

Navigate the future of customer relationships

by embracing technology

As online shopping increases, STEVEN VAN BELLEGHEM says that customer relationship remains an important

driver of loyalty – and retailers can boost it by understanding consumers’ digital expectations.

Customer relations are in transformation

and pre-sales, sales and after-sales

are changing at high speed. Companies

need to figure out the current customer

journey, the role of self-service, their

data strategy and much more.

A few years ago, this author conducted

a global study on the future of customer

relationships in collaboration with datacollection

company SSI and translation

agency No Problem!

The study investigated all aspects of a

modern customer relationship and the

highlights were as follows:

Adoption of new technologies

Rogers’ Adoption Curve is a concept by a

communications studies professor named

Everett Rogers that seeks to explain

how, why and at what rate new ideas and

technologies spread.

Rogers first published the concept in 1962

in his book The Diffusion of Innovations

and the curve is well-known – every

manager, marketer and entrepreneur

refers to this body of thought from time

to time. He divides adopters into five

categories: innovators, early adopters,

early majority, late majority and laggards.

People are more aware than ever before of

the newest products and models as soon

as they hit the market, and never has the

public been so awake to the possibilities

that are coming their way.

Furthermore, the intention to buy these

new products is high, a position that

sharply contrasts consumers’ approach to

new technology a few decades ago.

In studies from the early 1990s in which

respondents were asked about their

intention to buy a mobile phone someday,

the most popular answer was a firm ‘No!’

Some 25 years later, that sentiment has

changed completely.

This is how it usually went with new

concepts: the ‘average Joe’ or Rogers’

so-called ‘early majority’ failed to see the

point of most new technology.

Yet reactions today are very different.

For instance, 66 per cent of people say

they are interested in buying a smart TV

one day, one in two are actually looking

forward to the introduction of smart cars,

Never

underestimate

the impact of

real people.

Human contact

is crucial in

most customer

relationships,

even in the

digital world

smart shoes and refrigerators are slightly

lower down on the wish list but the idea of

a smart thermostat is very popular.

Today, a mobile phone has become just

another fast-moving consumer good

(FMCG) and the average consumer

replaces their smartphone every 18

months – one wouldn’t have to travel back

in time too far to find a generation who had

the same home phone for 18 years!

Things are moving quickly indeed. The

classic Rogers’ Adoption Curve probably

still exists, although its upward or

downward tilt is probably slightly more

pronounced than before.

Life is faster nowadays, not only in the

introduction of new technologies but the

obsolescence of outdated ones.

The rise of digital offline

Traditional retailers are afraid of

‘showroomers’, the shoppers who look

around their stores and ask staff for expert

advice only to go home and order the

product online.

This fear is justified: a study has shown

that 46 per cent of Americans have been

August 2020 | 41


Best of Business | NAVIGATE THE FUTURE OF CUSTOMER RELATIONSHIPS

known to ‘showroom’.

However, the same study also revealed

that ‘reverse showrooming’ is an even

bigger trend – 69 per cent of consumers

research products online and then visit an

offline store to order the product of their

choice.

In the SSI/No Problem! study mentioned

earlier, one of the aspects under

investigation was how consumer

expectations are changing with regard

to the offline (bricks-and-mortar) shopping

experience.

The results were clear: consumers

expected the online and offline worlds to

integrate in the near future. In many cases,

that’s exactly what is happening.

The study showed that consumers expect

an increasing level of interaction and

digitisation in the offline sales outlets.

For example, 63 per cent expected stores

to install interactive screens enabling

consumers to look up details on specific

products during their visit, and 64 per cent

wanted the option of ordering a product

online right away if it was not on stock.

The latter figure illustrates the evolution

of offline toward online and back again.

What’s more, 73 per cent of consumers

feel it’s a plus when an online store also

has an offline sales outlet.

Flexible pickup and delivery options will

also become an increasingly crucial part of

any retailer’s online strategy.

Know the customers

Consumers exhibit a growing aversion

to repeating themselves so the key issue

for consumers is to be recognised as a

customer across all channels.

Currently one in three people expect sales

personnel to know that they searched

online and browsed a product prior to their

visit; they want to hear the right answers

right away without having to tell the same

story over and over.

Strikingly enough, this phenomenon is

roughly the same across the world.

Data benefits all

A large portion of the public is still clueless

as to how companies can use their data.

The SSI/No Problem! report showed very

little opposition to the possible use of

consumer data for specific purposes but

only a limited number of consumers are in

favour of such practices – most consumers

are indifferent and have adopted a ‘wait

and see’ attitude.

If consumers had their way, retailers

would primarily use their data to send

them personalised information, something

that 46 per cent of respondents would

welcome.

It’s striking to note that the Dutch, who

are traditionally frontrunners in the field

of digitisation, are the most sceptical of

corporate use of personal data – just 30

per cent of Dutch consumers are okay with

companies using their data.

Countries such as Belgium, Spain, Italy

and also Singapore are much more open

to such strategies, and more than 50

per cent of consumers in those nations

expect better service through the use of

consumer data.

The personal digital world

Several years ago, Peter Hinssen wrote

The New Normal, where he argued that

businesses would need to address a

society without digital limits, where they

are increasingly faced with customers

and consumers who no longer tolerate

limitations in terms of pricing, timing,

patience, depth, privacy, convenience

and intelligence.

This is now a reality. Still, it would be

premature to write-off everything situated

in the human and offline realm just

because the digital society has become

the norm.

On the contrary, consumers all over the

world share the same basic concern for

wanting to build a digital relationship

without losing the interpersonal, human

contact of face-to-face relationships.

Only a handful of companies can do

without but, as always, there are

DIGITAL

CUSTOMER

SERVICE

Upgrade

technology

Consumers are

increasingly

oriented to

new channels

and products

– don’t get left

behind

Embrace the

showroomer

Integrate online

and offline

sales to take

advantage of

showrooming

and ‘reverse

showrooming’

Use data

wisely

Shopper

data can be

leveraged

responsibly

to improve

service and

increase

satisfaction

Retain the

human touch

Consumers

still prefer a

human option,

so be wary of

full automation

when it comes

to customer

service

exceptions to the rule – companies like

Amazon and Booking.com are hugely

successful despite minimal human

intervention.

Google is another case in point, but how

many companies can do what these

leading companies are doing?

The answer lies in their excellent track

record when it comes to customer

interaction. Consider these and it’s easy

to see why they are the exceptions.

In contrast, a company like Dutch

e-commerce business Coolblue has

made a conscious choice to cultivate

human contact.

When an online player opens offline

stores and records videos of employees

recommending their services, it is a wellconsidered

and very intelligent strategy.

Closing thoughts

Never underestimate the impact of real

people. Human contact is crucial in

most customer relationships, even in the

digital world.

Nearly three quarters of consumers like to

have the option of talking to a flesh-andblood

person, even when digital channels

are working perfectly.

The simple fact that this possibility exists

creates peace of mind that many people

still value.

The personal touch is in the little things

– one in two consumers like it when a

business addresses them by name, for

example. Retailers must get to know their

customers so they can personalise the

customer experience.

Of course, the great thing about all this is

that jewellery retailing is one business that

still thrives on human contact, excellent

advice and emotional purchasing.

STEVEN VAN BELLEGHEM is a keynote

speaker and author focusing on customer

relationships and marketing in a digital

world. Visit: stevenvanbelleghem.com

42 | August 2020


BEST OF BUSINESS

Selling

Shut up and listen to your customers

Listening is central to the selling process and is also at the core of good customer service practices.

RICHARD SHAPIRO explains the true meaning and benefits of this crucial sales tactic.

When staff listen patiently, it gives

customers a feeling of control.

Customers want to know they are

uniquely important and that their

specific needs are being addressed.

They don’t want to feel trapped because

you are trying to sell them something.

After all, selling is not about offering

customers a long list of items but

discovering what the customer wants and

matching a product to it.

What is the best way to achieve that

goal? By engaging the customer in a

meaningful and personal dialogue.

If staff spend their time listening, they

will give the customer that special feeling

of priority.

Listening pays big rewards

Joe Girard is the world record-holder

for selling cars. He began in 1963 at

a Chevrolet dealership in Detroit, US

and retired in 1977 with an average

sell-through rate of six automobiles (or

trucks) a day over the length of his career.

To put that in perspective, the average car

salesperson sells seven cars a month!

In fact, Girard exceeded his own lofty

expectations when he sold a whopping

18 cars in a single day!

Girard gave so much attention to each

customer that word spread and it wasn’t

long before there was a line outside his

office with people waiting to exclusively

see him.

He started making appointments to

ensure each customer would get his

undivided attention.

He also did this because he knew his

attention was worth the wait and he

advised others of this, saying, “People

may have had to wait for an appointment

but when I was with them, I was with

them body and soul.”

Listening to emails

Recently, one of my clients wanted to

know how their service and support for

email responses compared with those

of 20 other companies, each of whom

were customer service leaders in their

respective fields.

You never

know where a

conversation

may lead! Listen

with your

ears and your

heart before

responding.

Make the

customer feel

respected and

important

To achieve this, 10 different email

enquiries were developed to send to

target companies so we could measure

the speed and type of responses.

In one scenario, the test email began,

“I just had a baby and have a question

about your product.” Only one of the

companies acknowledged the news in its

response: “Congratulations on the birth

of your child.”

Obviously the other respondents ignored

the underlying emotion even though it is

easier to pay attention to an email than

to a conversation.

For example, you have an opportunity to

re-read the email, which is considerably

easier than asking a customer to repeat

what they have just said.

Another test email went like this:

“My dog accidentally chewed and

digested part of your packaging. Do

I need to worry?”

Several of the companies answered

almost instantly with the reply, “Please

take your dog to a veterinarian.”

44 | August 2020


EARS THE

THING

Give

your full

attention

Focus on your

customer and

engage with

their needs

Keep emails

personal and

relevant

Reply to queries

in a timely

manner and

address the

specifics of

each one

Start a

dialogue

Listen for

key phrases

and create a

conversation

Good reply. The only problem was that a couple

of the companies didn’t send that message

until two weeks later!

Listening is not just listening; it’s also acting

upon what you have heard. In this case, offering

such a slow response to a potential emergency

might actually communicate less care on

the company’s part than if there had been no

response at all.

Missing the signal

Do you remember the great comedian and

TV personality Groucho Marx? He had a show

called You Bet Your Life where any contestant

that mentioned the magic word of the day

would be rewarded with a prize, and a rubber

duck would fall from the ceiling to celebrate

the moment.

When I was doing research for my first book,

I would frequently make a statement, a ‘magic

phrase’ to determine if a sales associate was

a good listener. It’s intended as an opening to

engage the customer.

For example, I would start the conversation

by saying one of the following:

• This is my first time in your store;

• I just moved into the neighbourhood;

• My friend suggested I might like your

merchandise;

• I’ve never used your website before;

• This is the first time I have called your

contact centre;

• I have been buying this since I was

a teenager.

A representative who answers with just “Okay”,

“That’s nice” or says nothing at all has missed

a golden opportunity to start a dialogue critical

to securing repeat business. You never know

where a conversation may lead!

Listen with your ears and your heart before

responding. Make the customer feel respected

and important.

When you pay attention, you can hear the

underlying emotion and then establish a

human-to-human connection that has the

potential to last a long time.

LED UVC Steriliser to destroy

germs, viruses and bacteria.

Use on phones, pens,

jewellery & more.

LED UVC Steriliser to destroy

germs, LED UVC viruses Steriliser and to bacteria. destroy

germs, Use on viruses phones, and pens, bacteria.

Use jewellery on phones, & more. pens,

jewellery & more.

$179+ GST GST

$179+ GST

$179+ GST

Sanitising cycle only takes

A

3

Sanitising

minutes, and

cycle

an

only

audible

takes

3 minutes, voice tells and you an when audible

A Sanitising cycle only takes

A Sanitising cycle only takes

sanitisation 3 voice minutes, tells and you is an complete. when audible

sanitisation 3 minutes, voice tells and you is an complete.

when audible

sanitisation

voice tells

is

you

complete.

when

sanitisation is complete.

RICHARD SHAPIRO is founder of The

Center For Client Retention, offering

research, training and consulting services,

and author of The Endangered Customer:

Eight Steps to Guarantee Repeat Business.

Visit: tcfcr.com

Contact (02) 9417 0177

Contact (02) 9417 0177

Contact (02) 9417 0177

Contact (02) 9417 0177


BUSINESS

Management

“Jeff, you’re great with

customers but we can

tell that you’re not yet

confident in jewellery

knowledge. I think a few

days with Lisa at the

bench and sorting gems

with me might be helpful.

We’ve also noticed that

you like working with

pearls, so maybe we can

give you a pearl sales

quota this month. What

do you think?”

Top performance review tips for managers

Striking a balance between praise and constructive criticism can make performance reviews more productive

and satisfying for all parties. BARBARA CROWHURST outlines ways to get the most out of the process.

Performance reviews are a lot like

walking a tightrope: withholding

positive feedback can discourage and

demoralise employees, while failing

to discuss problem areas can mean

employees never improve.

Staff appraisals must be recurring

events. In addition to providing ongoing

feedback during the year, managers

also must let staff know what time of

year reviews take place.

To ensure reviews are useful, managers

should follow these tips.

Allow enough time to prepare

Performance reviews are only valuable

if managers and employees are given

the time and resources they need to

prepare for them.

Give staff the opportunity to identify

their achievements from the past

year and areas where they would like

to improve.

Keep files on employees

When hiring a new staff member, create

a file that contains performance review

notes. This serves to document the good

and bad aspects of that employee’s job

performance and work habits.

Use the file to catalogue their

accomplishments and also to track

performance-related issues such as

tardiness. The file will act as a record of

items to be discussed at the next review.

Solicit third-party feedback

Managers shouldn’t rely solely on

their own perceptions of an employee,

particularly if interactions with the

individual have been limited. Seek

feedback and comments from

colleagues and others who work closely

day-to-day with the employee.

Enquire about his or her strengths and

weaknesses, as well as areas that have

improved over time and special abilities.

Ask specific questions, such as how

does he or she handle challenges

and overcome obstacles and what

contributions have they made to

team-based projects?

Employees

may need time

to digest the

feedback from

a review so

encourage them

to come back

afterward if they

have questions

or concerns

Does the staff member seem

committed to continuing professional

education and skills development?

Compare the feedback.

Allow enough time for assessment

Don’t wait until the day before a review

to start tracking and critiquing a staff

member’s performance – this is unfair

to the individual and will not give an

accurate, comprehensive picture of his

or her abilities and achievements.

Instead, try to observe the employee

in a variety of situations over an

extended period. Assess how well he

or she manages both independent and

collaborative assignments.

Create a conducive setting

Choose a quiet, private place for

the review and schedule it at a time

when interruptions can be kept at

a minimum. When structuring the

session, incorporate time for a two-way

dialogue so that the employee can

respond to feedback and offer input of

his or her own.

46 | August 2020


Treat the

session as

a two-way

conversation

To prepare for the meeting, organise all

documentation – previous evaluations,

comments gleaned from colleagues and

other notes.

Give the employee sufficient notice to

prepare also.

Set the appropriate tone

The review should be handled in a

professional manner and treated as a

conversation, not a lecture.

Open the discussion by talking about

the employee’s accomplishments and

positive attributes. When it’s time to shift to

negative or problematic areas, focus not on

mistakes but on ways to improve.

Most employees will not be surprised

by anything they hear during a review;

however, if there’s a gap between an

employee’s perceived performance

versus actual performance, be sure to

explain the difference and suggest ways

performance goals might be met.

During the discussion, invite comments

on any observations. Talk about future

expectations and clarify job requirements

and responsibilities. Enquire about the

employee’s professional-development

goals and discuss how to work towards

meeting them.

Be courteous and tactful and focus on

behaviour rather than personality when

being critical.

Maintain an open door

Employees may need time to digest the

feedback from a review, so encourage

them to come back afterward if they have

questions or concerns.

If managers show that performance is

REVIEW

CHECKLIST

Give the

employee ample

notice and time

to prepare

Seek feedback

on performance

from others and

study previous

evaluations

Treat the session

as a two-way

conversation

Focus on

goals and

achievements as

well as areas for

improvement

not a once-a-year issue but a matter of

ongoing importance, staff will focus less

on the formal review itself and more on the

feedback and guidance they receive.

They’ll be motivated to see feedback as a

way to help them with their performance.

By preparing well in advance for

performance reviews and developing a

systematic, consistent appraisal process,

managers can turn what could be an

uncomfortable time into a chance to

chat with team members and set goals

for the future.

Who knows? Both parties may even start

to look forward to these feedback sessions

and the business will benefit as a result.

BARBARA CROWHURST is CEO

of Retail Makeover as well as an

internationally-recognised retail

consultant. Visit: retailmakeover.ca

We are

here to

help fulfil

your ideas

We are here to help you fulfil your ideas. As a

customer-focused Australian business, we aim

to service the needs of the retail and wholesale

jewellery industry by helping to centralise the

development of innovative products and concepts.

For our existing branded products, we offer

packaging, instore displays, care cards and coop

advertising alongside an active social media

campaign to supplement the story of the brand.

We are

here to

make your

job easier

It’s been challenging, but lockdown has been a

helpful time to review the way we present products

on our selling platforms.

To help ensure your online showcase look beautiful

online, we have compiled our product images,

marketing material and logos for your use. Contact

us today for immediate access.

Also offering credit facilities, resizing and repairs,

warranties, customised manufacturing and nextday

delivery.

OUR BRANDS

03 9555 9344

SALES@PFJ.COM.AU

WWW.PFJ.COM.AU


BEST OF BUSINESS

Marketing & PR

Grab your customers’ attention!

In an age of instant communication, impersonal communications fail to impress consumers – instead, business

owners must grab and hold shoppers’ attention, writes BARRY URQUHART.

It is so difficult to get a message

across nowadays. Nobody seems

to be listening, reading or valuing

relationships – consumers are failing

to recognise brands, exhibit loyalty

or refer services.

Everyone seems distracted and

uncommitted, more inclined to hit

delete than reply because it’s easier

to pretend that the communication

was never received.

The ubiquity of social and digital

media means messages are no

longer resonating with their intended

audiences.

A universal lowering of costs in digital

channels has been instrumental in

increasing the affordability and volume

of mass communications – but it’s all

for little to no avail.

Even personalised greetings are

marginally effective at best.

Doing so much, so often is becoming

a common practice that is only

contributing to the problem. Attention

has become a goal; however, it is

commonly out of reach for many.

Content is another tactic – yet, in

many instances, it is poorly structured

and delivered.

Marketing practitioners are

recalibrating the long-held maxim that

50 per cent of their advertising works

and 50 per cent doesn’t, they just don’t

know which 50 per cent works.

Today, there is an 85–90 per cent

rate of ineffective, non-responsive

advertising, marketing and promotion.

It is a daunting set of statistics and

implications.

Deliver the promise

Targeted consumers and existing

clients are increasingly informed,

discerning, price-sensitive and highly

expectant of both great quality and

value.

They seek out, utilise and regularly

return to sources which they find

credible, verifiable, transparent and,

above all, authentic.

High expectations are believed to

be the cause of considerable harm.

Webinars are trying to address them;

An interesting

allure is to

offer realtime

personal

responses. This

is something

that around

80 per cent

of business

clients and

64 per cent

of consumers

welcome

and value

however, the delivery skills of an

overwhelming majority of speakers are

poor – sometimes appalling – and this

reflects badly on companies and their

products.

Personal presentation skills are

only partial measures for increasing

relevance and impact. Sadly,

reincarnations of the late Steve

Jobs seem everywhere but lack his

immaculate delivery.

Conference stages are regularly

inhabited with storytellers dressed

in black roll-neck skivvies and black

trousers. Talk about commoditisation!

Step up, stand up

The filtering or blocking of much

communication is a consequence of

stereotypical perceptions and resultant

generalisations. Don’t take it personally.

In many instances, intended recipients

don’t filter or reject individual

communications.

Rather, they just apply a blanket cover

to every email, blog or text that comes

their way. It’s a coping mechanism

48 | August 2020


ATTENTION

RETENTION

Keep marketing

communication

targeted and

precise

Short, enticing

subject lines

and texts

appeal to busy

consumers

Ensure

long-form

communication

is authentic and

entertaining

Respond to

customers in

real time and

with sincerity

rather than discrimination, and it seems

necessary in a world swamped with advertising

messages.

To achieve human connection and elicit positive

engagement, more focus and effort is needed

on attracting attention.

Short attention spans dictate the need to

formulate and implement snappy headlines,

limited to concise, enticing and compelling

three-to-five-word phrases.

Overcoming filters

Consumer indifference pervades. Enthusing

and motivating unmotivated and disconnected

minds is a difficult challenge.

Endeavouring to change people may be futile.

In the words of Leo Tolstoy: “Everyone thinks

of changing the world but no-one thinks of

changing himself.”

An interesting allure is to offer real-time

personal responses. This is something that

around 80 per cent of business clients and 64

per cent of consumers welcome and value.

Increasingly, recipients of countless

communications recognise and are offended by

impersonal, mass-distributed missives. In this

form, personal salutations are conspicuous

and often deemed to be offensively insincere.

Accordingly, they do not counter those

widely-held negative generalisations about

promotional emails, blogs and texts.

Remember that the loss of a customer is

only one bad experience away. Many potential

relationships are never established because

the first exchange between business and

consumer is a communication that lacks the

vital ingredients to attract attention.

It is an art form

Disturbingly, many supposed digital and

online-marketing experts are deficient in their

ability to attract attention for clients; they are

good at registering with algorithms, which lack

dimensions of emotion.

By ensuring concise headlines, respecting the

power of brevity and providing credible and

authentic personal advantages, businesses

can reap benefits when targeting their

promotional messages.

BARRY URQUHART is managing

director of Marketing Focus. He has

been a consultant to the retail industry

around the world since 1980. Visit:

marketingfocus.net.au

Offer:

FREE SHIPPING

on orders over AUD$300 until 31 st July

As we continue to face uncertain times, we want to reach out

with wishes of love, hope and strength and remind you that Stow

Lockets remains committed to supporting our valued retailers.

Stow Lockets can be carefully stylised, creating a sentimental

heirloom jewellery piece for your customers.

One which will be cherished forever.

sales@stowlockets.co.nz | +64 7 281 1509

stowlockets | #preciousstories | stowlockets.com


BEST OF BUSINESS

Logged On

Find yourself: reviewing your online presence

There are multiple factors contributing to how customers see you in the digital realm – many of which you can

control. DAVID BROWN asks if it’s time to conduct an online audit of your website, listings and social media.

I was chatting with a friend recently

about the ‘good old days’, back before

the Internet was a part of our lives. We

didn’t have data in our pockets and if we

needed directions, we’d use a map.

Our spare time was spent reading or

watching television rather than looking at

videos or surfing through Facebook.

Words like Google didn’t exist in our

vocabulary and swiping was something

you reserved for flies and insects that

bothered you!

Now the Internet is a part of our lives,

yet some of us are still of a generation

where we occasionally forget it is

there and the impact it carries as our

ambassador to others.

For many customers, the first experience

they have of your business is online,

often when searching for you in Google

or Facebook.

So, how does your profile stack up?

The online audit

A quick online search for your company

should show your business appearing on

various platforms – some of which you can

control, such as your website, and some of

which you can influence, like social media.

There could be several other platforms

you may not even be aware of, such as

review sites or blogs.

This is your online profile and it’s

important you are aware of it and manage

its impact, as it can be just as important to

your business and its brand image as your

store windows.

Fix your digital presence

Here are the elements you need to review

to get your online profile in great shape:

Your website – How close to the top does

your website appear in Google’s search

results? If customers have to go to page

two of Google to find it, or even further,

then that’s an issue.

This should be your main online presence

and customers can’t find you if you are

buried at the bottom of the list.

Business social media – The key socialmedia

apps are Facebook, Instagram and

Twitter. If you post images to Pinterest

Positive

coverage is great

but if there are

unfavourable

reviews or

articles, you

should take

action to deal

with them –

show that you

are listening

and that you are

ready to fix the

issue

or your customers have shared images

of your products there, you can add it to

the list too.

You may also publish videos for your

business on YouTube or Vimeo.

The good news is you can influence how

you appear in any of these areas of the

Internet. Are you managing your socialmedia

pages? If so, when did you last post

any updates?

Are you interacting with followers,

including responding to questions or

complaints in a timely manner?

If your social-media accounts have turned

into ghost towns then it doesn’t reflect well

on your business. Customers might even

think you’re no longer trading!

Update your pages regularly with engaging

and informative content about your

products and services including updating

your opening hours.

Be creative but remember to comply with

the terms of use. Big companies control

the space – Facebook owns Instagram and

Google owns YouTube – and they can shut

down profiles that don’t play by their rules.

50 50 | | August August 2020 2020


ONLINE

EVALUATION

1. Check your SEO

to ensure potential

customers can

find you when

they search on

Google

2. Make sure

your social

media channels

– Facebook,

Instagram, Twitter,

and Pinterest

– are regularly

updated and

engaging

3. Manage

online reviews

and ensure any

questions or

complaints are

swiftly addressed

4. Keep tabs on

external coverage

such as press

articles and blog

posts – re-share

the positive

and address the

negative in a

constructive way

5. Don’t neglect

your personal

accounts, such

as LinkedIn,

which can be

helpful in hiring

employees as well

as promoting your

business

Private social media – As a business

owner, you may be well-known to people

in your area and some of your customers

may even be friends with you on socialmedia.

Remember that your online actions

can always be seen by others.

This means last Friday’s drunken photos

may be seen by your customers as well as

your friends!

Your LinkedIn profile is another important

personal profile that can have a positive

impact on your business.

Make sure you have a good-quality

professional picture, an up-to-date profile

and a description of yourself.

Build a wide network of contacts too, as

this could make life easier when it comes

time to hire new employees.

Other sites – Where else do you appear

online? You might be in a local directory

listing like TrueLocal or you might appear

on review sites such as Review.com.au.

Perhaps an article has been written about

you or your business is mentioned in an

influencer’s blog post.

Think about how you appear on these

pages and the impression potential

customers might get of your business if

they were browsing these sites.

Positive coverage is great but if there

are unfavourable reviews or articles, you

should take action to deal with them. If

there is a customer complaint, give that

customer the courtesy of a reply. Show that

you are listening and that you are ready to

fix the issue.

Customers know there will sometimes be

problems and misunderstandings; it’s how

you deal with it that defines your business.

Reviewing your online presence is a task

you should complete regularly and it pays

to keep a constant eye on your social

media platforms at all times.

Many of your new customers will discover

you via these mediums, so be aware of

what they see and the impact it can have

on your business.

We Are

Your Workshop

Your local service for all of your

manufacturing needs

FREE RHODIUM PLATING ON ALL

• Custom Makes

• Repairs & Remodelling

• Large & Small Setting

• Resizing

DAVID BROWN is co-founder

and business mentor with Retail

Edge Consultants. Learn more:

retailedgeconsultants.com.au


My Bench

Laurie Moffatt

Laurence Moffatt Manufacturing Jewellers, Sydney NSW

Age 64 • Years in Trade 47 • Training 4-year apprenticeship • First job Bernard Lowry Jewellers, 1973 Other Qualifications Diploma in Gemmology

SIGNATURE PIECE

GOLD HOLLOW BANGLE

PRIVATE COMMISSION

This 18-carat gold bangle was commissioned by a client to

celebrate her 30th wedding anniversary. The design was

based on a costume jewellery bangle she owned. I love outof-the-box

commissions and also restoring Australian antique

pieces. These have included gold brooches presented to the

famous Spanish dancer Lola Montes, to silver emu-topped claret

jugs, emu eggs and centrepieces made by notable Australian

silversmiths of the 19th Century.

4FAVOURITE GEMSTONE Sapphire because of

the variety of colour, durability, and that Australia

is a great natural source of it.

4FAVOURITE METAL 18-carat yellow gold

because of its malleability, depth of colour and

hue, and it is a pleasure to deal with!

4FAVOURITE TOOL An Italian saw bought at the

start of my apprenticeship, which allows you to cut

out a baguette setting or more intricate designs.

4BEST NEW TOOL DISCOVERY My coffee

machine! Otherwise, it would be the best linear

engine turning lathe.

It was manufactured by George Plant & Son in

England and has been unsurpassed for hundreds

of years.

4BEST PART OF THE JOB Simply sitting

and creating.

4WORST PART OF THE JOB Polishing!

4BEST TIP FROM A JEWELLER Simplistic designs

often work out the best.

4BEST TIP TO A JEWELLER One of the most

important elements of the job is communication

and understanding between you and your clients.

4BIGGEST HEALTH CONCERN ON THE BENCH

The back – definitely the back!

4LOVE JEWELLERY BECAUSE Of its challenges

and the way it helps you to discover your abilities.

52 | August 2020


OPINION

Soapbox

Learning from the past,

looking to the future

It is all too easy to fall into despair during tough times, but jewellery retailers and suppliers alike

shouldn’t lose sight of opportunities or be afraid to adapt, writes DARREN ROBERTS.

When Neil McCammon and I acquired

Cudworth Enterprises almost exactly 18

years ago, we had the goal to become the

market leader for men’s fashion jewellery

in Australia. It was a huge undertaking to

grow the Cudworth brand both here and

then later, internationally.

We were taking over a business that had

been established in 1921 – just three

years after the end of World War I.

At that point it was known by the company

name Norman P Joseph, and it had gone

through several other changes of name,

and management, in that time.

The name Cudworth Enterprises was

adopted in 1979, when Dennis and Leslie

Cudworth took over.

To put that into perspective, our business

had been through the Great Depression,

World War II, and various other recessions

and downturns all before it fell into

our hands.

However, standing the test of time doesn’t

mean standing still.

It is about agility, the ability to move with

the times while still maintaining the

qualities that makes your business and

your product special.

It is about never being complacent and

remaining positive and hopeful during the

down times.

We were the first company to introduce

stainless steel jewellery into Australia,

and three years after we bought the

business, we expanded into our first

international market: New Zealand.

expanded internationally again – this

time into the UK and Europe. Shortly

afterwards, in 2013, there was another

downturn and this time our business did

feel the effects.

However, again we pushed through, and

began 2020 having achieved our goal to be

the market leader in Australia for men’s

cufflinks, jewellery and accessories.

In addition, we also formed another

division of Cudworth for the distribution

of luxury European brands such as Hugo

Boss writing instruments, Tateossian,

Hoxton and Lanvin.

Then came the biggest challenge any of

us have faced: COVID-19.

Those previous setbacks – which many

other businesses in the jewellery industry,

and beyond, have experienced alongside

us – simply pale in comparison.

Yet we have found that the lessons we

learnt from the past still apply.

With a proactive mindset, we have used

this time to communicate with retailers to

build an even closer working relationship,

as well as speaking to other suppliers.

We have maintained our high level of

service by taking a look at our best-selling

lines and ensuring they are

always in stock.

We have improved our website and

even assisted retailers with theirs, and

have worked with buying groups on

Father’s Day and Christmas catalogues

to ensure our products are properly

promoted to retailers.

Our business

had been

through

the Great

Depression,

World War II,

and various

other recessions

and downturns

all before it

fell into our

hands. However,

standing the

test of time

doesn’t mean

standing still

resilience throughout 2020. Overall, I

have observed strength and positivity

from most retailers I have encountered

during the pandemic – and even seen new

blood coming into the industry, which is

refreshing.

One example was a young retailer in a

northwest suburb of Sydney who had

taken over the family jewellery business.

He moved the store to a new location

and began trading in April! It was a risky

decision, of course, but the store is

doing well.

The reason for that is because the

retailer could call upon the experience

of the past and the established strengths

of the business, while combining it

with an ambitious, adaptable, and

optimistic vision.

It is a neat metaphor for the approach

that’s needed in business – not just during

crisis periods, but at all times.

In this most difficult of years, we have

called upon Cudworth’s nearly a century

of heritage to guide us: we are sticking

to what we know best – men’s jewellery

and accessories – and we aren’t trying

to develop products that don’t fit under

our umbrella.

At the same time, we are proactively

developing our distribution side for the

luxury European brands.

And finally, we are remaining positive,

remembering that our business has

survived for 99 years. The future will

be new and different, and it’s time to

embrace it.

However, a few short years after that

– when we were on the road to achieving

our ambitious goal – the Global Financial

Crisis hit.

Fortunately, we were able to withstand its

impacts for a time, and in 2011 Cudworth

These steps have served us well in what

has been an incredibly difficult year –

and they are all steps that retailers can

take too.

When it comes to maintaining a hopeful

attitude, retailers have shown their

Name: Darren Roberts

Company: Cudworth Enterprises

Position: CEO

Location: Sydney, NSW

Years in Industry: 18

54 | August 2020


Love isn’t cancelled,

it’s stronger than ever.

Our new ‘Momentum’ partnership provides

the necessary tools to help steer our jewellers

through this crisis with grace and gusto.

We stand together, and hold our community

close to our hearts.

The time is now… we choose love!

Discover the difference today.

Sound like we are made for you?

That’s because we are…

Josh Zarb - CEO

0448 416 070

josh@jewellerscollective.com

jewellerscollective.com

#independentjewellerscollective


SAMS GROUP

SAMS GROUP

SAMS GROUP

AUSTRALIA

AUSTRALIA

AUSTRALIA

Access one one of of the the largest inventories of of Argyle Argyle Pink Pink Diamonds Diamonds in Australia in Australia

All

All

SGA

SGA

Argyle

Argyle

pink

pink

diamonds

diamonds

are

are

cut

cut

&

&

polished

polished

by

by

Argyle

Argyle

with

with

Argyle

Argyle

Certificares

Certificares

& Lot

&

Numbers.

Lot Numbers.

Whether you are after a tender stone for investment, a few melee to complete

Whether you are after a tender stone for investment, a few melee to complete

a custom design or just a single pink diamond, we can make it happen.

a custom design or just a single pink diamond, we can make it happen.

Access one of the largest inventories of Argyle Pink Diamonds in Australia

All SGA Argyle pink diamonds are cut & polished by Argyle with Argyle Certificares & Lot Numbers.

Whether you are after a tender stone for investment, a few melee to complete

a custom design or just a single pink diamond, we can make it happen.

TENDER STONES SINGLE STONES MATCHED PAIRS CALIBRATED MELEE LINES

TENDER STONES SINGLE STONES MATCHED PAIRS CALIBRATED MELEE LINES

T: 02 9290 2199 F: 02 9262 1630 E: Pink@samsgroup.com.au W: Samsgroup.com.au

T: 02 9290 2199 F: 02 9262 1630 E: Pink@samsgroup.com.au W: Samsgroup.com.au


Access one of the largest inventories of Argyle Pink Diam

All SGA Argyle pink diamonds are cut & polished by Argyle with Argyl

Whether you are after a tender stone for investment, a few

a custom design or just a single pink diamond, we can m

TENDER STONES SINGLE STONES MATCHED PAIR

Access one of the

largest inventories of

T: 02 9290 2199 F: 02 9262 1630 E: Pink@samsgroup.com.au

Argyle Pink Diamonds

in Australia

All SGA Argyle Pink Diamonds are cut and polished by

Argyle with Argyle Certificares and Lot Numbers.

Whether you are after a tender stone for investment, a

few melee to complete a custom design or just a single

pink diamond, we can make it happen.

More magazines by this user
Similar magazines