Jeweller - December 2020

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L to R: Rolex; Omega IN SUMM A RY Current State the Swiss watch giant Swatch decided to open an Omega flagship store in Sydney. Although Swatch did not close surrounding Omega accounts, many stockists were up in arms. It is important to note that, in those days, luxury watch and jewellery brands avoided selling their products online. With the subsequent change in strategy – and their slow acknowledgement that they would have to embrace e-commerce – they believed that consumers would still visit a destination brand-only store because of their strong connection to the brand itself. The result is that today, in many cases, the only remaining distribution channel of a luxury watch brand is via a brandonly store – either company-owned or operated under licence. In the jewellery sector, Pandora offers another case study into the changes in market dynamics. The 2010 State of the Industry Report listed the Danish company with one flagship store owned and operated by Pandora Australia, and 41 brand-only stores – some of which were operated by franchisees, and others by Pandora. A decade on, Pandora has 123 brand-only stores – which it refers to as ‘Concept Stores’. It recently announced the closure of its original flagship store in the prestigious Pitt Street Mall retail precinct, which it had occupied since 2010. The company opted not to renew its lease on the premises – which expired at the end of September – following lengthy discussions with Scentre, which is Australia’s largest retail landlord and the operator of Westfield shopping centres. New trends It is possible to compare the 2010 and 2020 data by combining the 2010 categories. Excluding Pandora, this shows that 10 years ago there was a total of 20 watch and jewellery brands in the Australian market responsible for 170 flagship and brand-only stores, compared to 38 brands responsible for 220 stores today. However, as detailed in Jeweller’s State of the Industry Report 2020: Part I, which examined chain stores, Pandora’s business has changed to the extent that we 220 brand-only stores operating in Australia in 2020 72% increase in number of brandonly stores in 10 years 38 watch and jewellery brands operating brandonly stores in 2020 79 number of watch brand-only stores in 2020 TABLE 2: WATCH BRAND-ONLY 2020 BRANDS NSW VIC QLD WA TOTAL Bell & Ross 1 1 Bremont 1 1 Daniel Wellington 2 1 3 Fossil 5 8 4 2 19 Franck Muller 1 1 Hublot 1 1 IWC Schaffhausen 1 1 2 Jaeger-LeCoultre 1 1 2 Longines 1 1 2 Michael Kors 9 5 14 Omega 2 3 1 6 Panerai 1 1 2 Rolex 2 1 2 1 6 Seiko 2 1 3 Swatch 1 1 2 Tag Heuer 1 2 2 1 6 Tissot 2 2 Vacheron Constantin 2 2 1 1 6 TOTAL 31 33 10 5 79 In 2010 there were only six watch companies with brand-only stores, however, a decade on there are 18 operating a total of 79 stores. Some stores are operated by the brand owner, while others are operated under license from the owner. now list its 123 retail outlets as chain stores rather than brand-only stores, in line with the notion that Pandora is not a vertical-market operation. That is, Pandora still has a wide wholesale channel to LUXURY GOODS GROUPS: BRAND OWNERSHIP RICHEMONT 10 BRANDS LVMH 10 BRANDS KERING 6 BRANDS Economists define a luxury good as a product for which demand increases more than proportionally as income rises – the expenditure on a luxury good becomes a greater proportion of overall spending. The international conglomerates cover a wide range of product categories other than watches and jewellery such as fashion, perfumes, cosmetics, eyewear, wines and spirits. Cartier Dunhill IWC Schaffhausen Jaeger-LeCoultre Montblanc Bulgari Chaumet Dior Fendi FRED Boucheron Dodo Girard-Perregaux Pomellato Qeelin In addition, they continue to expand their businesses via brand extensions; moving an established and well-known brand in one consumer category into another. Think Hermes expanding from luxury leather goods to watches and jewellery, or Montblanc from writing instruments. The following tables show brand ownership by luxury group. Panerai Piaget Ralph Lauren Vacheron Constantin Van Cleef & Arpels Hublot Kenzo Marc Jacobs Tag Heuer Zenith Ulysse Nardin Chaumet 48 | December 2020
Brand-only stores | STATE OF THE INDUSTRY L to R: Bulgari; Boucheron independent stockists – unlike, for example, Tiffany & Co., Cartier, and Georg Jensen, which have vertically-integrated business models. A vertically-integrated business consolidates multiple steps in the typical distribution process, from manufacturing to consumer purchase. Hence Pandora stores are now classed as a ‘chain’ for the purpose of our 2020 State of the Industry Report. This means we can compare apples with apples, and observe that there were 128 flagship and brand-only stores in 2010 (excluding Pandora) compared to 220 in 2020. Further, we can see that five of the 19 brands in 2010 (Autore, Briel, Storm, Georgini and Guess) no longer operate any retail stores whatsoever today. Despite this contraction, 24 new brands have entered the market, meaning that there are now 38 watch and jewellery companies operating brand-only stores in Australia. It should be noted here that the increase in brand-only stores has been driven by a number of internationally renowned luxury conglomerates, such as Moët Hennessy Louis Vuitton (LVMH) and Richemont, which cover a wide range of products, from jewellery and watches to fashion and leather goods, perfumes and cosmetics. These groups account for many of the new brand-only stores introduced to the Australian market over the past 10 years – including Montblanc, Chaumet, Hublot, Piaget, Van Cleef & Arpels, Jaeger-LeCoultre, and Vacheron Constantin – and increases in the number of existing brand stores, notably Bulgari and Tag Heuer. International luxury brands such as Chopard and Hèrmes have followed suit. It is notable that Kennedy Jewellers, which was established in Sydney in 1976, operates 10 boutiques (brand-only stores) for Rolex, IWC Schaffhausen, Jaeger-LeCoultre, Panerai and Graff. These have been included in this section of the State of the Industry report, consistent with Jeweller’s definition that brand-only stores can be owned and operated by the proprietor of the brand, or under license by third parties. Rolex, for example, has two other boutiques in Queensland operated by Langfords Jewellers, while owner Richemont operates a second Jaeger-LeCoultre brand-only store in Melbourne. The evolution of the watch and jewellery brand mix over the past decade TABLE 3: JEWELLERY BRAND-ONLY STORES 2020 BRANDS NSW VIC QLD WA SA TAS ACT NT TOTAL APM Monaco 4 2 1 7 Bulgari 1 3 2 6 Cartier 2 1 1 4 Chaumet 1 1 Dior 1 1 2 Georg Jensen 2 4 3 1 10 Graff 1 1 Gucci 2 1 2 1 6 Hèrmes 1 1 Kailis 4 4 Louis Vuitton 2 3 2 1 8 Montblanc 2 2 4 Ole Lynggaard 1 1 Paspaley 1 3 1 2 1 8 Piaget 1 1 Secrets Shhh 2 4 9 1 1 17 Swarovski 20 12 10 2 1 1 46 Thomas Sabo 1 2 3 Tiffany & Co. 2 2 2 1 1 8 Van Cleef & Arpels 1 2 3 TOTAL 44 46 32 13 4 0 1 1 141 There has been a large move by international luxury goods brands to establish brand-only outlets in Australia. Of the 38 watch and jewellery brands with brand-only stores in Australia, nearly 40 per cent are owned by LVMH, Richemont, or Kering. SWATCH GROUP 19 BRANDS FOSSIL GROUP 15 BRANDS MOVADO 10 BRANDS TIMEX 8 BRANDS Balmain Jaquet Droz Adidas Marc by Marc Jacobs Movado Gc Blancpain Léon Hatot Armani Exchange Michael Kors Concord Guess Breguet Longines Burberry Michele EBEL Nautica Ck Calvin Klein Mido Columbia Sportswear Skagen MVMT Salvatore Ferragamo Certina Omega Diesel Tory Burch Olivia Burton Ted Baker Endura Rado DKNY Coach Timex Flik Flak Swatch Emporio Armani Hugo Boss Versace Glashütte Original Swiss Timing Frank Gehry Lacoste Versus Hamilton Tissot Karl Lagerfeld Tommy Hilfiger Harry Winston Kate Spade Scuderia Ferrari December 2020 | 49
Page 1 and 2: VOICE OF THE AUSTRALIAN JEWELLERY I
Page 6 and 7: Australian Argyle pink diamonds are
Page 8 and 9: Baumatic self-winding calibre, 40mm
Page 11 and 12: DECEMBER 2020 Contents This Month I
Page 13: Editor’s Desk Listening to the he
Page 17 and 18: Proudly distributed by 02 9417 0177
Page 19 and 20: Ethical Colombian Emeralds direct f
Page 21 and 22: Louis Vuitton purchases a second la
Page 23 and 24: Pandora launches holiday marketing
Page 25 and 26: For your free copy of the Peter W B
Page 27 and 28: INSIDE Now & Then Fairfax & Roberts
Page 30 and 31: Completing my Diploma in Gemmology
Page 32 and 33: CELEBRATING Local Talent LUCAS BLAC
Page 34 and 35: Proudly distributed by (02) 9417 01
Page 36 and 37: BACKGROUND STATE OF THE INDUSTRY RE
Page 38 and 39: STATE OF THE INDUSTRY | Chains thro
Page 46 and 47: STATE OF THE INDUSTRY Brand-Only St
Page 50 and 51: Swarovski is also interesting. Of t
Page 52 and 53: STATE OF THE INDUSTRY Buying Groups
Page 54 and 55: STATE OF THE INDUSTRY | Buying Grou
Page 56 and 57: STATE OF THE INDUSTRY | Buying Grou
Page 58 and 59: BUSINESS Strategy Survival lessons
Page 60 and 61: BUSINESS Selling Six simple and eff
Page 62 and 63: BUSINESS Marketing & PR How to eval
Page 64 and 65: My Bench Leon Raper Australian Diam
Page 66 and 67: OPINION Soapbox There are many e-co
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