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2024 State of the Industry Report

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<strong>State</strong> <strong>of</strong> <strong>the</strong><br />

<strong>Industry</strong><br />

<strong>Report</strong><br />

A PANORAMIC VIEW OF THE<br />

AUSTRALIAN JEWELLERY INDUSTRY<br />

Facts, Figures,<br />

Fallacies & <strong>the</strong> Future<br />

Things you wish you had known about <strong>the</strong> Australian jewellery<br />

industry, things you thought you knew but are wrong, things<br />

that you did know about <strong>the</strong> industry but have changed, and<br />

things you could never have known about <strong>the</strong> industry.


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CONTENTS<br />

<strong>2024</strong> STATE OF THE<br />

INDUSTRY REPORT<br />

13<br />

FROM THE PUBLISHER<br />

You'll never understand<br />

<strong>the</strong> universe if you only<br />

study one planet<br />

15<br />

EDITORIAL<br />

Be interested,<br />

be curious, and hear<br />

what's not being said<br />

16<br />

AT A GLANCE<br />

Mapping it out:<br />

Understand <strong>the</strong><br />

big picture<br />

25<br />

SYNOPSIS<br />

Your questions answered:<br />

what will you learn<br />

from this study<br />

INDEPENDENT JEWELLERS<br />

Still prospering despite a decline 27<br />

BUYING GROUPS<br />

Musical chairs 39<br />

CHAIN STORES<br />

Full steam ahead despite an adverse economy 47<br />

FASHION CHAIN STORES<br />

Rapid rise and dramatic demise<br />

52<br />

BRAND ONLY STORES<br />

From an experiment to a powerhouse 57<br />

BIRTHS, DEATHS, & MARRIAGES<br />

Good night and good luck 63<br />

SHOPPING CENTRES<br />

Frontline in <strong>the</strong> retail war 67<br />

JAA<br />

How is <strong>the</strong> 'industry leader' stacking up?<br />

73<br />

SURVEY EXPLAINER<br />

Hear what <strong>the</strong> industry has to say 77<br />

CRYSTAL BALL<br />

2030: What does <strong>the</strong> future hold? 80<br />

PROVENANCE<br />

Who really cares about pro<strong>of</strong> <strong>of</strong> origin? 84<br />

VOICE OF THE AUSTRALIAN JEWELLERY INDUSTRY<br />

Published by Befindan Media Pty Ltd | ABN 66 638 077 648<br />

Locked Bag 26, South Melbourne, VIC 3205 AUSTRALIA<br />

Subscriptions & Enquiries: info@jewellermagazine.com<br />

Phone: +61 3 9696 7200<br />

Publisher Angela Han angela.han@jewellermagazine.com<br />

Editor Samuel Ord samuel.ord@jewellermagazine.com<br />

Research Assistant Riza Ortiz riza@jewellermagazine.com<br />

Production Coordinator Learoy Bangis art@befindanmedia.com<br />

Advertising Toli Podolak toli.podolak@jewellermagazine.com<br />

Accounts Paul Blewitt finance@befindanmedia.com<br />

Copyright All material appearing in Jeweller is subject to copyright.<br />

Reproduction in whole or in part is strictly forbidden without prior written<br />

consent <strong>of</strong> <strong>the</strong> publisher.<br />

Disclaimer Please note that this study is produced from a consumer’s<br />

perspective. That is, what a member <strong>of</strong> <strong>the</strong> public would reasonably consider<br />

a ‘jewellery store’, which we have defined on page 16. On this basis, <strong>the</strong><br />

information was accurate at <strong>the</strong> time <strong>of</strong> publication, noting that a new<br />

store can open ‘tomorrow’ or one can close. Despite <strong>the</strong> best efforts <strong>of</strong> our<br />

researchers, store counts and o<strong>the</strong>r information provided in this report<br />

may occasionally differ from our definitions and/or contain omissions. We<br />

cannot guarantee <strong>the</strong> accuracy or completeness <strong>of</strong> this information, given<br />

<strong>the</strong> nature and scale <strong>of</strong> this project, and we reserve <strong>the</strong> right to correct<br />

errors, inaccuracies, and/or omissions. Additionally, please note that <strong>the</strong><br />

industry is constantly evolving and/or changing and <strong>the</strong>refore, <strong>the</strong> way <strong>the</strong><br />

industry reports <strong>the</strong> changes or trends must also evolve. For that reason, <strong>the</strong><br />

definitions used in this report aim to make better sense <strong>of</strong> <strong>the</strong> data presented<br />

and nothing more.


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FROM THE PUBLISHER'S DESK<br />

You'll never understand <strong>the</strong> universe<br />

if you only study one planet<br />

More <strong>of</strong>ten than not, <strong>the</strong> questions are complicated, but <strong>the</strong> answers are simple.<br />

Publisher ANGELA HAN reflects on <strong>the</strong> creation <strong>of</strong> <strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong>.<br />

f you don’t know where you came<br />

from, <strong>the</strong>n you don’t know where you<br />

Iare. If you don’t know where you are, <strong>the</strong>n<br />

you don’t know where you’re going.<br />

And if you don’t know where you’re going –<br />

you’re probably lost!<br />

You’re holding <strong>the</strong> <strong>2024</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong><br />

<strong>Report</strong> (SOIR), <strong>the</strong> most extensive study <strong>of</strong> <strong>the</strong><br />

Australian jewellery industry to date. For a start,<br />

it records 3,501 jewellery stores, a significant<br />

decrease since <strong>the</strong> first report in 2010.<br />

It also delves into <strong>the</strong> many reasons for <strong>the</strong><br />

reduction – some insights will put you at ease,<br />

while o<strong>the</strong>rs may ring alarm bells.<br />

To <strong>the</strong> average consumer, our industry may<br />

appear straightforward and as simple as<br />

any o<strong>the</strong>r retail industry; however, insiders<br />

understand that it’s complex and challenging.<br />

With that in mind, this issue <strong>of</strong> Jeweller is a<br />

meticulous examination <strong>of</strong> <strong>the</strong> many crucial<br />

categories within <strong>the</strong> industry, addressing<br />

everything from independent stores, fine and<br />

fashion chains, brand-only stores, buying<br />

groups, and industry associations.<br />

Because <strong>of</strong> <strong>the</strong> many complexities and ‘grey’<br />

areas, chances are <strong>the</strong> data is not flawless; a<br />

store could open or close <strong>the</strong> day after we end<br />

<strong>the</strong> data collection.<br />

However, after a painstaking six-month<br />

process, I’m confident it’s as accurate as<br />

anyone could hope to be when assessing a<br />

constantly changing and evolving industry.<br />

The purpose <strong>of</strong> this report is two-fold – it’s a<br />

historical document <strong>of</strong>fering an in-depth look<br />

at <strong>the</strong> state <strong>of</strong> <strong>the</strong> industry, and a glimpse <strong>of</strong><br />

<strong>the</strong> future.<br />

With that said, what did we learn?<br />

Check <strong>the</strong> pulse, stat!<br />

Firstly, <strong>the</strong> objective <strong>of</strong> <strong>the</strong> SOIR is to establish<br />

how many jewellery stores operate in Australia<br />

and compare and contrast this information with<br />

data from <strong>the</strong> previous report in 2010, as a way<br />

to develop an understanding about what <strong>the</strong><br />

future might hold.<br />

It’s a measurement <strong>of</strong> jewellery store counts;<br />

however, ultimately, this is a quantitative<br />

assessment. While store counts tell us a small<br />

part about <strong>the</strong> ‘health’ <strong>of</strong> <strong>the</strong> industry; it’s only<br />

one component <strong>of</strong> a much larger picture.<br />

After all, if jewellery stores are in decline,<br />

surely it would suggest <strong>the</strong> industry is<br />

suffering?<br />

Quite <strong>the</strong> contrary!<br />

It's arguable that in measuring a retail<br />

category's health, revenue matters most, not<br />

store count. Deeper consideration reveals that<br />

it’s even more complex than that.<br />

In 2010, Jeweller recorded 4,225 jewellery<br />

stores in Australia, while as <strong>of</strong> November 2023,<br />

we recorded 3,501.<br />

That’s a decline <strong>of</strong> around 700 stores in 13<br />

years; however, should this decrease be<br />

worrisome for <strong>the</strong> industry at large?<br />

Well, <strong>the</strong> fact is <strong>the</strong>re were more than 700<br />

closures, and possibly as many as 1,000;<br />

however, many new stores opened during <strong>the</strong><br />

same period. The 700 is ‘net’.<br />

It should also be noted we have re-defined<br />

a ‘jewellery store’, as explained on Page 27,<br />

which caused a higher reduction. Some <strong>of</strong><br />

<strong>the</strong>se businesses still operate today but are no<br />

longer defined as jewellery stores.<br />

With that said, even if <strong>the</strong> ‘real’ reduction is<br />

<strong>the</strong> decrease <strong>of</strong> around 500 stores - whe<strong>the</strong>r<br />

because <strong>of</strong> retirements, lack <strong>of</strong> pr<strong>of</strong>itability,<br />

end <strong>of</strong> leases or even <strong>the</strong> pandemic - does this<br />

indicate an ‘unhealthy’ industry?<br />

What if <strong>the</strong> remaining 3,500 stores are<br />

enjoying improved sales because <strong>of</strong> decreased<br />

competition?<br />

For example, logic dictates that if consumer<br />

spending is not in decline, it means <strong>the</strong>re is<br />

more money for fewer stores, right?<br />

If a greater percentage <strong>of</strong> <strong>the</strong> industry achieves<br />

improved sales, is it not an argument for a<br />

healthy industry?<br />

However, any business person will tell you<br />

that an increase in revenue does not mean<br />

increased pr<strong>of</strong>it. The responsibility for a<br />

business’s pr<strong>of</strong>itability rests with <strong>the</strong> owner.<br />

Searching for answers?<br />

It’s a timely reminder that everything is a<br />

matter <strong>of</strong> perspective, including store closures.<br />

For <strong>the</strong> jeweller who closed <strong>the</strong>ir business<br />

because <strong>of</strong> <strong>the</strong> pandemic, it was a time <strong>of</strong><br />

anguish, frustration and maybe failure.<br />

Conversely, for <strong>the</strong> bench jeweller who lost<br />

<strong>the</strong>ir job, it could inspire <strong>the</strong>m to start a small<br />

business and launch <strong>the</strong>ir first jewellery<br />

collection; <strong>the</strong> pandemic forced <strong>the</strong>ir long-held<br />

aspiration!<br />

It has been said that your perspective is your<br />

prison or your passport. The choice is yours!<br />

WORDS TO LIVE BY<br />

"To lead people,<br />

walk behind <strong>the</strong>m."<br />

And <strong>the</strong> only way to make sense <strong>of</strong> change is to<br />

embrace it, move with it, and join <strong>the</strong> dance.<br />

This study attempts to explain <strong>the</strong> changes - or<br />

evolution - over <strong>the</strong> past 13 years. Why and how<br />

did <strong>the</strong> differences and/or trends come about?<br />

What is <strong>the</strong> result?<br />

It is warts and all; it pulls no punches; however,<br />

every table, every statistic and every word is<br />

designed to allow <strong>the</strong> reader to draw <strong>the</strong>ir<br />

conclusions and, perhaps, apply some <strong>of</strong> <strong>the</strong><br />

knowledge to <strong>the</strong>ir business.<br />

It doesn't aim to <strong>of</strong>fer solutions, only pathways<br />

towards <strong>the</strong>m. Each reader can interpret <strong>the</strong><br />

same data differently; <strong>the</strong>refore, it is up to you<br />

to assess whe<strong>the</strong>r <strong>the</strong> decline in store counts<br />

is a 'positive'or 'negative' for your business, as<br />

opposed to <strong>the</strong> broader industry.<br />

Show me <strong>the</strong> money!<br />

With that said, and for those hoping to<br />

learn more about <strong>the</strong> ‘health’ <strong>of</strong> <strong>the</strong> Australian<br />

jewellery industry in terms <strong>of</strong> revenue – <strong>the</strong>re’s<br />

more to come.<br />

For <strong>the</strong> first time, Jeweller is undertaking a<br />

new project - an equally comprehensive and<br />

exhaustive study - to answer <strong>the</strong> all-important<br />

‘money’ question.<br />

The project aims to provide a detailed analysis<br />

using a formulaic calculation <strong>of</strong> <strong>the</strong> annual retail<br />

turnover for <strong>the</strong> entire industry.<br />

This data will be fur<strong>the</strong>r divided into <strong>the</strong><br />

average turnover for <strong>the</strong> categories detailed in<br />

this report – from <strong>the</strong> independent jewellery<br />

stores to <strong>the</strong> fine and fashion jewellery chain<br />

stores, large and small.<br />

The research will also examine and estimate<br />

average category breakdowns – from gold, silver<br />

and diamond jewellery to watches and repairs.<br />

Only <strong>the</strong>n will we be able to begin to assess and<br />

record <strong>the</strong> health <strong>of</strong> <strong>the</strong> Australian jewellery<br />

industry.<br />

The 'money report' should make for a<br />

fascinating read, and when paired with this<br />

<strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong>, could finally<br />

answer <strong>the</strong> vital question: Is <strong>the</strong> Australian<br />

jewellery industry healthy?<br />

Stay tuned!<br />

ANGELA HAN<br />

PUBLISHER<br />

<strong>2024</strong> STATE OF THE INDUSTRY REPORT | 13


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FROM THE EDITOR'S DESK<br />

Listen to what is not said,<br />

for <strong>the</strong>re, <strong>the</strong> true story lies<br />

Editor SAMUEL ORD explains some <strong>of</strong> <strong>the</strong> behind-<strong>the</strong>-scenes work that went into<br />

this study and discusses expectations and reality.<br />

O<br />

n <strong>the</strong> first day I joined Jeweller,<br />

my publisher told me to leave my<br />

expectations about <strong>the</strong> industry<br />

at <strong>the</strong> door. She said that it was an industry<br />

you could spend a lifetime studying and still<br />

retire feeling clueless.<br />

She was right! In two short years, I’ve learned<br />

a great deal. At <strong>the</strong> time, I assumed she was<br />

referring to <strong>the</strong> intricacies <strong>of</strong> gemmology, <strong>the</strong><br />

complexities <strong>of</strong> retail trade, or perhaps <strong>the</strong><br />

precarious relationship between media and<br />

business.<br />

What I realise now – having completed <strong>the</strong><br />

<strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong> – is that <strong>the</strong><br />

advice was also about human nature.<br />

Philosopher Alan Watts once described <strong>the</strong><br />

hypnotic ‘illusion <strong>of</strong> time’. He believes <strong>the</strong> way we<br />

view things - <strong>the</strong> present moment - is dominated<br />

by our obsession with a causative past.<br />

Indeed, even at <strong>the</strong> best <strong>of</strong> times, how <strong>of</strong>ten<br />

do we find ourselves preoccupied with<br />

<strong>the</strong> painful memories <strong>of</strong> yesterday and<br />

apprehensive expectations for tomorrow?<br />

Watts says that living life in this manner<br />

– which most people do – leaves you<br />

fundamentally ‘out <strong>of</strong> touch with reality’.<br />

The past cannot be changed; however, it<br />

can help determine <strong>the</strong> future.<br />

The focus <strong>of</strong> this <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong><br />

(SOIR) is on reality, to analyse <strong>the</strong> ‘present<br />

moment’; a study <strong>of</strong> <strong>the</strong> jewellery industry<br />

as it is today.<br />

Pleasant surprises<br />

What I didn’t understand about <strong>the</strong> friendly<br />

advice was that it also related to <strong>the</strong><br />

expectations <strong>of</strong> people and organisations.<br />

Before joining Jeweller, I worked as a<br />

newspaper journalist, covering two specific<br />

rounds – sport and court.<br />

Contrary to popular opinion, athletes are<br />

reluctant interviewees at <strong>the</strong> best <strong>of</strong> times,<br />

while <strong>the</strong> legal system is even worse – <strong>the</strong><br />

police, magistrates, lawyers – few are eager<br />

to stand in front <strong>of</strong> a microphone.<br />

What I never expected was <strong>the</strong> number<br />

<strong>of</strong> people who pride <strong>the</strong>mselves on <strong>the</strong>ir<br />

ever-expanding expertise on any given topic –<br />

whe<strong>the</strong>r it be diamonds, gemstones, precious<br />

metals, or <strong>the</strong> intricacies <strong>of</strong> supply and retail.<br />

Their knowledge astounds me, as does <strong>the</strong>ir<br />

willingness to assist in my ‘education’ <strong>of</strong> <strong>the</strong><br />

wider industry.<br />

Every 15-minute conversation with someone<br />

about one story inevitably leads to ideas for<br />

half a dozen more – whe<strong>the</strong>r it be a new<br />

approach to a long-debated topic or pr<strong>of</strong>ound<br />

insight into an unexplored area.<br />

I mention this because many <strong>of</strong> <strong>the</strong>se people<br />

have played a vital role in <strong>the</strong> construction <strong>of</strong><br />

this comprehensive report, and for <strong>the</strong>ir time,<br />

I’m grateful.<br />

With that said most people do not realise<br />

that, for a journalist, a story <strong>of</strong>ten begins<br />

with what’s not being said.<br />

Bitter disappointment<br />

As a reporter, <strong>the</strong> search for <strong>the</strong> deeper truth<br />

begins when you disregard what you’re being<br />

told and start paying attention to what is<br />

being avoided or not being said - as this study<br />

uncovers.<br />

Returning to <strong>the</strong> nature <strong>of</strong> expectations,<br />

while I didn’t anticipate that so many people<br />

would freely <strong>of</strong>fer <strong>the</strong>ir time to help me<br />

better understand <strong>the</strong> industry, I’ve also been<br />

shocked by those who have rejected <strong>the</strong><br />

opportunity to contribute to <strong>the</strong> report.<br />

As an example, consider <strong>the</strong> Jewellers<br />

Association <strong>of</strong> Australia (JAA) – an organisation<br />

that claims it’s on a mission to ‘advance and<br />

represent <strong>the</strong> industry from manufacturing,<br />

wholesaling and distribution to retail’.<br />

The JAA claims to be <strong>the</strong> peak industry body<br />

- <strong>the</strong> industry leader - and it could be argued<br />

that <strong>the</strong> onus <strong>of</strong> producing a study such as this<br />

should be <strong>the</strong> responsibility <strong>of</strong> JAA.<br />

At <strong>the</strong> very least, you would think <strong>the</strong><br />

association would assist in every way possible.<br />

Well, that was my (reasonable) assumption.<br />

After all, <strong>the</strong> project benefits <strong>the</strong> industry. If<br />

only I had listened to my publisher’s advice<br />

about ‘expectations’!<br />

I contacted <strong>the</strong> JAA on 1 September about<br />

two simple figures: <strong>the</strong> number <strong>of</strong> retailer<br />

and supplier members.<br />

After a week without a reply, <strong>the</strong> request was<br />

resubmitted, which resulted in a response<br />

from <strong>the</strong> JAA’s operation manager, who<br />

said she had been unable to reply due to<br />

'‘numerous conflicting priorities in <strong>the</strong><br />

previous months”.<br />

She said she would endeavour to “look at <strong>the</strong>m"<br />

- <strong>the</strong> two figures - "sometime next week". As I<br />

write this in November, three months after <strong>the</strong><br />

first request, <strong>the</strong> JAA has been unable to provide<br />

a membership number.<br />

WORDS TO LIVE BY<br />

"No valid plans for <strong>the</strong><br />

future can be made<br />

by those who have no<br />

capacity for living now."<br />

Compare this experience with my exchanges with<br />

o<strong>the</strong>r organisations. For example, James Pascoe<br />

Group – with 460 stores across three different<br />

retail chains – provided a comprehensive state-bystate<br />

count within 24 hours.<br />

It’s worth noting that <strong>the</strong> James Pascoe Group<br />

has more stores than <strong>the</strong> JAA has members.<br />

The same could be said for Nationwide Jewellers<br />

– Australia’s largest jewellery buying group –<br />

which also quickly provided detailed information.<br />

In fact, <strong>the</strong>re’s no need to single out Nationwide.<br />

Showcase Jewellers and Independent Jewellers<br />

Collective also returned information post-haste,<br />

as did Pandora, <strong>the</strong> world’s largest massmarket<br />

jewellery brand.<br />

Now consider this - <strong>the</strong> entire purpose <strong>of</strong> <strong>the</strong><br />

JAA is to attract members.<br />

Its website states: “We endeavour to demonstrate<br />

leadership through our respectful and thoughtful<br />

communications and actions”. Note that <strong>the</strong> bold<br />

‘leadership’ is <strong>the</strong> JAA’s emphasis, not mine.<br />

As you will discover, <strong>the</strong>re are many o<strong>the</strong>r<br />

examples <strong>of</strong> <strong>the</strong> JAA's failures over <strong>the</strong> past<br />

decade, and our industry survey appears<br />

to reflect this sentiment, even from its own<br />

members!<br />

If <strong>the</strong> so-called peak industry body cannot lead<br />

through actions, <strong>the</strong>n one must ask: does it<br />

have any right to claim it represents all sectors<br />

<strong>of</strong> <strong>the</strong> industry, let alone any part <strong>of</strong> it?<br />

I didn’t expect to encounter this degree <strong>of</strong><br />

unpr<strong>of</strong>essional management and shocking<br />

communication while preparing such a valuable<br />

report; however, based on <strong>the</strong> retailer responses<br />

to <strong>the</strong> industry survey, it appears many would.<br />

Perhaps <strong>the</strong>re’s truth in that adage – it’s better<br />

to set your expectations low so that you’ll be<br />

pleasantly surprised ra<strong>the</strong>r than constantly<br />

disappointed.<br />

With that said, why dwell on <strong>the</strong> negative?<br />

Let’s instead focus on <strong>the</strong> present moment –<br />

<strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong> you’re<br />

holding is packed with detailed and valuable<br />

information, and to all those who helped make<br />

it possible – you have my utmost gratitude.<br />

SAMUEL ORD<br />

EDITOR<br />

<strong>2024</strong> STATE OF THE INDUSTRY REPORT | 15


Definitions<br />

JEWELLERY RETAILER<br />

Any business where <strong>the</strong> selling <strong>of</strong> fine or fashion jewellery<br />

and/or watches to consumers is <strong>the</strong> predominant revenue<br />

<strong>of</strong> <strong>the</strong> business.<br />

INDEPENDENT JEWELLER<br />

A jewellery business that is not part <strong>of</strong> a chain. More <strong>of</strong>ten<br />

than not, <strong>the</strong>se businesses operate from a single store.<br />

These stores are <strong>of</strong>ten ‘family-owned’ businesses.<br />

JEWELLERY STORE<br />

A retail premises is a physical place, not including any area<br />

intended for use as a residence, and is usually located on<br />

<strong>the</strong> high street or in a shopping centre that, under <strong>the</strong> terms<br />

<strong>of</strong> <strong>the</strong> lease, is used wholly or predominantly for <strong>the</strong> sale <strong>of</strong><br />

jewellery and watches to consumers.<br />

The business must be readily available to visit by <strong>the</strong> public<br />

during business hours (no appointment is necessary) and<br />

must carry stock readily available for purchase when a<br />

customer visits; that is, <strong>the</strong> item does not subsequently<br />

need to be made/manufactured.<br />

SUPPLIER<br />

A business that sells predominantly fine or fashion jewellery<br />

and/or watches to jewellery retailers who <strong>the</strong>n sell <strong>the</strong><br />

product to consumers.<br />

RETAILER- NO STOREFRONT<br />

A business that sells jewellery and/or watches to consumers<br />

and does not operate from a jewellery store (see above).<br />

These include jewellery designers and manufacturing (bench)<br />

jewellers operating from pr<strong>of</strong>essional workshops or studios<br />

(can be home-based) - <strong>of</strong>ten in CBD-located buildings - and<br />

which can be visited by <strong>the</strong> public, including by appointment.<br />

Typically, <strong>the</strong>se businesses do not carry stock and <strong>of</strong>ten deal<br />

in niche markets and custom-made products. For this report,<br />

<strong>the</strong>se are not considered “jewellery stores”.<br />

Nor<strong>the</strong>rn Territory<br />

STATE POPULATION 251,700<br />

NATIONAL POPULATION % 1%<br />

INDEPENDENT STORES 14<br />

FINE CHAIN STORES 12<br />

FASHION CHAIN STORES 2<br />

BRAND ONLY STORES 1<br />

STATE TOTAL 29<br />

SINCE 2010 -10<br />

Western Australia<br />

STATE POPULATION 2,855,600<br />

NATIONAL POPULATION % 11%<br />

INDEPENDENT STORES 187<br />

FINE CHAIN STORES 137<br />

FASHION CHAIN STORES 25<br />

BRAND ONLY STORES 22<br />

STATE TOTAL 371<br />

SINCE 2010 -61<br />

SHOWROOM<br />

A business that promotes itself as a ‘showroom’ in CBD<br />

locations similar to Retailer - no storefront; however, it<br />

does not have an onsite workshop or studio.<br />

Usually, a showroom business will not employ manufacturing<br />

(bench) jewellers and will have only sales staff. A showroom<br />

can also operate ‘virtually’ - under a serviced <strong>of</strong>fice<br />

arrangement - without staff or stock.<br />

They can <strong>of</strong>ten be faces to print <strong>the</strong> business as being larger<br />

than it is, with showrooms in o<strong>the</strong>r capital cities. For this<br />

report, showrooms are not considered “jewellery stores”.<br />

CHAIN STORES<br />

A group <strong>of</strong> five or more fine or fashion jewellery stores<br />

trading under a single (brand) name, with one ownership<br />

entity – ei<strong>the</strong>r person or company - coordinating buying<br />

and marketing activities across <strong>the</strong> group.<br />

This could include a franchise operation. A chain store usually<br />

has central management and standardised business methods<br />

and practices. It will purchase products from local suppliers<br />

and/or import its products.<br />

BRAND-ONLY STORE<br />

One or more fine or fashion jewellery stores that market<br />

and sell its own brand <strong>of</strong> jewellery and/or watches.<br />

Usually a vertical-market operation, <strong>the</strong>se stores<br />

do not utilise local suppliers and do not distribute to<br />

third-party stockists on a large scale.<br />

Brand-only stores are <strong>of</strong>ten owned and operated by<br />

<strong>the</strong> proprietor <strong>of</strong> <strong>the</strong> brand, or <strong>the</strong>y could be<br />

operated under licence.<br />

BUYING GROUP<br />

A member-based organisation created to leverage <strong>the</strong><br />

collective purchasing power <strong>of</strong> independent jewellery<br />

retailers to obtain discounts from suppliers and provide<br />

support services in areas such as marketing, management,<br />

and accounting.<br />

3,501<br />

TOTAL NUMBER OF<br />

JEWELLERY STORES ACROSS<br />

ALL CATEGORIES IN 2023<br />

South Australia<br />

STATE POPULATION 1,844,600<br />

NATIONAL POPULATION % 7%<br />

INDEPENDENT STORES 136<br />

FINE CHAIN STORES 62<br />

FASHION CHAIN STORES 15<br />

BRAND ONLY STORES 8<br />

STATE TOTAL 221<br />

SINCE 2010 -56<br />

16 | <strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

16


AT A GLANCE<br />

Australian Jewellery<br />

<strong>Industry</strong> Landscape<br />

Australia-Wide<br />

NATIONAL POPULATION 26,468,300<br />

INDEPENDENT STORES 2,010<br />

Queensland<br />

STATE POPULATION 5,418,500<br />

NATIONAL POPULATION % 20%<br />

INDEPENDENT STORES 329<br />

FINE CHAIN STORES 238<br />

FASHION CHAIN STORES 71<br />

BRAND ONLY STORES 42<br />

FINE CHAIN STORES 987<br />

FASHION CHAIN STORES 265<br />

BRAND ONLY STORES 239<br />

NATIONAL TOTAL ALL STORES 3,501<br />

SINCE 2010 -724<br />

STATE TOTAL 680<br />

SINCE 2010 -239<br />

Australian Capital Territory<br />

STATE POPULATION 464,600<br />

New South Wales<br />

STATE POPULATION 8,294,000<br />

NATIONAL POPULATION % 31%<br />

INDEPENDENT STORES 754<br />

FINE CHAIN STORES 297<br />

FASHION CHAIN STORES 73<br />

BRAND ONLY STORES 89<br />

NATIONAL POPULATION % 2%<br />

INDEPENDENT STORES 30<br />

FINE CHAIN STORES 24<br />

FASHION CHAIN STORES 6<br />

BRAND ONLY STORES 3<br />

STATE TOTAL 63<br />

SINCE 2010 -9<br />

STATE TOTAL 1,213<br />

SINCE 2010 -204<br />

Tasmania<br />

STATE POPULATION 572,700<br />

NATIONAL POPULATION % 2%<br />

INDEPENDENT STORES 61<br />

FINE CHAIN STORES 16<br />

FASHION CHAIN STORES 2<br />

BRAND ONLY STORES 0<br />

STATE TOTAL 79<br />

SINCE 2010 -6<br />

Victoria<br />

STATE POPULATION 6,766,600<br />

NATIONAL POPULATION % 26%<br />

INDEPENDENT STORES 499<br />

FINE CHAIN STORES 201<br />

FASHION CHAIN STORES 71<br />

BRAND ONLY STORES 74<br />

STATE TOTAL 845<br />

SINCE 2010 -139<br />

FLAGSHIP STORE<br />

One or more fine or fashion jewellery stores owned and<br />

operated by <strong>the</strong> brand itself ra<strong>the</strong>r than a third party.<br />

The flagship store is not part <strong>of</strong> a vertically integrated<br />

business but embodies <strong>the</strong> ‘typical’ business model <strong>of</strong><br />

wide-scale distribution to third-party stockists.<br />

These stores usually stock <strong>the</strong> most extensive range<br />

<strong>of</strong> its merchandise and are regarded as a ‘landmark<br />

store’ or ‘<strong>the</strong> face’ <strong>of</strong> a brand. For this report, <strong>the</strong>se are<br />

now considered “Brand-only stores”.<br />

KIOSK<br />

A retail outlet usually free-standing - <strong>of</strong>ten unwalled -<br />

and semi-permanent in structure or might be a ‘cartstyle’<br />

business. These businesses operate exclusively<br />

within large retail establishments or shopping malls.<br />

ONLINE JEWELLERY RETAILER<br />

A business promoting and selling jewellery or watches<br />

to consumers via its website and/or third-party platforms<br />

such as Facebook, Instagram, Etsy, and o<strong>the</strong>r social<br />

media channels. For this report, <strong>the</strong>se are not considered<br />

“jewellery stores”.<br />

2<br />

<strong>2024</strong> STATE OF THE INDUSTRY REPORT | 17<br />

17


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18


Lab Grown Diamonds<br />

A GLIMMERING FUTURE<br />

OR HIDDEN ETHICAL DILEMMA?<br />

There’s a sweeping wave <strong>of</strong> change in <strong>the</strong> global diamond<br />

market, and it’s sparking both interest and scrutiny. Consumers<br />

are flocking to lab-grown diamonds, lauded for <strong>the</strong>ir nonmined<br />

origins and identical physical properties to <strong>the</strong>ir mined<br />

counterparts. However, a lingering question refuses to fade:<br />

What about <strong>the</strong> energy used to produce <strong>the</strong>m?


Introducing<br />

Clear Neutral<br />

In an age where every consumer choice carries weight, <strong>the</strong><br />

jewellery industry faces <strong>the</strong> essential task <strong>of</strong> aligning with ethical<br />

standards and environmental consciousness. Enter Clear Neutral.


The journey<br />

towards a truly<br />

ethical diamond<br />

doesn’t end in<br />

<strong>the</strong> lab.<br />

DENHAM HOPMAN<br />

CLEAR NEUTRAL<br />

W<br />

hile lab-grown diamonds<br />

are heralded as a modern<br />

alternative, <strong>the</strong>y also<br />

cast a shadow on environmental<br />

sustainability.<br />

Cultivating <strong>the</strong>se diamonds in a<br />

laboratory is an energy-intensive<br />

process. A single carat might consume<br />

over 200 kWh <strong>of</strong> energy, equivalent to<br />

a family’s entire weekly consumption.<br />

Indeed, lab-grown diamonds have<br />

merits such as higher accessibility,<br />

quality, and yield.<br />

But we can’t ignore <strong>the</strong> environmental<br />

costs. This complexity reveals a<br />

nuanced landscape with its own<br />

challenges, with some viewing labgrown<br />

diamonds as an ethical solution<br />

and o<strong>the</strong>rs questioning that very<br />

ethics.<br />

This has led to more interest in carbon<br />

<strong>of</strong>fsetting, which helps reduce <strong>the</strong><br />

harm diamond production can do to<br />

<strong>the</strong> environment.<br />

This approach helps build trust with<br />

buyers, showing <strong>the</strong>m that <strong>the</strong>ir<br />

jewellery purchases are responsible<br />

and not just about looking good.<br />

As sustainability gains momentum,<br />

companies like Clear Neutral are<br />

leading <strong>the</strong> way.<br />

By specialising in making lab-grown<br />

diamonds carbon neutral, Clear<br />

Neutral <strong>of</strong>fers a precise solution that<br />

integrates seamlessly with existing<br />

suppliers.<br />

Clear Neutral uses extensive research<br />

and a proprietary system to accurately<br />

assess a diamond’s carbon footprint<br />

through its growing, cutting, and<br />

polishing stages.<br />

Considering factors like stone size,<br />

country <strong>of</strong> origin, and growth type,<br />

<strong>the</strong>y <strong>of</strong>fset emissions conservatively,<br />

ensuring no negative impact is<br />

overlooked. Investments in projects<br />

such as renewable energy and<br />

waste management underline <strong>the</strong>ir<br />

commitment to ethical responsibility.<br />

“The way we see it, <strong>the</strong> journey<br />

towards a truly ethical diamond<br />

doesn’t end in <strong>the</strong> lab; it continues in<br />

<strong>the</strong> choices we make to mitigate our<br />

impact on <strong>the</strong> planet,” says Denham<br />

Hopman from Clear Neutral.<br />

“With Clear Neutral, we’re striving<br />

to make this complex process as<br />

transparent and accessible as possible


for both retailers and consumers.”<br />

The consumer market is growing<br />

increasingly discerning. Recent<br />

studies indicate that a staggering<br />

90%* <strong>of</strong> global consumers express<br />

a preference for responsibly sourced<br />

products.<br />

Moreover, 83%* are willing to dig a<br />

little deeper into <strong>the</strong>ir pockets for<br />

ethically produced merchandise.<br />

When it comes to <strong>the</strong> jewellery<br />

sector, <strong>the</strong> statistics are equally<br />

revealing.<br />

An impressive 68% <strong>of</strong> Millennial and<br />

Generation Z consumers say that<br />

sustainability concerns could be a<br />

deal-breaker in purchasing diamond<br />

jewellery, according to a recent Bain<br />

& Company survey on <strong>the</strong> global<br />

diamond industry.<br />

Embracing sustainable practices isn’t<br />

just about saving <strong>the</strong> planet; it’s good<br />

for business.<br />

A 2023 Deloitte report revealed<br />

that 72% <strong>of</strong> employees in retail<br />

organisations with leading<br />

sustainability programs are<br />

Ultimately, <strong>the</strong> journey<br />

towards ethical<br />

perfection is far from<br />

over. Clear Neutral and<br />

o<strong>the</strong>r initiatives like<br />

it <strong>of</strong>fer an incredible<br />

opportunity for <strong>the</strong><br />

jewellery industry to<br />

embrace responsible<br />

practices.<br />

committed to <strong>the</strong>ir current jobs.<br />

Buyers like Jake Goodwin also<br />

appreciate an ethically sound supply<br />

chain. “It’s more than just a gem; it’s a<br />

statement <strong>of</strong> who I am,” he says.<br />

The sentiment echoes among<br />

consumers like Ainsley Caulfield,<br />

who notes, “I love <strong>the</strong> idea <strong>of</strong> wearing<br />

a diamond that’s not only beautiful<br />

but also kinder to our planet.”<br />

Jewellers <strong>the</strong>mselves are taking notice<br />

<strong>of</strong> <strong>the</strong> growing ethical concerns.<br />

“More and more people are asking<br />

about lab-grown diamonds. They<br />

love that <strong>the</strong>y’re more sustainable,<br />

but <strong>the</strong>y’re also concerned about <strong>the</strong><br />

energy used to produce <strong>the</strong>m,” says<br />

Jordan Cullen, Managing Director <strong>of</strong><br />

Cullen Jewellery.<br />

“We need to ensure we’re addressing<br />

those concerns head-on.”<br />

Ultimately, <strong>the</strong> journey towards<br />

ethical perfection is far from over.<br />

Clear Neutral and o<strong>the</strong>r initiatives<br />

like it <strong>of</strong>fer an incredible opportunity<br />

for <strong>the</strong> jewellery industry to embrace<br />

responsible practices.<br />

The opaquely symbiotic relationship<br />

between jewellers, consumers, and<br />

<strong>the</strong> environment will continue to<br />

evolve.<br />

What seems clear, though, is that <strong>the</strong><br />

path towards ethical consumption<br />

and responsible retailing is not just a<br />

trend.<br />

It’s a necessary evolution that<br />

resonates deeply with <strong>the</strong> buyers,<br />

employees, and society at large.


Carbon Neutrality for<br />

Modern Jewellers<br />

Pricing to Fit Your Business<br />

Starting from just 2% <strong>of</strong> <strong>the</strong> diamond’s value, carbon neutrality is<br />

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but <strong>the</strong> planet will certainly recognise <strong>the</strong> difference it makes.<br />

Boost Employee Retention<br />

A commitment to ethical sourcing aligns with<br />

staff values, enhancing satisfaction and retention.<br />

Future-Pro<strong>of</strong> Your Brand<br />

Aligning with sustainability and ethics ensure that your brand stays<br />

relevant, respected, and ahead <strong>of</strong> <strong>the</strong> regulatory curve.<br />

Join <strong>the</strong> Movement<br />

Millennials and conscious buyers are demanding more. Don’t miss<br />

<strong>the</strong> opportunity to align your business with <strong>the</strong>ir values and stand out.<br />

Only Offset as You Sell. No Upfront Costs.<br />

Your investment in sustainability doesn’t have to be burdensome.<br />

Clear Neutral’s unique model allows you to <strong>of</strong>fset as you sell.<br />

No hidden fees, no initial investments – only pay for what you<br />

need, when you need it.<br />

Use Your Current Supplier<br />

Stick with your trusted suppliers. Clear Neutral works alongside<br />

your existing supply chain, providing carbon neutrality solutions<br />

without <strong>the</strong> need to switch suppliers.


Clear<br />

Neutral?<br />

It’s your Path to<br />

Sustainable Luxury<br />

Carbon Offsetting, Simplified for You<br />

Using existing identifiers, we measure <strong>the</strong> carbon footprint <strong>of</strong><br />

each lab-grown diamond through all phases: growing, cutting,<br />

and polishing. We <strong>the</strong>n <strong>of</strong>fset it by investing in environmental<br />

projects like renewable energy. This intricate task requires<br />

expertise; let us handle <strong>the</strong> complexities for you.<br />

Carbon Credits Verification<br />

Clear Neutral only purchases internationally-recognised<br />

carbon credits. They all meet <strong>the</strong> following requirements: real,<br />

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Au<strong>the</strong>nticity <strong>Report</strong>s<br />

Our physical reports provide tangible pro<strong>of</strong> <strong>of</strong> your ethical<br />

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Online and In-Store<br />

Marketing Materials Provided<br />

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info@clearneutral.org


Synopsis<br />

What will you learn from this report?<br />

To better understand <strong>the</strong> findings <strong>of</strong> <strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong>, it's important<br />

to be aware <strong>of</strong> <strong>the</strong> changes to <strong>the</strong> industry and how <strong>the</strong>y affect <strong>the</strong> methodology.<br />

3,501<br />

Number <strong>of</strong> jewellery stores<br />

in Australia as <strong>of</strong> 2023. This<br />

figure includes independent,<br />

chain, and brand-only stores.<br />

KEY FINDINGS: AT A GLANCE<br />

While <strong>the</strong>re's been a<br />

significant decline in<br />

independent jewellery stores<br />

overall, this can be explained<br />

and is not a cause for alarm.<br />

Brand-only stores have<br />

expanded significantly over<br />

<strong>the</strong> past decade, evolving<br />

from a retail experiment to<br />

an influential figure with<br />

jewellery industry.<br />

28%<br />

<strong>of</strong> Australia's total jewellery<br />

store count are fine<br />

jewellery chain stores.<br />

The objective <strong>of</strong> <strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong><br />

(SOIR) is to establish how many jewellery stores<br />

operate in Australia and compare this with data<br />

from previous reports to develop an understanding <strong>of</strong><br />

<strong>the</strong> evolution and future <strong>of</strong> <strong>the</strong> industry.<br />

Since <strong>the</strong> release <strong>of</strong> <strong>the</strong> landmark report in 2010,<br />

Jeweller has continued to monitor and measure<br />

changes in <strong>the</strong> industry over <strong>the</strong> past 13 years.<br />

This included noting expansion and contraction<br />

within specific categories and <strong>the</strong> rise and decline<br />

<strong>of</strong> industry trends.<br />

The complexities associated with compiling such<br />

a report are wide-ranging and varied. To measure<br />

something, it must first be defined, and in an industry<br />

as diverse as jewellery retail, creating objective<br />

criteria is an arduous task.<br />

Every business documented by this report sells jewellery<br />

and/or watches, including fine jewellery and fashion<br />

jewellery stores; however, unsurprisingly, many differ<br />

in minor but significant ways.<br />

To develop and collate <strong>the</strong> data in a consistent<br />

manner, creating definitions for different categories<br />

must be clear to guarantee that meaningful<br />

comparisons and insights can be measured.<br />

Since <strong>the</strong> 2010 report, <strong>the</strong> consumer market and,<br />

<strong>the</strong>refore, <strong>the</strong> industry have evolved dramatically,<br />

including how people view and define jewellery products.<br />

There are a few crucial ways this report differs from<br />

those in <strong>the</strong> past, which are important to understand.<br />

‘Flagship stores’ are no longer an important<br />

consideration in <strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong>.<br />

During <strong>the</strong> research phase, it became clear that<br />

<strong>the</strong> criteria associated with a particular store's<br />

‘flagship’ status are too unclear to be measured.<br />

Any store can be labelled <strong>the</strong> ‘flagship’ <strong>of</strong> <strong>the</strong> business;<br />

however, <strong>the</strong> nature <strong>of</strong> <strong>the</strong>se stores differs greatly from<br />

business to business and brand to brand.<br />

Indeed, many have remained true to <strong>the</strong> original<br />

definition – <strong>the</strong> largest store with <strong>the</strong> strongest<br />

marketing presence and <strong>the</strong> widest range <strong>of</strong> products.<br />

O<strong>the</strong>rs appear to be described as ‘flagship’ stores<br />

based on location alone and do not differ significantly<br />

from o<strong>the</strong>r stores.<br />

While <strong>the</strong> 2010 report attempted to identify retail<br />

kiosks separately - mainly because <strong>of</strong> <strong>the</strong> large<br />

number <strong>of</strong> franchised watch battery and repair<br />

businesses in shopping centres. Most <strong>of</strong> those no<br />

longer exist, and we now include kiosks as retail<br />

stores, or at least in <strong>the</strong> store counts.<br />

An important note impacting any comparison between<br />

2010 and 2023 data is <strong>the</strong> reclassification <strong>of</strong> Pandora<br />

from a brand-only store in 2010 to a jewellery chain.<br />

The distinction is vital because Pandora was, and<br />

remains, both a supplier to <strong>the</strong> wider jewellery<br />

market and a prominent retailer <strong>of</strong> its own brand.<br />

Brand-only stores are largely vertical market<br />

operations.<br />

See definitions on Page 16-17.<br />

Methodology<br />

The current study was undertaken by dedicated<br />

researchers updating <strong>the</strong> 2010 data by ga<strong>the</strong>ring <strong>the</strong><br />

records <strong>of</strong> all jewellery retail businesses in Australia<br />

(defined below) using various methods, including online<br />

search platforms. These records were <strong>the</strong>n compared<br />

against existing databases to identify closed and new<br />

businesses, those not previously held in <strong>the</strong> databases.<br />

Each business was identified under <strong>the</strong> categories<br />

listed over page. Then, <strong>the</strong> number <strong>of</strong> jewellery stores<br />

<strong>of</strong> each business was counted - noting that one<br />

jewellery retailer can have many jewellery stores.<br />

The data collection ended on 31 October 2023.<br />

In addition, and to complement <strong>the</strong> research undertaken<br />

for this report, Jeweller also conducted a survey <strong>of</strong><br />

retailers and suppliers. Two sets <strong>of</strong> 10 questions were<br />

provided using Survey Monkey, a digital research platform<br />

and emailed using Jeweller’s comprehensive database.<br />

The retailer survey began on 31 October 2023<br />

and ended on 17 November, with more than 200<br />

independent retailers responding. This is estimated<br />

to be around 10 per cent <strong>of</strong> <strong>the</strong> market.<br />

The supplier survey was opened on 9 November<br />

and closed on 17 November, and 51 responses were<br />

received, estimated to be between 8-10 per cent <strong>of</strong> <strong>the</strong><br />

supplier market.<br />

All <strong>the</strong> results are published on Page 77.<br />

TABLE 4: ALL CATEGORIES: 2023 TOTAL STORE COUNT<br />

Snapshot 2023 NSW VIC QLD WA SA TAS ACT NT TOTAL % 2010 Variance<br />

All Independents stores 754 499 329 187 136 61 30 14 2,010 57.4% 2,699 -689<br />

Chain stores - Fine jewellery 297 201 238 137 62 16 24 12 987 28.2% 1,019 -32<br />

Chain stores - Fashion jewellery 73 71 71 25 15 2 6 2 265 7.6% 378 -113<br />

Brand Only stores 89 74 42 22 8 - 3 1 239 6.8% 129 110<br />

Total stores 2023* 1,213 845 680 371 221 79 63 29 3,501 100% 4,225 -724<br />

Total stores 2010 1,417 984 919 432 277 85 72 39 4,225 - - -<br />

Variance -204 -139 -239 -61 -56 -6 -9 -10 -724<br />

* 2023 combined Brand only and Flagship<br />

<strong>2024</strong> STATE OF THE INDUSTRY REPORT | 25


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Independent Jewellers:<br />

Still prospering despite a decline<br />

It’s been said that one man’s misery is ano<strong>the</strong>r man’s fortune.<br />

This philosophy may serve <strong>the</strong> jewellery industry well in <strong>the</strong> wake<br />

<strong>of</strong> a significant decline in independent retailers.<br />

KEY FINDINGS: AT A GLANCE<br />

2,010<br />

Number <strong>of</strong> independent<br />

jewellery stores in Australia,<br />

a decline <strong>of</strong> 26 per cent<br />

since 2010.<br />

While <strong>the</strong> overall decline<br />

in independent jewellery<br />

stores since 2010 might be<br />

startling, it's not a cause<br />

for panic.<br />

Retirements have led to<br />

a significant decline in<br />

jewellery stores in <strong>the</strong> past<br />

decade, and this trend is<br />

expected to continue.<br />

754<br />

Number <strong>of</strong> independent<br />

jewellery stores in New South<br />

Wales - <strong>the</strong> most <strong>of</strong> any<br />

Australian state.<br />

When Jeweller first conducted <strong>the</strong> <strong>State</strong><br />

<strong>of</strong> <strong>Industry</strong> <strong>Report</strong> (SOIR) in 2010, Australia<br />

had 2,699 independent jewellery stores,<br />

consisting <strong>of</strong> retailers that sold fine and/or fashion<br />

jewellery.<br />

There were a fur<strong>the</strong>r 1,355 jewellery chain stores and<br />

a small number (153) <strong>of</strong> brand-only stores, meaning<br />

that around 4,225 stores were catering to a population<br />

<strong>of</strong> 19.72 million.<br />

At <strong>the</strong> time, if you were to ask someone whe<strong>the</strong>r <strong>the</strong><br />

number <strong>of</strong> independent jewellers would increase<br />

or decrease in <strong>the</strong> decade ahead, it’s fair to say that<br />

most people would have considered a decline more<br />

likely than not.<br />

There were, and are, many reasons why such a<br />

prediction would have been reasonable, despite <strong>the</strong><br />

fact <strong>the</strong> jewellery industry has - and continues to -<br />

sail against <strong>the</strong> winds <strong>of</strong> change that impact most<br />

o<strong>the</strong>r retail categories.<br />

You only need to consider sports, chemist, and<br />

hardware stores - to name a few - where national<br />

chains and big box retailers have overrun independent<br />

and (mostly) family-run retail businesses.<br />

It could be worse; consider operating in a category<br />

that no longer exists (video stores) or has almost<br />

disappeared (newsagents and music stores).<br />

Given this background, it is fair to assume that a<br />

decline in <strong>the</strong> number <strong>of</strong> jewellery stores was likely -<br />

if not guaranteed - but <strong>the</strong> question is: to what extent<br />

would that store count decline?<br />

There are many perfectly logical - and predictable -<br />

reasons for a slight decline, given that most jewellery<br />

stores were owned by an ageing population (primarily<br />

men) approaching retirement.<br />

And gone are <strong>the</strong> days where it was a given that <strong>the</strong><br />

children would take over <strong>the</strong> business; <strong>the</strong>refore,<br />

a percentage <strong>of</strong> store closures was predicted as<br />

‘natural attrition’.<br />

This is ‘<strong>the</strong> known knowns’, to use <strong>the</strong> term by <strong>the</strong><br />

US Secretary <strong>of</strong> Defense, Donald Rumsfeld.<br />

Fur<strong>the</strong>r, as Jeweller’s recent survey <strong>of</strong> more than<br />

200 jewellers demonstrates, retirement is still a<br />

significant issue. The accompanying chart indicates<br />

that 45 per cent <strong>of</strong> respondents intend to retire or sell<br />

<strong>the</strong>ir business in <strong>the</strong> next five years.<br />

But as you will see, some issues would also create<br />

decline, which perhaps were not as apparent 13 years<br />

ago - but now are! They were <strong>the</strong> known unknowns.<br />

And, <strong>of</strong> course, <strong>the</strong> elephant in <strong>the</strong> room must not be<br />

ignored – <strong>the</strong> unknown unknown!<br />

Not for a second would anyone in 2010 have thought<br />

<strong>the</strong> world would experience a global pandemic<br />

that would create international turmoil and almost<br />

overnight destroy business activity worldwide.<br />

So, given <strong>the</strong>se factors, what would have been<br />

considered a reasonable - and natural - decline in<br />

<strong>the</strong> number <strong>of</strong> jewellery retailers since 2010, and how<br />

would that figure be reassessed given <strong>the</strong> unexpected<br />

impact <strong>of</strong> <strong>the</strong> COVID-19 pandemic?<br />

This report cannot answer <strong>the</strong> second question;<br />

however, it’s reasonable to assume that a natural<br />

reduction in jewellery stores would have been about,<br />

or a little above, 10 per cent.<br />

Back to <strong>the</strong> future<br />

Before examining <strong>the</strong> results <strong>of</strong> Jeweller’s new<br />

study <strong>of</strong> <strong>the</strong> Australian jewellery industry, let's look<br />

at some <strong>of</strong> <strong>the</strong> observations made in 2010 to assess<br />

<strong>the</strong>ir accuracy.<br />

For a start, it was observed that <strong>the</strong> Australian<br />

jewellery industry had demonstrated a surprising<br />

resilience in <strong>the</strong> face <strong>of</strong> <strong>the</strong> 2008-2009 global financial<br />

crisis (GFC).<br />

While many o<strong>the</strong>r countries suffered an economic<br />

recession, Australia’s economy avoided a recession.<br />

However, <strong>the</strong> economy was impacted by high inflation<br />

- which led to repeated hikes in interest rates -<br />

consumer confidence was adversely affected, and<br />

discretionary spending took a knock.<br />

Does that sound a little familiar today?<br />

The 2010 report stated that, surprisingly, <strong>the</strong> country's<br />

total number <strong>of</strong> jewellery stores had remained at <strong>the</strong><br />

2007 pre-GFC level.<br />

It was noted that compared with o<strong>the</strong>r retail sectors,<br />

such as entertainment and clothing (which compete<br />

with jewellery for <strong>the</strong> consumer’s discretionary<br />

dollar), <strong>the</strong> Australian jewellery industry has been<br />

successful at insulating itself from <strong>the</strong> increasing<br />

presence <strong>of</strong> chain stores.<br />

TABLE 1: INDEPENDENT JEWELLERY STORES IN AUSTRALIA 2023<br />

Independent Stores NSW VIC QLD WA SA TAS ACT NT TOTAL 2010 Variance<br />

All fine and fashion 754 499 329 187 136 61 30 14 2,010 2,699 -689<br />

Percentage 37.51% 24.83% 16.37% 9.30% 6.77% 3.03% 1.49% 0.70% 100.00% - -25.53%<br />

Chart shows a state-by-state store counts for independent jewellery stores in Australia, with <strong>the</strong> total figure contrasted with 2010.<br />

27


This can be compared to US data showing that <strong>the</strong><br />

GFC devastated <strong>the</strong> US jewellery industry. A census by<br />

<strong>the</strong> Jewelers Board <strong>of</strong> Trade (JBT) - a not-for-pr<strong>of</strong>it,<br />

member-owned association - found that “<strong>the</strong> number<br />

<strong>of</strong> jewellery doors which closed in 2008 is estimated to<br />

be around 1,500, though some believe it was closer to<br />

2,000.”<br />

The 2010 SOIR stressed ‘retirement’ was ano<strong>the</strong>r<br />

common reason for independent jewellery store<br />

closures. Small, family businesses have always<br />

dominated jewellery retailing, and <strong>the</strong> post-war baby<br />

boomers had caused a spiral in store closures.<br />

Jeweller reported 13 years ago that if no family<br />

member is willing to take over, <strong>the</strong> only o<strong>the</strong>r option<br />

is to close <strong>the</strong> business. Succession planning is<br />

notoriously difficult for retailers.<br />

In addition, it’s challenging to sell a jewellery business<br />

as it is capital intensive – meaning a significant<br />

investment in stock and fit-out - and requires a higher<br />

degree <strong>of</strong> expertise than many o<strong>the</strong>r retail categories.<br />

Jewellery knowledge is <strong>the</strong> most basic requirement<br />

- and gemmology, jewellery designing, and<br />

manufacturing skills are desirable.<br />

Selling <strong>the</strong> business is always an option, but it is not<br />

easily sold if pr<strong>of</strong>itability is marginal. And again, this is<br />

a trend in <strong>the</strong> Western world, supported by US data.<br />

The JBT data dates to 1987, and in 2009, it was<br />

reported that every year – except three years in<br />

<strong>the</strong> early 1990s – <strong>the</strong> number <strong>of</strong> US retail jewellery<br />

businesses had declined.<br />

Our 2010 study also noted, anecdotally at least, that<br />

recessions and difficult trading conditions tend to<br />

separate <strong>the</strong> ‘wheat from <strong>the</strong> chaff’.<br />

Unsuccessful small businesses will <strong>of</strong>ten use <strong>the</strong><br />

excuse <strong>of</strong> a ‘recession’ to save face when <strong>the</strong>y<br />

announce closure ra<strong>the</strong>r than taking responsibility<br />

for <strong>the</strong>ir business failings.<br />

That is, it’s easy to make money in good times, and<br />

if you own a business that is only marginally pr<strong>of</strong>itable<br />

Only 33 per cent <strong>of</strong> independent jewellery retailers<br />

report that <strong>the</strong>ir business is pr<strong>of</strong>itable today than it<br />

was before <strong>the</strong> pandemic.<br />

when difficult trading conditions arrive - as <strong>the</strong>y indeed<br />

will - a borderline business will not survive.<br />

Hold your horses<br />

Having established several reasons why independent<br />

jewellery stores would naturally decline in number, <strong>the</strong><br />

<strong>2024</strong> study finds that <strong>the</strong>re are around 2,000 stores today.<br />

This is a loss <strong>of</strong> around 700, or 25 per cent, since 2010.<br />

Now, before anyone cries wolf, hold your horses!<br />

This reduction needs fur<strong>the</strong>r clarification because<br />

some <strong>of</strong> it can be attributed to Jeweller’s change in <strong>the</strong><br />

definition or classification <strong>of</strong> a ‘jewellery store’ caused<br />

by enormous structural shifts in <strong>the</strong> industry over <strong>the</strong><br />

past decade.<br />

The 2010 study was an attempt to measure <strong>the</strong><br />

number <strong>of</strong> stores that sell jewellery to consumers,<br />

Custom made and bespoke jewellery has become<br />

an increasingly important category for Australia's<br />

independent jewellery retailers in <strong>the</strong> past decade.<br />

and in doing so, <strong>the</strong>re was a need to define different<br />

business archetypes.<br />

These included fine and fashion jewellery, chain<br />

stores, and stores classified as brand-only and/or<br />

flagship locations. To measure anything, it must first<br />

be defined.<br />

In 2010, <strong>the</strong> definition <strong>of</strong> a jewellery retailer included<br />

businesses that were not ‘traditional stores’. For<br />

example, our data included jewellers and designers<br />

who operated from what we defined as ‘upstairs<br />

premises’ or studios and workshops.<br />

Many, if not most, <strong>of</strong> <strong>the</strong>se businesses legitimately deal<br />

with <strong>the</strong> public as customers and specialise in niche<br />

categories such as engagement, bridal jewellery, and<br />

bespoke design.<br />

Most operated from CBD locations in capital cities and<br />

were (and still are) located in <strong>the</strong> ‘jewellery buildings’<br />

such as <strong>the</strong> Century and Manchester buildings in<br />

Melbourne and <strong>the</strong> Dymocks and Trust buildings in<br />

Sydney, to name just a few.<br />

O<strong>the</strong>r capital cities have similar buildings, harking<br />

back to a period when jewellers and suppliers<br />

congregated in one location for convenience and<br />

security. A jeweller could source and purchase<br />

materials, such as diamonds and gemstones, by<br />

visiting a supplier on ano<strong>the</strong>r floor – without <strong>the</strong><br />

need to leave <strong>the</strong> building.<br />

These businesses were identified as ‘Retailer - No<br />

storefront’ and included in <strong>the</strong> store counts.<br />

Changing times<br />

CHART 2:<br />

2023 INDEPENDENTS BY STATE<br />

<strong>State</strong> # %<br />

NSW 754 37.51%<br />

VIC 499 24.83%<br />

QLD 329 16.37%<br />

WA 187 9.30%<br />

SA 136 6.77%<br />

TAS 61 3.03%<br />

ACT 30 1.49%<br />

NT 14 0.70%<br />

TOTAL 2,010 100%<br />

Chart compares independent jewellery stores<br />

state-by-state and <strong>the</strong> percentage <strong>the</strong>se stores<br />

represent within Australia's total count.<br />

While it was deemed appropriate to include <strong>the</strong>se<br />

businesses in <strong>the</strong> 2010 store counts, Jeweller has<br />

decided to exclude <strong>the</strong>m in <strong>the</strong> latest study due to<br />

changes in <strong>the</strong> industry, some <strong>of</strong> which are COVIDrelated.<br />

For example, consider <strong>the</strong> distinction between a<br />

‘storefront retailer’ on <strong>the</strong> high street and one that<br />

operated without a storefront was a little blurred in<br />

2010. In that case, you must consider what <strong>the</strong> internet<br />

has done to that blurred line 13 years later.<br />

There are o<strong>the</strong>r reasons for redefining a jewellery store<br />

- explained below - and to maintain a more accurate<br />

reading on <strong>the</strong> industry, it is more appropriate to<br />

measure ‘traditional retail stores’, which Jeweller now<br />

28


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TABLE 3: 2023 - 2010 COMPARISON<br />

Comparison NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

2010 Independents 933 634 577 242 181 65 41 26 2,699<br />

2023 Independents 754 499 329 187 136 61 30 14 2,010<br />

Variance -179 -135 -248 -55 -45 -4 -11 -12 -689<br />

% Decline -19.19% -21.29% -42.98% -22.73% -24.86% -6.15% -26.83% -46.15% -25.53%<br />

Table 3 compares independent<br />

jewellery store counts from 2010 to<br />

2023. Overall, stores have declined by<br />

26.16 per cent; however, this is easily<br />

explained. See Page 31.<br />

TABLE 4: 2023 POPULATION COMPARISON<br />

Comparison NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

All stores - fine and fashion 754 499 329 187 136 61 30 14 2,010<br />

Percentage <strong>of</strong> national 37.51% 24.83% 16.37% 9.30% 6.77% 3.03% 1.49% 0.70% 100.00%<br />

Population (March 2023) 8,294,000 6,766,600 5,418,500 2,855,600 1,844,600 572,700 464,600 251,700 26,468,300<br />

Percentage <strong>of</strong> national 31.34% 25.56% 20.47% 10.79% 6.97% 2.16% 1.76% 0.95% 100.00%<br />

Variance 6.18% -0.74% -4.10% -1.49% -0.20% 0.87% -0.26% -0.25% -<br />

Table 4 takes <strong>the</strong> 2023 store counts and<br />

shows it as a percentage <strong>of</strong> <strong>the</strong> overall<br />

total, for example, NSW has 37.51 per<br />

cent <strong>of</strong> <strong>the</strong> national store count. The<br />

population <strong>of</strong> NSW is 31.34 per cent<br />

<strong>of</strong> Australia’s total population which<br />

means its store count has a six per cent<br />

variance to <strong>the</strong> population.<br />

TABLE 5: 2010 POPULATION COMPARISON<br />

Comparison NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

All stores - fine and fashion 933 634 577 242 181 65 41 26 2,699<br />

Percentage <strong>of</strong> national 34.57% 23.49% 21.38% 8.97% 6.71% 2.41% 1.52% 0.96% 100.00%<br />

Population (March 2010) 7,221,000 5,529,400 4,498,900 2,286,100 1,640,700 507,100 357,700 228,500 22,269,400<br />

Percentage <strong>of</strong> national 32.43% 24.83% 20.20% 10.27% 7.37% 2.28% 1.61% 1.03% 100.00%<br />

Variance 2.14% -1.34% 1.18% -1.30% -0.66% 0.13% -0.09% -0.06% -<br />

Table 5 presents <strong>the</strong> same data as<br />

Table 4 except that its 2010 data,<br />

which means <strong>the</strong> 2023 store count<br />

and population percentages can<br />

be compared to <strong>the</strong> <strong>the</strong> data from<br />

13 years ago.<br />

*Census March 2023.<br />

define in accordance with government descriptions and<br />

legislation, such as Retail Lease Acts.<br />

A ‘retail premises’ is, <strong>the</strong>refore, a place, not including<br />

any area intended for use as a residence, that under<br />

<strong>the</strong> terms <strong>of</strong> <strong>the</strong> lease is used, or is to be used, wholly<br />

or predominantly for <strong>the</strong> sale or hire <strong>of</strong> goods by retail<br />

or <strong>the</strong> retail provision <strong>of</strong> services.<br />

Given that <strong>the</strong> nature <strong>of</strong> retail business has<br />

dramatically changed over <strong>the</strong> past decade - and some<br />

<strong>of</strong> <strong>the</strong> change was brought on by COVID - for <strong>the</strong> sake<br />

<strong>of</strong> an industry study, a jewellery retailer is now defined<br />

as a retail premise used wholly or predominantly for<br />

<strong>the</strong> sale <strong>of</strong> jewellery (fine and/or fashion) and watches<br />

to consumers.<br />

The business must be readily available to visit by<br />

<strong>the</strong> public during business hours (no appointment is<br />

necessary) and must carry stock readily available for<br />

purchase when a customer visits; that is, <strong>the</strong> item does<br />

not subsequently need to be made/manufactured.<br />

In o<strong>the</strong>r words, a jewellery store is located on a high<br />

street or in a shopping centre/mall (small and large)<br />

where consumers shop for something ‘<strong>of</strong>f-<strong>the</strong>-shelf’.<br />

This could include shopping for bespoke and custommade<br />

jewellery items.<br />

With that said, online retailers, jewellery studios and<br />

workshops, ‘by appointment’ designers and jewellers<br />

are no longer considered jewellery stores. Fur<strong>the</strong>r,<br />

a new post-COVID retail trend - unstaffed or virtual<br />

showrooms - are also excluded.<br />

While <strong>the</strong>re will always be shades <strong>of</strong> grey in any group<br />

<strong>of</strong> definitions, it is important to redefine <strong>the</strong> trade’s<br />

participants in line with <strong>the</strong> industry’s evolution.<br />

For this reason, some <strong>of</strong> <strong>the</strong> decline can be attributed<br />

to this reclassification and is not a reflection <strong>of</strong> store<br />

closure.<br />

Jeweller estimates that within <strong>the</strong> 689-store reduction<br />

since 2010, this reclassification accounts for between<br />

100 and 150 businesses.<br />

This study has discovered that <strong>the</strong> way many jewellers<br />

survived <strong>the</strong> COVID pandemic was to change <strong>the</strong>ir<br />

business model, which included scaling back <strong>the</strong>ir<br />

business. In some cases, <strong>the</strong> business arguably could<br />

not be considered a ‘store.’<br />

Show me <strong>the</strong> money!<br />

One <strong>of</strong> <strong>the</strong> more surprising results <strong>of</strong> <strong>the</strong> retailer<br />

survey was <strong>the</strong> number <strong>of</strong> businesses that are now<br />

more pr<strong>of</strong>itable following <strong>the</strong> global pandemic.<br />

"For this reason, some<br />

<strong>of</strong> <strong>the</strong> decline can<br />

be attributed to this<br />

reclassification and is not a<br />

reflection <strong>of</strong> store closure."<br />

When asked if <strong>the</strong>ir business is more pr<strong>of</strong>itable after<br />

COVID, 33 per cent <strong>of</strong> jewellers ‘strongly agreed’ or<br />

‘agreed’.<br />

Interestingly, <strong>the</strong> number <strong>of</strong> jewellers who ‘strongly<br />

disagreed’ or ‘disagreed’ only amounted to 38 per cent.<br />

This somewhat counterintuitive result can be<br />

attributed to storeowners taking actions to change<br />

<strong>the</strong> management and procedures <strong>of</strong> <strong>the</strong> business to<br />

increase pr<strong>of</strong>itability or, in many cases, survive,<br />

Some <strong>of</strong> this can also be attributed to consumer<br />

demand for custom-designed and manufactured<br />

jewellery, which has resulted in many changes to <strong>the</strong><br />

industry.<br />

For example, it’s generally considered that few<br />

jewellery stores carry as many diamonds or diamond<br />

jewellery in stock as <strong>the</strong>y once did and needed to,<br />

compared to a decade ago.<br />

Also, many customers will look at a ring in stock and<br />

request a change.<br />

This means a significant focus must be stock<br />

management – ensuring that sales are not lost, and<br />

excess/old stock is minimised.<br />

It is also arguable that increased pr<strong>of</strong>itability could be<br />

explained by decreased competition.<br />

For example, if a jeweller had a nearby - and less<br />

successful - competitor before COVID, such a rival<br />

would most likely compete on price.<br />

Negative economic tides, such as recession and<br />

unanticipated pandemics, will quickly knock out any<br />

marginal businesses, which means <strong>the</strong> remaining stores<br />

service a larger consumer base and market share.<br />

Indeed, recessions can be an ‘every cloud has a silver<br />

lining’ phenomenon for some, where <strong>the</strong>re is more<br />

business for fewer stores when <strong>the</strong> economy recovers.<br />

And given that <strong>the</strong> reduction in store counts can be<br />

attributed to at least two reasons - natural declines<br />

such as lease expiration and retirement and forced<br />

decline from COVID and o<strong>the</strong>r adverse economic<br />

conditions - if consumer spending remains constant,<br />

more revenue will be divided among fewer stores.<br />

The ‘unknown unknown’<br />

Undoubtedly, many jewellery store closures since<br />

2020 were because <strong>of</strong> COVID. No different to all small<br />

31


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usinesses - especially retailers - jewellers could not<br />

survive <strong>the</strong> turmoil created by <strong>the</strong> pandemic.<br />

They shuttered <strong>the</strong>ir stores, never to return. Arguably,<br />

this was done in many categories by retailers whose<br />

business pr<strong>of</strong>itability was marginal.<br />

There is also anecdotal evidence to suggest that<br />

many high street stores - including jewellers - took<br />

advantage <strong>of</strong> COVID to exit a lease that <strong>the</strong>y would<br />

o<strong>the</strong>rwise not have been able to do.<br />

With government legislation enacted to ‘protect’<br />

retailers from landlords during <strong>the</strong> pandemic –<br />

for example, The National Cabinet Mandatory Code<br />

<strong>of</strong> Conduct – SME Commercial Leasing Principles -<br />

it was unlikely that any landlord would take legal<br />

action for breaking a lease during COVID.<br />

Put ano<strong>the</strong>r way, a marginally pr<strong>of</strong>itable retailer<br />

with two to three years on a lease saw COVID as a<br />

legitimate excuse - to close <strong>the</strong> business without<br />

possible legal ramifications.<br />

Most retail leases are three to five years, so any<br />

signed in 2018 or later would have been due for<br />

renewal in 2023-<strong>2024</strong>.<br />

Many businesses struggled to survive throughout<br />

COVID; some were ‘stressed’ before <strong>the</strong> pandemic<br />

and <strong>the</strong>refore closed before <strong>the</strong> lease expired.<br />

This was different for retailers in shopping centres,<br />

where <strong>the</strong> landlords were seen to be more ruthless.<br />

A figure that stands out is <strong>the</strong> number <strong>of</strong> ‘lost’<br />

jewellery stores in Queensland - 248. It is reasonable<br />

to assume that a large number <strong>of</strong> <strong>the</strong>se were stores<br />

catering for <strong>the</strong> tourist market, especially along <strong>the</strong><br />

coastline. This market completely collapsed during<br />

COVID; <strong>the</strong>y were business that almost exclusively<br />

relied on incoming tourists.<br />

Therefore, while we cannot provide an exact figure<br />

on <strong>the</strong> number <strong>of</strong> jewellery businesses closed during<br />

COVID, <strong>the</strong>re is sufficient evidence to show that many<br />

jewellers moved online to become ‘no storefront’<br />

businesses.<br />

Jeweller can track a business that previously<br />

operated as a store and now operates online or<br />

as a no-storefront business. This became a trend<br />

because <strong>of</strong>, and enhanced by, COVID.<br />

While <strong>the</strong>y can be seen as legitimate businesses<br />

CHART 6: 2023 NATIONAL STORE<br />

COUNT - ALL CATEGORIES<br />

selling jewellery to consumers, <strong>the</strong> business model<br />

differs significantly from before <strong>the</strong> pandemic.<br />

O<strong>the</strong>r changes<br />

Category # %<br />

All Independents stores 2,010 57.41%<br />

Chain stores - Fine jewellery 987 28.19%<br />

Chain stores - Fashion jewellery 265 7.57%<br />

Brand Only stores 239 6.83%<br />

TOTAL 3,501 100%<br />

Chart shows Australia's total fine and fashion jewellery store<br />

count divided into four key categories. In 2010, independent<br />

jewellers represented 64 per cent <strong>of</strong> <strong>the</strong> market compared<br />

to 57 per cent today.<br />

There have been many o<strong>the</strong>r changes since 2010 that<br />

are worth acknowledging. Fitting into <strong>the</strong> ‘known<br />

knowns’ category is <strong>the</strong> changing nature <strong>of</strong> retailing<br />

as influenced by Australia’s evolving demographics.<br />

The previous report recognised that “coupled with an<br />

increasing need to cater to <strong>the</strong> consumer tastes <strong>of</strong><br />

growing immigrant communities, new, ethnic-targeted<br />

stores have replaced old stores that have closed.”<br />

"This was different for<br />

retailers in shopping<br />

centres, where <strong>the</strong><br />

landlords were seen to be<br />

more ruthless."<br />

This trend continues today, and one only needs to<br />

consider suburbs in major capital cities to see <strong>the</strong><br />

increase in jewellery stores catering to Asian, mainly<br />

Chinese, communities as well as Indian and Middle<br />

Eastern communities. Today, we can add African<br />

jewellery stores to that list.<br />

Ano<strong>the</strong>r self-evident change has been <strong>the</strong> massive<br />

increase in online jewellery businesses. Jeweller’s<br />

research can identify various online operations that<br />

have different foundations.<br />

People launching online jewellery businesses would<br />

have been a ‘known known’; however, traditional<br />

jewellers closing <strong>the</strong>ir physical store to move online<br />

during and post-COVID would have been ‘unknown<br />

unknown’.<br />

The research also identified many online businesses<br />

launched during COVID for various reasons, including<br />

some who admit that it was done because <strong>of</strong> <strong>the</strong> loss<br />

<strong>of</strong> employment and/or boredom.<br />

These fit within <strong>the</strong> hobbyist category, attempting to<br />

turn a personal interest into a business - perhaps a<br />

‘known unknown’.<br />

Consider factors such as <strong>the</strong> global pandemic<br />

and improved and less cost-intensive technology<br />

– including website development, e-commerce<br />

platforms, and teleconferences.<br />

This environment has enabled many sole trader-type<br />

operations where a manufacturing jeweller works<br />

from a studio/workshop or a home-based <strong>of</strong>fice to<br />

produce custom-made jewellery.<br />

This trend relates to, and is also influenced by, o<strong>the</strong>r<br />

trends identified in this research.<br />

For example, <strong>the</strong> retailer survey confirmed <strong>the</strong><br />

resurgence <strong>of</strong> bespoke and custom-made jewellery,<br />

as consumers - mainly women - search for a more<br />

personalised approach to <strong>the</strong>ir adornment.<br />

A whopping 77 per cent <strong>of</strong> responses to <strong>the</strong> retail<br />

survey said <strong>the</strong>y ‘strongly agreed’ (37.56 per cent) or<br />

‘agreed’ (39.5 per cent) that custom-made jewellery<br />

has become an important part <strong>of</strong> <strong>the</strong>ir business in<br />

<strong>the</strong> past decade.<br />

The bespoke trend and income from watch and<br />

jewellery repairs have had a larger flow-on effect.<br />

Shopping centre locations have become <strong>of</strong> decreasing<br />

importance for those who can <strong>of</strong>fer traditional<br />

manufacturing or ‘bench jewellery’ services.<br />

As independent jewellery stores have exited shopping<br />

centres - primarily driven out by increasing tenancy<br />

costs - and as consumers seek something different<br />

and more personal, <strong>the</strong>re is less need for stores to be<br />

located in <strong>the</strong> larger shopping centres because <strong>the</strong><br />

customer is happy to work with ‘destination’ jewellers<br />

when seeking jewellery <strong>of</strong> a more personal, and<br />

‘everlasting’, design.<br />

The jewellery chains primarily cater to <strong>the</strong> mass<br />

market.<br />

This delineation caused by consumers’ renewed desire<br />

Survey data suggests that <strong>the</strong> 'changing <strong>of</strong> <strong>the</strong> guard' within <strong>the</strong><br />

jewellery industry will continue for <strong>the</strong> remainder <strong>of</strong> <strong>the</strong> decade<br />

due to retirements.<br />

33


Satellite showroom show<strong>of</strong>fs<br />

A new term has gained prominence in <strong>the</strong> industry: ‘showroom’. It is<br />

increasingly used by what Jeweller previously defined as ‘retailer-no<br />

storefront’. These showroom operations are where customers must make an<br />

appointment to visit <strong>the</strong> business.<br />

A showroom has traditionally been used to describe a transaction where a<br />

customer views products and orders <strong>the</strong> items to be delivered or collected at<br />

ano<strong>the</strong>r time.<br />

It is also typically used in business-to-business transactions ra<strong>the</strong>r than<br />

consumer retailing. That is, a showroom does not normally entail a business<br />

carrying stock that a consumer purchases <strong>of</strong>f <strong>the</strong> shelf.<br />

Since 2010, Jeweller has witnessed a shift towards this model used by various<br />

jewellery businesses, which probably gained momentum because <strong>of</strong> COVID.<br />

However, this causes a problem for an industry study.<br />

These ‘showrooms’ aim to grab a slice <strong>of</strong> <strong>the</strong> rapidly increasing demand for<br />

custom-made designs without enduring <strong>the</strong> costs associated with a retail<br />

lease, <strong>the</strong> expense <strong>of</strong> displaying jewellery, or <strong>the</strong> need to hire staff. This<br />

showroom concept also added to <strong>the</strong> reasons for reclassifying <strong>the</strong> definition<br />

<strong>of</strong> a ‘jewellery store’. It should be noted that showrooms generally do not<br />

carry stock readily available to be purchased by <strong>the</strong> public and are not <strong>the</strong> sole<br />

reason for <strong>the</strong> reclassification.<br />

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There is ano<strong>the</strong>r, more important reason behind <strong>the</strong> decision. The research<br />

uncovered a new trend by some <strong>of</strong> <strong>the</strong>se ‘showroom stores’ to advertise and<br />

promote <strong>the</strong> business in a misleading or deceptive manner.<br />

In <strong>the</strong> past few years, Jeweller has observed many examples <strong>of</strong> a new business<br />

being established - or moving to - a no-storefront operation and promoting<br />

itself as having showrooms in all, or many o<strong>the</strong>r, Australian capital cities.<br />

The problem is that in many cases, <strong>the</strong>se showrooms don’t ‘exist’; <strong>the</strong>y<br />

are ei<strong>the</strong>r virtual <strong>of</strong>fices with no staff, operating from a serviced <strong>of</strong>fice<br />

arrangement, or, in some cases, images <strong>of</strong> a physical showroom that appear<br />

on <strong>the</strong> company’s website and, again, have no staff.<br />

For example, a jeweller specialising in engagement rings will promote itself<br />

as being based in Sydney or Melbourne and claim to have showrooms in o<strong>the</strong>r<br />

capital cities, such as Adelaide. The business <strong>of</strong>ten lists <strong>the</strong> phone number<br />

<strong>of</strong> its head <strong>of</strong>fice or may have a local phone number, which is redirected,<br />

unbeknownst to <strong>the</strong> customer, who thinks <strong>the</strong>y are dealing with Adelaide staff.<br />

These businesses will <strong>of</strong>fer a virtual appointment with <strong>the</strong>ir ‘highly specialised<br />

jewellers’ in <strong>the</strong> head <strong>of</strong>fice. In o<strong>the</strong>r words, <strong>the</strong> ‘interstate showroom’ is<br />

nothing but a facade.<br />

The trend is more evident post-COVID because technology has dramatically<br />

improved in <strong>the</strong> past few years, and consumers have become accustomed to not<br />

visiting stores. Indeed, many are more willing to ‘go shopping’ via Zoom meetings.<br />

These two trends were not evident in 2010, so <strong>the</strong> notion that small jewellers<br />

could have a ‘store’ in every capital city was unheard <strong>of</strong>. And it would have been<br />

unpr<strong>of</strong>itable!<br />

Indeed, <strong>the</strong> advent <strong>of</strong> unstaffed ‘satellite’ jewellery showrooms was hastened by<br />

COVID. With CBD rents crashing during COVID – and some have suggested <strong>the</strong>y<br />

will not recover to pre-COVID levels - <strong>the</strong> cost <strong>of</strong> establishing <strong>the</strong> ‘appearance’ <strong>of</strong> a<br />

jewellery showroom in o<strong>the</strong>r capital cities has become less expensive.<br />

This facade is ideal for jewellery as it is a high-margin product, at least when<br />

compared to o<strong>the</strong>r retail categories. That is, <strong>the</strong> additional monthly cost for<br />

renting a small interstate <strong>of</strong>fice, ei<strong>the</strong>r as a physical location or a serviced<br />

<strong>of</strong>fice - and in some cases deceptively presented on a website - could be far<br />

outweighed by selling one diamond ring.<br />

This causes a dilemma for such a study as this <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong>,<br />

which attempts to measure <strong>the</strong> number <strong>of</strong> jewellery stores in Australia.<br />

Yes, a consumer might contact a jewellery business operating from a<br />

‘showroom’ in Adelaide; however, <strong>the</strong> sale occurs at a ‘no storefront’ <strong>of</strong>fice in<br />

Sydney. Should <strong>the</strong> Adelaide ‘showroom’ be considered a jewellery store? We<br />

think not. Worse, as mentioned, in some cases, <strong>the</strong> showroom doesn’t even<br />

exist; it can be a phone call being redirected from a serviced <strong>of</strong>fice to ano<strong>the</strong>r<br />

city location.<br />

34


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HOLD YOUR HORSES<br />

25.53%<br />

FEWER INDEPENDENT<br />

JEWELLERY SINCE 2010.<br />

See breakout box below.<br />

22.73%<br />

FEWER INDEPENDENT<br />

JEWELLERY STORES IN<br />

WESTERN AUSTRALIA<br />

26<br />

INDEPENDENT JEWELLERY<br />

STORES IN NORTHERN<br />

TERRITORY<br />

329<br />

6.77%<br />

OF ALL INDEPENDENT<br />

JEWELLERY STORES<br />

ARE IN SOUTH AUSTRALIA<br />

INDEPENDENT<br />

JEWELLERY STORES<br />

ARE IN QUEENSLAND<br />

62%<br />

OF JEWELLERY STORES IN<br />

NSW ARE INDEPENDENT<br />

JEWELLERS<br />

2,010<br />

TOTAL NUMBER OF<br />

INDEPENDENT JEWELLERY<br />

STORES IN AUSTRALIA<br />

57.56%<br />

OF RETAIL<br />

JEWELLERS<br />

IN AUSTRALIA<br />

ARE INDEPENDENT<br />

JEWELLERS<br />

48%<br />

OF JEWELLERY BUSINESSES<br />

ARE INDEPENDENT<br />

JEWELLERS IN ACT<br />

» INDEPENDENT STORES SURVIVE AND THRIVE<br />

There was once a time when independent jewellers believed that ‘cheap Asian<br />

imports’ were destroying <strong>the</strong> market. Then <strong>the</strong>re was a time that jewellers believed<br />

chains stores were taking over <strong>the</strong> industry. This prompted Jeweller to investigate<br />

<strong>the</strong> claim - and which initiated <strong>the</strong> beginnings <strong>of</strong> <strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong><br />

<strong>Report</strong>. The two claims were proven wrong and, today, while <strong>the</strong> percentage <strong>of</strong><br />

independent stores has fallen from 64 per cent in 2010 to 57.4 per cent in 2023,<br />

part <strong>of</strong> this decline can be explained by <strong>the</strong> redefinition <strong>of</strong> a ‘jewellery store’.<br />

-4<br />

INDEPENDENT JEWELLERS<br />

IN TASMANIA SINCE 2010<br />

24.83%<br />

OF INDEPENDENT<br />

JEWELLERY STORES ARE IN<br />

VICTORIA<br />

for custom-made pieces seems to have also<br />

generated ano<strong>the</strong>r significant change to <strong>the</strong><br />

traditional ways jewellery is sold.<br />

Worthy <strong>of</strong> additional research is <strong>the</strong> trend for<br />

younger designers and bench jewellers to ‘go it<br />

alone’ by establishing a small-scale business<br />

primarily based online.<br />

They cannot or should not be considered online<br />

retailers, given that that term would suggest<br />

stock levels and consumers ordering jewellery<br />

<strong>of</strong>f-<strong>the</strong>-shelf, albeit from a warehouse-style<br />

‘shelf’ ra<strong>the</strong>r than an in-store showcase.<br />

It should come as no surprise - and would be<br />

a known known - that younger and more techsavvy<br />

people are starting <strong>the</strong>ir own business<br />

which is promoted in <strong>the</strong> digital world via various<br />

social media platforms.<br />

Again, jewellery can be unique because <strong>the</strong><br />

sparkle and luxury <strong>of</strong> <strong>the</strong> items are ideal for<br />

website, Instagram, Twitter/X and Facebook<br />

marketing.<br />

Indeed, short videos <strong>of</strong> pieces being handmade<br />

are ideal for TikTok and YouTube.<br />

This is not a new trend; it’s a return to <strong>the</strong><br />

original business model where artisans<br />

handcrafted jewellery in small workshops.<br />

IMPORTANT CLARIFICATION<br />

Hold your horses!<br />

The speed at which this has happened has most<br />

likely been enhanced due to <strong>the</strong> global pandemic,<br />

which caused job losses internationally.<br />

While<br />

Finally,<br />

a decline<br />

and as<br />

<strong>of</strong><br />

has<br />

around<br />

been<br />

700<br />

previously<br />

independent<br />

detailed,<br />

jewellery stores<br />

in<br />

since<br />

<strong>the</strong> past<br />

<strong>the</strong><br />

13<br />

pandemic,<br />

years might<br />

two<br />

sound<br />

trends<br />

alarming,<br />

have<br />

it's<br />

developed<br />

a figure that<br />

is at easily speed. explained.<br />

Firstly, The first as this an article increase has noted, in businesses <strong>the</strong> definition operating <strong>of</strong> a<br />

‘jewellery from so-called store’ has ‘showrooms’; been changed however, since 2010, in some <strong>the</strong>refore<br />

many cases, businesses <strong>the</strong>se showrooms have been reclassified are effectively and nonexistent.<br />

to a reduction See <strong>the</strong> <strong>of</strong> ‘Satellite approximately showroom 150-200 show-<strong>of</strong>fs’ stores.<br />

that has<br />

led<br />

story on Page 27.<br />

The more realistic decrease is a ‘net reduction’ <strong>of</strong><br />

around The second 500 stores. trend With is also factors worthy such <strong>of</strong> as close retirements<br />

and consideration. <strong>the</strong> impact <strong>of</strong> Jeweller’s <strong>the</strong> pandemic research on marginally has pr<strong>of</strong>itable<br />

businesses, uncovered this many was overseas-owned to be expected. online<br />

retailers doing <strong>the</strong>ir utmost to disguise<br />

Fur<strong>the</strong>rmore, it is important to note Jeweller has<br />

<strong>the</strong>mselves as Australian-based or owned.<br />

tracked around 1,000 store closures in <strong>the</strong> past<br />

13 Putting years. This aside means well-known that while international many stores online have<br />

closed jewellery since retailers, <strong>the</strong> 2010 it’s report, fair new to say stores that have consumers opened<br />

- would suggesting prefer that to <strong>the</strong> buy jewellery from a business industry is in still <strong>the</strong>ir an<br />

environment home country where that new would businesses be obligated are able to to local launch.<br />

laws.<br />

This differs from o<strong>the</strong>r comparable industries (video,<br />

sports, The research music, and has hardware discovered stores) that where many declining websites<br />

store that count appear is not local countered - using a by .au new address openings. - have<br />

no connection to Australia. Like <strong>the</strong> ‘showroom’<br />

It issue, interesting <strong>the</strong>se disguised to note that online many retailers new jewellery warrant<br />

stores fur<strong>the</strong>r are investigation.<br />

based ethnic grounds, that is catering to<br />

immigrant markets such as Chinese, Indian and African.<br />

Known knowings and <strong>the</strong> future<br />

The first and only in-depth study <strong>of</strong> <strong>the</strong><br />

Australian jewellery industry in 2010<br />

accurately predicted many trade changes<br />

in <strong>the</strong> past decade.<br />

O<strong>the</strong>r changes caused by <strong>the</strong> unexpected<br />

turmoil created by <strong>the</strong> global pandemic<br />

could not be forecast by <strong>the</strong>ir very nature.<br />

The most obvious is an increased reduction<br />

in independent jewellery stores over and<br />

above any natural decline.<br />

Like all change, <strong>the</strong> result can be seen as<br />

beneficial or detrimental. For example, one<br />

person’s perception - or misery - is based on<br />

<strong>the</strong>ir outcome, say, upon losing <strong>the</strong>ir job due<br />

to <strong>the</strong> pandemic.<br />

Having found <strong>the</strong>mselves unemployed, a young<br />

jeweller who took a gamble by establishing<br />

<strong>the</strong>ir own business - and who goes on to be<br />

very successful - will have one view while <strong>the</strong><br />

store owner approaching retirement who had to<br />

close <strong>the</strong>ir business as a result <strong>of</strong> <strong>the</strong> pandemic<br />

- ra<strong>the</strong>r than selling it - will have a different<br />

perspective.<br />

As always, and just like jewellery, beauty is<br />

in <strong>the</strong> eye <strong>of</strong> <strong>the</strong> beholder.<br />

37


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38<br />

WWW.SHOWCASEJEWELLERSBUYINGGROUP.COM


Buying Groups: Musical Chairs<br />

The nature <strong>of</strong> jewellery buying groups has changed significantly in <strong>the</strong><br />

past decade. The major issue to be confronted is:<br />

Can Australia support four?<br />

523<br />

Australian independent<br />

jewellery retailers are<br />

members <strong>of</strong> a buying group.<br />

Digital marketing and <strong>the</strong><br />

refining <strong>of</strong> a jeweller's<br />

'online presence' will<br />

be a key priority for <strong>the</strong><br />

remainder <strong>of</strong> <strong>the</strong> decade.<br />

KEY FINDINGS: AT A GLANCE<br />

Nationwide Jewellers<br />

accounts for more than<br />

57 per cent <strong>of</strong> Australia's<br />

buying group members.<br />

43%<br />

Of independent jewellery retailers<br />

surveyed believe that buying groups<br />

<strong>of</strong>fer more benefits than <strong>the</strong> Jewellers<br />

Association <strong>of</strong> Australia (JAA).<br />

For more than three decades, Australia’s<br />

independent jewellery retailers could choose<br />

membership in one <strong>of</strong> three buying groups:<br />

Nationwide, Showcase, and Leading Edge Jewellers.<br />

Traditionally, a retail buying group is a memberbased<br />

organisation created to leverage <strong>the</strong> collective<br />

purchasing power <strong>of</strong> independent stores to obtain<br />

discounts from suppliers.<br />

These groups also provide business advice and<br />

support services in areas such as marketing,<br />

management, and accounting.<br />

In 2010, <strong>the</strong> three jewellery buying groups combined<br />

to represent 860 stores, accounting for 32 per cent <strong>of</strong><br />

<strong>the</strong> independent market (2,699 stores).<br />

However, everything changed in early 2020 when<br />

<strong>the</strong> Independent Jewellers Collective (IJC) was<br />

established by Joshua Zarb – a former managing<br />

director <strong>of</strong> Leading Edge Group Jewellers (LEGJ).<br />

Independent retailers now had a fourth avenue to<br />

pursue supplier discounts and business consultancy,<br />

and <strong>the</strong> market seemingly responded positively as IJC<br />

expanded quickly.<br />

At <strong>the</strong> time, <strong>the</strong>re was concern and industry speculation<br />

about <strong>the</strong> viability and need for a fourth group.<br />

This was driven by <strong>the</strong> widespread belief that <strong>the</strong><br />

market was adequately covered by three groups<br />

TABLE 1: AUSTRALIA ONLY MEMBERSHIP<br />

All Groups 2023 2010 Variation %<br />

Nationwide 299 391 -92 -23.53%<br />

Showcase 134 190 -56 -29.47%<br />

IJC 69 - 69 -<br />

LEGJ 21 88 -67 -76.14%<br />

Total 523 669 -146 -21.82%<br />

TABLE 2: AUSTRALIA ONLY STORE COUNT<br />

All Groups 2023 2010 Variation %<br />

Nationwide 337 435 -98 -22.53%<br />

Showcase 164 274 -110 -40.15%<br />

IJC 85 - 85 -<br />

LEGJ 21 151 -130 -86.09%<br />

Total 607 860 -253 -29.42%<br />

The above tables compare 2023 membership statistics to 2010.<br />

serving a base <strong>of</strong> jewellery stores that found<br />

membership suitable. Indeed, not all retailers<br />

are suited to <strong>the</strong> philosophy <strong>of</strong> buying groups.<br />

That said, by March 2020, IJC reported that it had<br />

reached its two-year goal <strong>of</strong> 60 stores, following an<br />

influx <strong>of</strong> new memberships, and in only three years,<br />

it has expanded to 85 stores (69 members).<br />

While IJC appears to have overtaken LEGJ in size,<br />

Nationwide Jewellers remains at <strong>the</strong> top <strong>of</strong> <strong>the</strong> food<br />

chain, with 299 local members representing 337<br />

stores. However, since our 2010 study, its base has<br />

declined in members and stores by approximately<br />

22 per cent.<br />

Despite <strong>the</strong>se changes, Nationwide remains<br />

Australia’s largest buying group.<br />

Meanwhile, membership decline has also been a<br />

<strong>the</strong>me for Showcase Jewellers, which now represents<br />

134 members and 164 stores. This marks a 29 per<br />

cent decrease in members and a 40 per cent decline<br />

in stores over <strong>the</strong> past 13 years.<br />

However, when compared with a contraction <strong>of</strong> <strong>the</strong><br />

overall number <strong>of</strong> jewellery stores in Australia, this<br />

becomes a less concerning tale.<br />

That is, <strong>the</strong> current study indicates that <strong>the</strong>re are<br />

currently 2,010 independent stores in Australia, a<br />

decline <strong>of</strong> approximately 26 per cent.<br />

This means Nationwide, Showcase, and IJC account<br />

for around 29 per cent <strong>of</strong> Australia’s independent<br />

jewellers – a figure not dissimilar to that <strong>of</strong> 2010<br />

(32 per cent).<br />

“It’s always been about<br />

strength in numbers,<br />

and for independent<br />

jewellers, that’s more<br />

important now than ever.”<br />

ANTHONY ENRIQUEZ<br />

SHOWCASE JEWELLERS<br />

“I still think <strong>the</strong><br />

biggest opportunity for<br />

all stores is understanding<br />

how to leverage <strong>the</strong>ir<br />

databases properly.<br />

I think that <strong>the</strong> jewellery<br />

industry could improve on<br />

that as a whole.”<br />

JOSHUA ZARB<br />

INDEPENDENT JEWELLERS COLLECTIVE<br />

“What we are now<br />

as a business is<br />

different from what we<br />

once were, and I think<br />

we will get better as<br />

time passes.”<br />

COLIN POCKLINGTON<br />

NATIONWIDE JEWELLERS<br />

39


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40


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

BUYING GROUPS<br />

That said, <strong>the</strong> most alarming decline has been with LEGJ.<br />

When IJC was launched in 2020, <strong>the</strong>re was no doubt that<br />

<strong>the</strong> most vulnerable buying group - running <strong>the</strong> risk <strong>of</strong><br />

losing members - was LEGJ, which our study appears to<br />

confirm three years later.<br />

Indeed, LEGJ has had a staggering fall in members since<br />

<strong>the</strong> introduction <strong>of</strong> a fourth group. Worse, it appears that<br />

<strong>the</strong> buying group’s management is doing its best to avoid<br />

scrutiny on <strong>the</strong> matter - see break out box Page 45.<br />

Public perception<br />

As part <strong>of</strong> this current study, Jeweller conducted a<br />

quantitative survey <strong>of</strong> more than 200 Australian-based<br />

jewellery retailers in November 2023.<br />

The ten questions sought responses on various issues and<br />

topics, including respondent’s views <strong>of</strong> <strong>the</strong> buying groups.<br />

When asked which <strong>of</strong>fers more benefits – membership<br />

to a buying group or membership to <strong>the</strong> Jewellers<br />

Association <strong>of</strong> Australia – 43.69 per cent <strong>of</strong> respondents<br />

ei<strong>the</strong>r ‘strongly agreed’ or ‘agreed’ that <strong>the</strong> buying group<br />

was <strong>the</strong> better prospect.<br />

Only 12.63 per cent believed <strong>the</strong> JAA <strong>of</strong>fers more benefits<br />

(strongly disagreed or disagreed).<br />

This could also explain why buying group member stores<br />

outstrips <strong>the</strong> JAA’s retail members by far - 520+ compared<br />

to around 300.<br />

Interestingly, in a similar survey <strong>of</strong> jewellery industry<br />

suppliers, respondents were asked <strong>the</strong>ir views as to<br />

whe<strong>the</strong>r buying groups provide beneficial support and<br />

business advice for independent jewellers.<br />

While a smaller sample size, <strong>the</strong> result was 34.61 per cent<br />

ei<strong>the</strong>r ‘strongly agreed’ or ‘agreed’ compared to 25 per<br />

cent who ‘strongly disagreed’ or ‘disagreed.’<br />

<strong>Industry</strong> feedback<br />

It’s hard to argue that times aren’t tough for independent<br />

retailers, and recent research from <strong>the</strong> Australian<br />

Retailers Association suggests that 55 per cent <strong>of</strong> small to<br />

medium-sized retailers are concerned or uncertain about<br />

<strong>the</strong>ir financial prospects.<br />

When presented with information about <strong>the</strong> reduction<br />

in independent jewellery retailers over <strong>the</strong> past decade,<br />

Showcase Jewellers managing director Anthony Enriquez<br />

wasn’t surprised.<br />

While troubling, he suggested that this data confirmed <strong>the</strong><br />

importance <strong>of</strong> buying groups.<br />

“Sadly, I’m not surprised to hear <strong>the</strong>se figures at all. This<br />

might seem easy to say given my position; however, I think<br />

this data underlines <strong>the</strong> importance <strong>of</strong> buying groups and<br />

what we can <strong>of</strong>fer,” he tells Jeweller.<br />

“It’s true, times are tough for independents. Your shopping<br />

centre data highlights what we hear all <strong>the</strong> time –<br />

independents are facing rent increases from shopping<br />

centres that are unworkable. While major chains can<br />

negotiate from a position <strong>of</strong> strength, independents aren’t<br />

always able to.”<br />

He added: “It’s always been about strength in numbers,<br />

and for independent jewellers, that’s more important now<br />

than ever.”<br />

TABLE 3: BUYING GROUP MEMBERSHIP AND STORE COUNT IN 2023<br />

Nationwide NSW VIC QLD WA SA TAS ACT NT TOTAL NZ O<strong>the</strong>r<br />

2023 - Members 104 62 64 23 27 9 7 3 299 69 1 369<br />

2023 - Stores 117 78 71 23 27 10 8 3 337 77 5 419<br />

Showcase NSW VIC QLD WA SA TAS ACT NT TOTAL NZ O<strong>the</strong>r<br />

2023 - Members 59 27 31 4 6 6 1 - 134 18 1 153<br />

2023 - Stores 64 34 47 6 6 6 1 - 164 18 1 183<br />

IJC NSW VIC QLD WA SA TAS ACT NT TOTAL NZ O<strong>the</strong>r<br />

2023 - Members 29 9 11 7 11 1 - 1 69 1 - 70<br />

2023 - Stores 36 10 12 8 13 1 - 5 85 1 - 86<br />

Leading Edge NSW VIC QLD WA SA TAS ACT NT TOTAL NZ O<strong>the</strong>r<br />

2023 - Members 8 8 3 - 1 1 - - 21 - - 21<br />

2023 - Stores 8 9 2 - 1 1 - - 21 - - 21<br />

All Groups NSW VIC QLD WA SA TAS ACT NT TOTAL NZ O<strong>the</strong>r<br />

2023 - Members 200 106 109 34 45 17 8 4 523 18 1 542<br />

2023 - Stores 225 131 132 37 47 18 9 8 607 96 6 709<br />

GRAND<br />

TOTAL<br />

GRAND<br />

TOTAL<br />

GRAND<br />

TOTAL<br />

GRAND<br />

TOTAL<br />

GRAND<br />

TOTAL<br />

The above tables record <strong>the</strong> number <strong>of</strong> members and stores <strong>of</strong> each buying group, including overseas members. The data was<br />

accurate as at November 30, 2023.<br />

Strongly<br />

agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

disagree<br />

5.83%<br />

6.80%<br />

18.45%<br />

25.24%<br />

0% 10% 20% 30% 40% 50%<br />

More than 43 per cent <strong>of</strong> respondents believe that<br />

membership to a buying group <strong>of</strong>fers greater benefit<br />

than membership to <strong>the</strong> JAA. Interestingly, even though<br />

JAA members were over-represented in <strong>the</strong> survey, less<br />

than 10 per cent preferred <strong>the</strong> JAA.<br />

Strongly<br />

agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

disagree<br />

9.62%<br />

15.38%<br />

19.23%<br />

15.38%<br />

0% 10% 20% 30% 40% 50%<br />

<strong>Industry</strong> suppliers believe that buying groups provide<br />

beneficial support and business advice for independent<br />

jewellers (36 per cent) while 25 per cent do not.<br />

41


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

BUYING GROUPS<br />

Market Share<br />

by Members<br />

Group<br />

Market Share<br />

Nationwide 57.17%<br />

Showcase 25.62%<br />

IJC 13.19%<br />

Leading Edge 4.02%<br />

2010 VS 2023: COMPARISONS - AUSTRALIA ONLY<br />

Nationwide NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

2023 - Members 104 62 64 23 27 9 7 3 299<br />

2010 - Members 133 83 85 31 36 15 6 2 391<br />

Variance -29 -21 -21 -8 -9 -6 1 1 -92<br />

2023 - Stores 117 78 71 23 27 10 8 3 337<br />

2010 - Stores 146 95 98 33 38 15 8 2 435<br />

Variance -29 -17 -27 -10 -11 -5 - 1 -98<br />

Showcase NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

2023 - Members 59 27 31 4 6 6 1 - 134<br />

2010 - Members 72 41 48 12 7 8 1 1 190<br />

Variance -13 -14 -17 -8 -1 -2 - -1 56<br />

2023 - Stores 64 34 47 6 6 6 1 - 164<br />

2010 - Stores 94 57 81 19 8 11 3 1 274<br />

Variance -30 -23 -34 -13 -2 -5 -2 -1 -110<br />

IJC NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

2023 - Members 29 9 11 7 11 1 - 1 69<br />

2010 - Members - - - - - - - - N/A<br />

Variance - - - - - - - - -<br />

2023 - Stores 36 10 12 8 13 1 - 5 85<br />

2010 - Stores - - - - - - - - N/A<br />

Variance - - - - - - - - -<br />

Leading Edge NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

2023 - Members 8 8 4 - 1 1 - - 21<br />

2010 - Members 39 15 15 3 9 3 1 3 88<br />

Variance -31 -7 -11 -3 -8 -2 -1 -3 -67<br />

2023 - Stores 8 9 4 - 1 1 - - 21<br />

2010 - Stores 51 45 21 6 13 3 1 11 151<br />

Variance -43 -36 -17 -6 -12 -2 -1 -11 -130<br />

All Groups NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

2023 - Members 200 106 109 34 45 17 8 4 523<br />

2010 - Members 244 139 148 46 52 26 8 6 669<br />

Variance -44 -33 -39 -12 -7 -9 - -2 -146<br />

2023 - Stores 225 131 132 37 47 18 9 8 607<br />

2010 - Stores 291 197 200 58 59 29 12 14 860<br />

Variance -66 -66 -68 -21 -12 -11 -3 -6 -253<br />

A state-by-state comparison <strong>of</strong> buying group membership and store count from 2010 to 2023.<br />

When undertaking a study <strong>of</strong> this nature, it’s essential to<br />

reflect on <strong>the</strong> past and outline a vision for <strong>the</strong> future.<br />

Nationwide Jewellers managing director Colin Pocklington<br />

makes an astute observation about <strong>the</strong> state <strong>of</strong> <strong>the</strong> industry,<br />

suggesting <strong>the</strong> nature <strong>of</strong> buying groups – and what <strong>the</strong>y <strong>of</strong>fer<br />

independent retailers – has changed significantly since <strong>the</strong><br />

pandemic.<br />

“I was talking with a supplier recently, and he told me that<br />

buying groups have a clear need to evolve. Once upon a time,<br />

what we <strong>of</strong>fered was trade discounts ahead <strong>of</strong> everything else.<br />

The industry now needs support in o<strong>the</strong>r areas,” he explains.<br />

"At <strong>the</strong> time, <strong>the</strong>re was<br />

concern and industry<br />

speculation about <strong>the</strong><br />

viability and need for a<br />

fourth group."<br />

“Small business owners <strong>of</strong>ten don’t have training in things<br />

like marketing and business management. The way things<br />

are going, I think it’s clear that jewellery stores need to be<br />

engaged with digital marketing – now more than ever before.”<br />

Pocklington continues: “What we are now as a business is<br />

different from what we once were, and I think we will get better<br />

as time passes.”<br />

IJC’s Zarb strongly agrees with Pocklington and says that<br />

digital marketing has been one <strong>of</strong> his key focuses over <strong>the</strong><br />

three years IJC has operated.<br />

“Your social media activity should reflect <strong>the</strong> <strong>the</strong>mes <strong>of</strong> your<br />

website, which in turn should reflect your store image, which<br />

is represented by your merchandising,” Zarb says.<br />

“Those are principles I work very closely on with all our stores<br />

to ensure <strong>the</strong>y present pr<strong>of</strong>essionally across all channels.”<br />

He adds, "I still think <strong>the</strong> biggest opportunity for all stores is<br />

understanding how to leverage <strong>the</strong>ir databases properly. I think<br />

that <strong>the</strong> jewellery industry could improve on that as a whole.”<br />

During adversity, people crave forward-thinking leaders with<br />

a strong commitment to success. It doesn’t matter if we are<br />

talking about sports, business, or family life – <strong>the</strong>se traits <strong>of</strong>fer<br />

reassurance when smooth sailing becomes a distant memory.<br />

Despite <strong>the</strong> overall decline <strong>of</strong> <strong>the</strong> jewellery industry in Australia<br />

and <strong>the</strong> pessimism about future trading conditions, it should<br />

be reassuring for local retailers to know that <strong>the</strong> three major<br />

buying groups not only have a plan for today – but also a vision<br />

for tomorrow.<br />

42


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43


44


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

BUYING GROUPS<br />

Leading Edge: What goes up must come down<br />

Leading Edge Group Jewellers (LEGJ) has always been<br />

<strong>the</strong> smallest <strong>of</strong> <strong>the</strong> three buying groups, in part because<br />

it is not exclusively focused on <strong>the</strong> jewellery industry.<br />

Unlike <strong>the</strong> Nationwide and Showcase business<br />

models, which only deal with fine jewellery retailers,<br />

LEGJ is a product division <strong>of</strong> <strong>the</strong> ‘parent entity’<br />

Leading Edge Group, which has members from seven<br />

retail categories, including computers, appliances,<br />

electronics and books.<br />

When Joshua Zarb launched IJC in 2020, <strong>the</strong>re was<br />

no doubt that <strong>the</strong> most vulnerable buying group -<br />

running <strong>the</strong> risk <strong>of</strong> losing members - was LEGJ,<br />

which this study now appears to confirm.<br />

Indeed, LEGJ has managed to experience a<br />

staggering fall since <strong>the</strong> introduction <strong>of</strong> a fourth<br />

group, and it is something that its staff and<br />

management are reluctant to admit, to <strong>the</strong> extent<br />

that some in <strong>the</strong> industry query whe<strong>the</strong>r it can<br />

legitimately claim to be a buying group.<br />

Ironically, in <strong>the</strong> inaugural <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong><br />

- and under Zarb’s leadership - LEGJ generated <strong>the</strong><br />

most significant increase in membership among <strong>the</strong><br />

competing groups.<br />

LEGJ represented 88 members, accounting for 151<br />

stores in 2010, and by 2018, those figures had peaked<br />

at 135 members and 195 stores.<br />

However, since <strong>the</strong>n, it has been nothing but bad news<br />

for <strong>the</strong> smallest <strong>of</strong> <strong>the</strong> three jewellery groups; its<br />

store count has declined by nearly 90 per cent.<br />

It seems that <strong>the</strong> concerns about <strong>the</strong> viability <strong>of</strong> four<br />

buying groups competing in a relatively small and<br />

specialist market may be ringing true.<br />

The matter is not helped by LEGJ management doing<br />

its utmost to obfuscate its falling numbers and mask<br />

an almost non-existent membership base.<br />

It is believed that many members have left <strong>the</strong> group<br />

in <strong>the</strong> past few years, and <strong>the</strong> decline seems to<br />

coincide with <strong>the</strong> launch <strong>of</strong> IJC.<br />

For more than a decade, each buying group would<br />

freely volunteer its latest membership and store<br />

count for publication; however, earlier this year LEGJ<br />

began reporting figures which included something it<br />

called ‘subscribers’.<br />

LEGJ members pay a monthly buying group fee <strong>of</strong><br />

$89, whereas subscribers were meant to be stores<br />

that had purchased products from LEGJ’s wholesaling<br />

division but were not paid group members.<br />

Jeweller disapproved <strong>of</strong> this ‘subscriber’ terminology<br />

for many reasons.<br />

For example, it was akin to claiming a store that<br />

stocked Pandora jewellery or Seiko watches was a<br />

‘subscriber’ to Pandora or Seiko.<br />

These stores are simply ‘customers’ or ‘stockists’, not<br />

‘members’ or ‘subscribers’.<br />

At <strong>the</strong> time, LEGJ management claimed <strong>the</strong>y could<br />

not separate <strong>the</strong> two types <strong>of</strong> businesses to accurately<br />

reflect <strong>the</strong> paid membership to <strong>the</strong> buying group.<br />

When Jeweller contacted chief operations <strong>of</strong>ficer<br />

Charlie Davey, as part <strong>of</strong> <strong>the</strong> research for this report,<br />

TABLE 5: LEGJ MEMBERSHIP AND STORE COUNT<br />

Year Members Stores<br />

YoY Membership<br />

Movement<br />

2010 88 151 -<br />

2012 103 157 17%<br />

2014 111 163 8%<br />

2016 136 186 23%<br />

2018 135 195 -1%<br />

2020* 89 124 -34%<br />

2023 21 21 -76%<br />

Can Australia support four buyings groups? Since 2018 LEGJ<br />

membership has fallen by 84 per cent and its store count has<br />

plummeted by 89 per cent.<br />

he again claimed that <strong>the</strong> company or staff could<br />

not easily distinguish between a paid buying group<br />

member and a retailer that had purchased a product.<br />

Instead, he provided data suggesting LEGJ had<br />

70 members with 101 stores; however, when that<br />

information was questioned, he dismissed Jeweller's<br />

method <strong>of</strong> defining members as “complex”.<br />

There was no doubt that LEGJ’s membership has<br />

plummeted since 2018 despite Davey’s insistence that<br />

members and stockists fall under ‘one umbrella’.<br />

Davey was asked to rethink LEGJ’s policy and<br />

accurately and openly report its genuine paid<br />

membership numbers. Following a refusal to do so,<br />

Jeweller sought <strong>the</strong> information from o<strong>the</strong>r sources.<br />

Based on a recent membership list, it appears that<br />

LEGJ can now only lay claim to 21 members and 21<br />

stores. The list included o<strong>the</strong>r businesses that cannot<br />

be classified as jewellery retailers in accordance with<br />

this report's definitions.<br />

Jeweller presented <strong>the</strong> research to Davey for<br />

confirmation; however, he did not reply, instead<br />

directing <strong>the</strong> email to CEO Lee Scott.<br />

If <strong>the</strong> data is accurate, LEGJ’s motivation for<br />

obfuscation concerning its membership decline is<br />

obvious; it has plummeted by 84 per cent since 2018<br />

(135 to 21), and its 2018 store count has declined from<br />

195 to 21 (89 per cent).<br />

Interestingly, in an email dated 11 November, Davey<br />

was more than happy to claim that <strong>the</strong>re is a "healthy<br />

member group across <strong>the</strong> Leading Edge Business, <strong>of</strong><br />

over 400 members and growing”.<br />

This comment came despite <strong>the</strong> refusal to provide<br />

an accurate number to <strong>the</strong> jewellery arm <strong>of</strong> <strong>the</strong> LEG<br />

because it is “too complex”.<br />

O<strong>the</strong>r factors point to <strong>the</strong> decline <strong>of</strong> LEGJ’s jewellery<br />

division and buying group.<br />

For example, <strong>the</strong> Facebook page for ‘Leading<br />

Edge Group Jewellers’ has not been updated since<br />

December 2020. The last post on 23 December 2020<br />

reads: "And on <strong>the</strong> last day <strong>of</strong> Christmas, my true love<br />

said to me "Which diamond does your heart desire?"<br />

The Facebook post added: “Find your closest Leading<br />

Edge Jewellers store for last-minute Christmas<br />

shopping.”<br />

With that said, <strong>the</strong> group’s website (legj.com.au) is nonfunctional.<br />

The site appears to have been taken down.<br />

Fur<strong>the</strong>r, <strong>the</strong> store locator on <strong>the</strong> parent company’s<br />

website (leadingedgegroup.com.au/jewellery) also<br />

appears non-functional. No stores can be located.<br />

In addition to <strong>the</strong>se anomalies, o<strong>the</strong>r issues may<br />

have eroded LEGJ’s dealings and reputation in <strong>the</strong><br />

Australian jewellery market.<br />

Of note is Troy Australia, a new jewellery supply<br />

business formed in 2021 and which was headed<br />

by former Showcase Jewellers managing director<br />

Carson Webb.<br />

Webb had previously worked at LEGJ and left in 2015 to<br />

join Showcase. Following his departure from that buying<br />

group, Webb rejoined LEGJ to launch Troy Australia.<br />

The new business’ mandate was to create a “retail<br />

initiative for independent jewellery retailers <strong>of</strong>fering<br />

guidance, advice, and exclusive products to help<br />

businesses grow”, including exclusive jewellery<br />

collections, CAD, business assistance, and training.<br />

At <strong>the</strong> time, it was announced that LEGJ members<br />

would have access to Troy Australia’s jewellery<br />

ranges, which had been named a preferred supplier<br />

in late 2021.<br />

According to Australian Securities and Investments<br />

Commission records, it is <strong>the</strong> business name <strong>of</strong> ano<strong>the</strong>r<br />

entity called Australian Jewellery Warehouse with <strong>the</strong><br />

registered address <strong>of</strong> 72 Archer St, Chatswood, <strong>the</strong><br />

same address as Leading Edge Group.<br />

Australian Jewellery Warehouse was registered in<br />

May 2020, and <strong>the</strong> director and secretary are recorded<br />

as Simon Richard Lane, former Leading Edge CEO.<br />

LEGJ had appointed its own company as a preferred<br />

supplier! Then came <strong>the</strong> launch <strong>of</strong> Diamond Republic<br />

in February <strong>of</strong> this year – a jewellery supplier<br />

spearheaded by former Lane.<br />

Interestingly - and confusingly - <strong>the</strong> Troy Australia<br />

website (troyaustralia.com) is non-functioning too<br />

and, instead, diverts to <strong>the</strong> Diamond Republic website<br />

(<strong>the</strong>diamondrepublic.com.au) without explanation.<br />

Even though ASIC records indicate The Diamond<br />

Republic was first registered only 12 months ago<br />

(22 November 2022), its website claims: “We are an<br />

Australian wholesale jewellery supplier with a long<br />

and proud history <strong>of</strong> supporting jewellery retailers.<br />

We have partnered with some <strong>of</strong> <strong>the</strong> largest<br />

international suppliers and manufacturers to<br />

provide quality products at competitive prices.”<br />

It is well known that, after many years <strong>of</strong> supporting<br />

LEGJ, many industry suppliers have not been happy<br />

with LEGJ creating competing businesses while<br />

simultaneously demanding and receiving discounts.<br />

Most say that LEGJ should decide whe<strong>the</strong>r it is a<br />

jewellery buying group representing its members<br />

or a jewellery product supplier; regardless, it<br />

appears that <strong>the</strong> importance <strong>of</strong> <strong>the</strong> group as a<br />

buying collective - with only 21 members - has<br />

waned if not become redundant.<br />

45


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Chain Stores:<br />

Full steam ahead<br />

The fine jewellery chain stores have fared well over <strong>the</strong> past decade but<br />

consolidation could be on <strong>the</strong> horizon as <strong>the</strong> 'big fish' look for new customers via<br />

brand differentiation.<br />

1,252<br />

Fine and fashion jewellery<br />

chain stores in Australia as<br />

<strong>of</strong> November 2023.<br />

Scale is vital to <strong>the</strong><br />

success <strong>of</strong> jewellery chain<br />

stores. Marketing and<br />

promotional activities<br />

impact all stores equally.<br />

KEY FINDINGS: AT A GLANCE<br />

Jewellery chain stores are<br />

able to negotitate from a<br />

position <strong>of</strong> strength with<br />

shopping centre landlords.<br />

278<br />

Prouds stores in Australia as <strong>of</strong><br />

November 2023. Prouds is <strong>the</strong><br />

largest chain in <strong>the</strong> country,<br />

accounting for eight per cent<br />

<strong>of</strong> all jewellery stores.<br />

The trials and tribulations facing <strong>the</strong> general<br />

retail sector are hardly a secret. Yet, somehow,<br />

fine jewellery chain stores appear to be resistant<br />

to many <strong>of</strong> <strong>the</strong>se external pressures.<br />

The 2010 edition <strong>of</strong> <strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong><br />

(SOIR) documented <strong>the</strong> surprising resilience chain<br />

stores appeared to have in <strong>the</strong> fallout <strong>of</strong> <strong>the</strong> 2008<br />

Global Financial Crisis.<br />

Despite stiff competition for <strong>the</strong> consumer dollar, fine<br />

jewellery chains performed exceedingly well as <strong>the</strong>y<br />

consolidated considerably over three years.<br />

At <strong>the</strong> time, <strong>the</strong>re were 1,355 fine and fashion chain<br />

stores in Australia, occupying 32 per cent <strong>of</strong> <strong>the</strong><br />

overall jewellery market.<br />

Of that figure, 977 were fine jewellery chain stores,<br />

with <strong>the</strong>se figures not accounting for Pandora (41<br />

stores). There were 378 fashion chain stores.<br />

Fast forward to 2023, and <strong>the</strong> landscape has shifted<br />

dramatically.<br />

While <strong>the</strong> store count <strong>of</strong> Australia's fine and fashion<br />

jewellery chains accounts for 1,252, <strong>the</strong> makeup has<br />

changed significantly.<br />

That is, 13 years later, <strong>the</strong> fine chain store count has<br />

changed by five compared with 2010 (972) contrasted<br />

with only 265 fashion.<br />

This means that fashion chain stores hold just 21.3<br />

per cent <strong>of</strong> <strong>the</strong> market, a stark contrast to <strong>the</strong> 27 per<br />

cent share held a little more than a decade ago.<br />

While <strong>the</strong> decline <strong>of</strong> fashion chains is explained in<br />

detail on Page 46, in short, six <strong>of</strong> <strong>the</strong> seven major<br />

chains that existed in 2010 collapsed within a decade,<br />

with Lovisa <strong>the</strong> sole survivor.<br />

While Lovisa held a modest store count <strong>of</strong> 35 in 2010,<br />

that figure has expanded to 175 stores – occupying 84<br />

per cent <strong>of</strong> <strong>the</strong> total fashion chain market.<br />

"Ano<strong>the</strong>r essential matter<br />

to consider is that chain<br />

stores now dominate<br />

retail space in <strong>the</strong> major<br />

shopping centres."<br />

What is most curious about this data is that while<br />

Australia’s overall jewellery store count (fine and<br />

fashion chains, brand-only and independents) has<br />

consistently declined in <strong>the</strong> past decade (18 per cent),<br />

fine chain stores have stood tall and wea<strong>the</strong>red <strong>the</strong><br />

storm.<br />

What is it that makes <strong>the</strong>se chain stores so resilient<br />

to <strong>the</strong> kinds economic pressures that force o<strong>the</strong>r<br />

retailers to close?<br />

Papa Bear<br />

To understand <strong>the</strong> factors that have made fine<br />

jewellery stores so resistant to economic pressure,<br />

it’s worth closely examining <strong>the</strong> changes in <strong>the</strong><br />

industry’s major players on a case-by-case basis.<br />

Unsurprisingly, <strong>the</strong> James Pascoe Group (JPG)<br />

remains <strong>the</strong> dominant force in Australia. It has been<br />

relatively stable for <strong>the</strong> past decade (469 stores in<br />

2010), with a decline in Goldmark locations (63 stores<br />

from 119 stores) outweighed by a focus on Prouds<br />

(278 stores from 217 stores).<br />

Today, <strong>the</strong> New Zealand-based retailer operates<br />

460 locations, only nine less than in 2010.<br />

However, it is JPG’s recent past that is most<br />

interesting. Since 2020, and following <strong>the</strong> COVID<br />

pandemic, its Prouds stores have expanded to<br />

17 new locations (278 stores from 261 stores).<br />

At <strong>the</strong> same time, JPG’s Angus & Coote brand<br />

decreased by three stores (119 from 122), and<br />

Goldmark also declined - by 13 stores (63 stores<br />

from 76).<br />

This leaves JPG with 460 stores, an increase <strong>of</strong> one<br />

store from our pre-COVID study in 2020 (459 stores).<br />

Michael Hill International (MHI) - ano<strong>the</strong>r Kiwifounded<br />

jeweller - has been busy. Earlier this year,<br />

<strong>the</strong> company shocked <strong>the</strong> jewellery industry by<br />

acquiring Bevilles, <strong>the</strong> Victorian-based jeweller<br />

founded in 1934.<br />

MHI operated 144 stores in Australia in 2010 and, over<br />

TABLE 1: AUSTRALIAN JEWELLERY CHAIN STORE COMPARISON 2010 V 2023<br />

CHAIN STORES NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

All Chains 2010 417 305 316 167 91 20 27 12 1,355<br />

All Chains 2023 370 272 309 162 77 18 30 14 1,252<br />

Variance -47 -33 -7 -5 -14 -2 3 2 -103<br />

Chart shows a state-by-state comparison <strong>of</strong> fine and fashion jewellery store counts in 2010 and 2023. While fine jewellery chains have fared well in adverse economic climates, several fashion chains<br />

have suffered significant collapses in <strong>the</strong> past decade.<br />

47


TABLE 2: 'STILL IN BUSINESS' - COMPARISON OF FINE AND FASHION JEWELLERY CHAINS 2010 V 2023<br />

ONGOING Ownership/Group NSW VIC QLD WA SA TAS ACT NT<br />

TOTAL<br />

2023<br />

2010 Variance<br />

Angus & Coote James Pascoe Group 39 20 32 17 3 3 4 1 119 133 -14<br />

Bevilles Michael Hill International 12 14 2 - 2 - - - 30 29 1<br />

Goldmark James Pascoe Group 24 8 22 6 - - 2 1 63 119 -56<br />

Gregory Jewellers Gregory Jewellers 11 2 - - - - - - 13 16 -3<br />

Hardy Bro<strong>the</strong>rs Wallace Bishop 1 1 2 1 - - - - 5 7 -2<br />

Hoskings Hoskings - 12 - - - - - 5 17 17 -<br />

Lovisa BB Retail Capital 47 43 43 21 13 2 4 2 175 35 140<br />

Mazzucchelli's The Jewellery Group 2 7 - 11 4 - 3 - 27 25 2<br />

Michael Hill Michael Hill International 42 34 28 20 7 4 4 2 141 144 -3<br />

Pandora* Pandora 42 31 25 17 7 3 3 1 129 41 88<br />

Prouds James Pascoe Group 94 49 67 39 16 6 5 2 278 217 61<br />

Salera's Salera's - 12 5 - - - - - 17 21 -4<br />

Shiels Transworld Enterprises 5 - 16 13 16 - - - 50 31 19<br />

Wallace Bishop Wallace Bishop 6 1 31 - - - - - 38 57 -19<br />

Zamels The Jewellery Group 8 6 1 11 7 - 3 - 36 100 -64<br />

Total 333 240 274 156 75 18 28 14 1,138 992 146<br />

After <strong>the</strong> collapse <strong>of</strong> a number <strong>of</strong> chains over <strong>the</strong> past decade, this table compares fine and fashion jewellery chains that have remained in business since 2010. It shows <strong>the</strong>y have increased <strong>the</strong>ir store<br />

counts by 146. These stores, paired with <strong>the</strong> new chain stores that have emerged in <strong>the</strong> past decade, bring <strong>the</strong> total count to 1,252.<br />

TABLE 3: LOST CHAINS FROM 2010<br />

LOST NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

Anthonys* - - 7 1 - - - - 8<br />

Bijoux 11 - - - - - - - 11<br />

Blue Spirit 3 - - 3 - - - - 6<br />

Butterfly Silver 3 6 11 - - - - - 20<br />

Dia Oro* - 6 1 - - - - - 7<br />

Diva 57 40 39 20 11 4 4 1 176<br />

Equip 36 23 25 9 5 1 4 1 104<br />

Goldsmith* - 7 - - - - - 2 9<br />

Grahams* - - - 7 - - - 7<br />

Magnolia Silver 10 6 2 4 - - - - 22<br />

Myka 1 9 - - - - - - 10<br />

Pascoes* - - 9 - - - - - 9<br />

Regency * 6 - - - - - - - 6<br />

Thomas 2 7 - - - - - - 9<br />

Total 129 104 94 37 23 5 8 4 404<br />

History Lesson: Lost chains from 2010<br />

This table records chain stores from 2010 that are no<br />

longer in business or those that no longer qualify as a<br />

fine or fashion jewellery chain.<br />

Those marked with an asterisk - Anthony’s, Dia Oro,<br />

Goldsmith, Graham's, Pascoes, and Regency - have<br />

continued trading; however, <strong>the</strong>ir store counts have<br />

fallen below <strong>the</strong> required level (five stores) to be<br />

classified as a ‘jewellery chain’ to qualify as a chain.<br />

It is with noting that <strong>of</strong> <strong>the</strong> total (404) 280 fashion<br />

jewellery stores (69 per cent) were lost following <strong>the</strong><br />

collapse <strong>of</strong> Diva and Equip Accessories.<br />

Ano<strong>the</strong>r notable loss was that <strong>of</strong> Thomas Jewellers.<br />

In October 2017 it confirmed <strong>the</strong> closure <strong>of</strong> its nine<br />

stores just one month after <strong>the</strong> chain announced a<br />

renewed focus on regional locations and <strong>the</strong> roll-out<br />

<strong>of</strong> new store designs.<br />

The business had traded since 1896 when James<br />

Thomas founded his first store in Ballarat, Victoria.<br />

TABLE 4: AUSTRALIA'S NEWEST FINE AND FASHION JEWELLERY CHAINS<br />

NEW NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

Dinosaur Designs 3 2 2 - - - - - 7<br />

Colettte 19 16 16 4 2 - 1 - 58<br />

Finer Rings 1 4 - - - - - - 5<br />

Fuse Silver 3 - 2 - - - 1 - 6<br />

Mezi 5 - - - - - - - 5<br />

Mystique Jewellers - - 5 - - - - - 5<br />

Silver Shop - - 8 - - - - - 8<br />

Simon Curwood 6 4 2 2 - - - - 14<br />

Zohar - 6 - - - - - - 6<br />

Total 37 32 35 6 2 0 2 0 114<br />

New kids on <strong>the</strong> block<br />

Some <strong>of</strong> <strong>the</strong> jewellery chains shown on Table 4<br />

were not even in business when Jeweller published<br />

its first <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong> (SOIR) in 2010.<br />

Business, like nature, sees <strong>the</strong> old making way for <strong>the</strong><br />

new and <strong>the</strong>se emerging chains are a good example<br />

<strong>of</strong> this, as well as <strong>the</strong> philosophy that 'old ways won’t<br />

open new door's.<br />

Consider Simon Curwood Jewellers that began in<br />

2016 with one store and which has quickly risen to<br />

14 store stoday, compared to, say, Thomas Jewellers<br />

that closed in nine stores in 2017 after 121 years<br />

trading.<br />

48


FINE JEWELLERY CHAINS<br />

King <strong>of</strong> <strong>the</strong> Castle<br />

Chain No. %<br />

Pandora<br />

13.1%<br />

Jewellery Groups No. %<br />

Prouds 278 28.2%<br />

Michael Hill 141 14.3%<br />

Pandora 129 13.1%<br />

Michael Hill<br />

14.3%<br />

Angus & Coote<br />

12.1%<br />

James Pascoe Group 460 47.08%<br />

Michael Hill International 171 17.50%<br />

Pandora 129 13.20%<br />

Angus & Coote 119 12.1%<br />

The Jewellery Group 63 6.45%<br />

Goldmark 63 6.4%<br />

Shiels 50 5.1%<br />

Goldmark<br />

6.4%<br />

Transworld Enterprises 50 5.12%<br />

Wallace Bishop 43 4.40%<br />

Wallace Bishop 38 3.9%<br />

Zamels 36 3.6%<br />

Bevilles 30 3.0%<br />

Wallace Bishop<br />

3.9%<br />

Shiels<br />

5.1%<br />

Above: Some companies own multiple<br />

retails brands. This table shows chain store<br />

market share by ownership.<br />

Mazzucchelli's 27 2.7%<br />

Salera's 17 1.7%<br />

Hoskings 17 1.7%<br />

Simon Curwood 14 1.4%<br />

Gregory Jewellers 13 1.3%<br />

Mystique Jewellers 5 0.5%<br />

Mezi 5 0.5%<br />

Hardy Bro<strong>the</strong>rs 5 0.5%<br />

Total 987 100.0%<br />

Prouds<br />

28.2%<br />

Mazzucchelli's<br />

2.7%<br />

Salera's<br />

1.7%<br />

Zamels<br />

3.6%<br />

Bevilles<br />

3.0%<br />

The pie chart shows that Prouds continues<br />

to be Australia’s largest chain, with<br />

28.2 per cent <strong>of</strong> <strong>the</strong> market (278 stores),<br />

with its nearest rival, Michael Hill, with<br />

141 stores (14.3 per cent). In 2010 Prouds<br />

accounted for 34.6 per cent <strong>of</strong> <strong>the</strong><br />

category. It should be noted that James<br />

Pascoe Group owns three <strong>of</strong> <strong>the</strong> top five<br />

chains - Prouds, Angus & Coote, and<br />

Goldmark.<br />

<strong>the</strong> next decade, expanded that network to 156 by 2020.<br />

However, since <strong>the</strong> pandemic, that figure has decreased<br />

to 141, but by acquiring Bevilles, <strong>the</strong> group's total<br />

ownership is now 171 stores.<br />

As previously mentioned, Lovisa has evolved into a<br />

dominant market force, expanding its store network<br />

in Australia by 400 per cent in 13 years. The company<br />

has opened 35 new stores since 2020, despite <strong>the</strong><br />

impact <strong>of</strong> <strong>the</strong> pandemic.<br />

Pandora, meanwhile, has slowed its roll – after<br />

jumping from 41 stores to 125 between 2010 and<br />

2020, <strong>the</strong> world’s largest mass-market jewellery<br />

brand has opened just four new stores in <strong>the</strong> past<br />

three years.<br />

It should be noted that Pandora was defined and<br />

listed as a ‘brand-only’ chain in <strong>the</strong> 2010 SOIR –<br />

ra<strong>the</strong>r than a fine jewellery chain.<br />

The distinction is vital because Pandora was, and<br />

remains, both a supplier to <strong>the</strong> broader jewellery<br />

market and a prominent retailer <strong>of</strong> its brand.<br />

For this reason, <strong>the</strong> 2010 SOIR listed Pandora as a<br />

‘brand-only’ operator, defined as “one, or more, fine<br />

or fashion jewellery stores that sell and market its<br />

brand <strong>of</strong> jewellery and/or watches.”<br />

A brand-only retail network is usually a verticalmarket<br />

operation, does not utilise local suppliers,<br />

and stores are <strong>of</strong>ten owned and operated by <strong>the</strong><br />

proprietor <strong>of</strong> <strong>the</strong> brand or under license via franchise<br />

agreements. Because Pandora is somewhat unique -<br />

it is a supplier and simultaneously a retailer - with its<br />

own stores, it has been reclassified as a chain store<br />

ra<strong>the</strong>r than a brand-only store.<br />

Mama Bear and Baby Bear<br />

The fine chain store category has always contained<br />

large, medium and small chains.<br />

Jeweller continues to define a ‘chain’ as: A group <strong>of</strong><br />

five or more fine or fashion jewellery stores trading<br />

under a single (brand) name, with one ownership<br />

entity – ei<strong>the</strong>r person or company - coordinating<br />

buying and marketing activities across <strong>the</strong> group.<br />

This could include a franchise operation.<br />

A chain store usually has central management and<br />

standardised business methods and practices. It will<br />

purchase products from local suppliers and/or import<br />

its products.<br />

In recent years, <strong>the</strong> middle ground <strong>of</strong> <strong>the</strong> fine<br />

jewellery market has been relatively stable. Since<br />

2020, The Jewellery Group’s (TJG) two brands have<br />

settled comfortably into this bracket, with 36 Zamels<br />

and 27 Mazzucchelli stores, leaving TJG with 63<br />

locations in total.<br />

"Recruiting has<br />

become challenging<br />

since <strong>the</strong> pandemic, and<br />

employees are increasingly<br />

asking for more. "<br />

Of course, <strong>the</strong> 2023 Zamel’s store count sharply<br />

declined from when <strong>the</strong> family business was sold.<br />

Zamels was founded in 1954 and, after evolving into<br />

a household name in Australia over <strong>the</strong> next half<br />

century, was sold in 2007 to Quadrant Private Equity.<br />

In 2010, Zamels had 100 locations as <strong>the</strong> nation’s<br />

third-largest jewellery chain.<br />

<strong>Industry</strong> speculation valued <strong>the</strong> Quadrant deal at<br />

between $75 million and $100 million; however, when<br />

all was said and done, <strong>the</strong> final figure was believed to<br />

fall well short – somewhere around $50 million.<br />

Even at this price, it was still considered an overpay.<br />

This was seemingly proven accurate when Quadrant<br />

Private Equity sold <strong>the</strong> company in 2012 to Mumbaibased<br />

M Suresh Group DMCC, one <strong>of</strong> <strong>the</strong> world’s<br />

largest jewellery manufacturers.<br />

“In a stunning depreciation, Quadrant is tipped to<br />

be <strong>of</strong>floading <strong>the</strong> group for less than $20 million –<br />

a loss <strong>of</strong> around $30 million in just over four years,”<br />

Jeweller reported.<br />

At <strong>the</strong> time <strong>of</strong> <strong>the</strong> second sale (2012), <strong>the</strong>re were 102<br />

Zamels locations. Before <strong>the</strong> pandemic in 2020, <strong>the</strong>re<br />

were 37 locations.<br />

Today, <strong>the</strong>re are 36 stores, leading its ‘sister’ chain<br />

Mazzucchelli, which, in 2010, accounted for 25 stores.<br />

While Zamel’s has fallen from large chain to<br />

medium, <strong>the</strong> past 13 years have been productive<br />

for Transworld Enterprises. Shiels has not only<br />

remained in <strong>the</strong> medium-sized area; it has expanded<br />

from 31 locations in 2010 to 50 stores today.<br />

The group also owns Grahams, which has been<br />

reduced from five stores to four since 2020,<br />

meaning it no longer qualifies as a chain under<br />

Jeweller’s definition.<br />

Stability has also been <strong>the</strong> common <strong>the</strong>me for <strong>the</strong><br />

Bishop family in Queensland, maintaining a store<br />

count <strong>of</strong> 38 for Wallace Bishop and five for Hardy<br />

Bro<strong>the</strong>rs.<br />

Wallace Bishop held a store count <strong>of</strong> 57 in 2010,<br />

meaning this figure has declined by one-third in <strong>the</strong><br />

past decade; however, since 2020, it has not changed.<br />

It’s a story <strong>of</strong> stability among <strong>the</strong> smaller players, too<br />

- see table. Gregory Jewellers, Hoskings, and Saleras<br />

have all had negligible changes, rising or falling to<br />

small degrees.<br />

What’s on your mind?<br />

In Jeweller’s most recent special report – What Do<br />

Jewellers Think – chain store owners and managers<br />

were asked what <strong>the</strong>y believed <strong>the</strong> largest challenges<br />

<strong>of</strong> <strong>the</strong> coming 12 months would be.<br />

Many predictions have proven accurate and will<br />

likely continue to plague chain stores heading into<br />

<strong>the</strong> new year.<br />

49


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

CHAIN STORES<br />

TABLE 5: FINE JEWELLERY CHAINS - 2023 STORE COUNT<br />

Chain - Fine Ownership/Group NSW VIC QLD WA SA TAS ACT NT<br />

TOTAL<br />

2023<br />

2010 Variance<br />

Angus & Coote James Pascoe Group 39 20 32 17 3 3 4 1 119 133 -14<br />

Bevilles Michael Hill International 12 14 2 - 2 - - - 30 29 1<br />

Goldmark James Pascoe Group 24 8 22 6 - - 2 1 63 119 -56<br />

Gregory Jewellers Gregory Jewellers 11 2 - - - - - - 13 16 -3<br />

Hardy Bro<strong>the</strong>rs Wallace Bishop 1 1 2 1 - - - - 5 7 -2<br />

Hoskings Hoskings - 12 - - - - - 5 17 17 -<br />

Mazzucchelli's The Jewellery Group 2 7 - 11 4 - 3 - 27 25 2<br />

Michael Hill Michael Hill International 42 34 28 20 7 4 4 2 141 144 -3<br />

Mezi Mezi 5 - - - - - - - 5 25 -20<br />

Mystique Jewellers Mystique Jewellers - - 5 - - - - - 5 - 5<br />

Pandora Pandora 42 31 25 17 7 3 3 1 129 41 88<br />

Prouds James Pascoe Group 94 49 67 39 16 6 5 2 278 217 61<br />

Salera's Salera's - 12 5 - - - - - 17 21 -4<br />

Shiels Transworld Enterprises 5 - 16 13 16 - - - 50 31 19<br />

Simon Curwood Simon Curwood 6 4 2 2 - - - - 14 - 14<br />

Wallace Bishop Wallace Bishop 6 1 31 - - - - - 38 57 -19<br />

Zamels The Jewellery Group 8 6 1 11 7 - 3 - 36 100 -64<br />

Total 297 201 238 137 62 16 24 12 987 982 5<br />

This table compares <strong>the</strong> 2023 stores counts <strong>of</strong> <strong>the</strong> fine jewellery chains to <strong>the</strong>ir 2010 totals. *Pandora was changed from its 2010 classification <strong>of</strong> brand-only to a chain store status for this report.<br />

TABLE 6: JEWELLERY CHAIN STORES AND POPULATION<br />

Australian Population NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

Store count 370 272 309 162 77 18 30 14 1,252<br />

<strong>State</strong> Percentage 29.55% 21.73% 24.68% 12.94% 6.15% 1.44% 2.40% 1.12% 100.00%<br />

Population 8,294,000 6,766,600 5,418,500 2,855,600 1,844,600 572,700 464,600 251,700 26,468,300<br />

Australia's fine and fashion<br />

jewellery chain store<br />

count compared with<br />

state-by-state population<br />

data from March 2023.<br />

<strong>State</strong> Percentage 31.34% 25.56% 20.47% 10.79% 6.97% 2.16% 1.76% 0.95% 100.00%<br />

Variance -1.78% -3.84% 4.21% 2.15% -0.82% -0.73% 0.64% 0.17% 0.00%<br />

Census March 2023<br />

Trying to predict sales volume amid an unpredictable<br />

and erratic market was a common complaint –<br />

making ordering from suppliers difficult.<br />

These concerns were reflected in Jeweller’s recent<br />

survey <strong>of</strong> suppliers – who were asked about <strong>the</strong><br />

quality <strong>of</strong> <strong>the</strong>ir retailer customers' product planning,<br />

ordering, and restocking habits.<br />

Just 13 per cent <strong>of</strong> suppliers described <strong>the</strong> situation<br />

as ‘excellent’ or ‘above average’. A startling 82<br />

per cent said product planning and ordering was<br />

‘average’ or ‘below average’. (See Page 77)<br />

While <strong>the</strong>se figures almost certainly reflect<br />

interactions with independents and chains, <strong>the</strong><br />

overall sentiment remains <strong>the</strong> same – ordering from<br />

suppliers is difficult because <strong>of</strong> <strong>the</strong> unpredictability <strong>of</strong><br />

<strong>the</strong> market.<br />

Staffing issues were by far <strong>the</strong> most common<br />

complaint. Recruiting has become challenging<br />

since <strong>the</strong> pandemic, and employees are increasingly<br />

asking for more.<br />

In September, <strong>the</strong> Australian Bureau <strong>of</strong> Statistics<br />

published data detailing a 14.4 per cent increase in<br />

retail job vacancies since May.<br />

Australian Retailers Association CEO Paul Zahra said<br />

this news was particularly troubling as <strong>the</strong> holiday<br />

season approaches – <strong>the</strong> busiest time for jewellery<br />

retailers.<br />

“Unfortunately, this situation is exacerbating during<br />

<strong>the</strong> most critical time <strong>of</strong> year on <strong>the</strong> retail calendar –<br />

<strong>the</strong> Christmas trading period,” he said.<br />

Conductivity<br />

If, as our new study finds, independent stores have<br />

declined by 26 per cent since 2010, how do chain<br />

stores wea<strong>the</strong>r <strong>the</strong>se economic burdens?<br />

Craig Woolford is a senior retail analyst with MST<br />

Marquee, a platform hosting investment experts'<br />

research. He suggests that <strong>the</strong> saving grace for<br />

jewellery chains is ‘scale’.<br />

“Across all retail sectors, scale has become<br />

increasingly important, even in a category like<br />

jewellery. Consumers will do <strong>the</strong>ir research online<br />

beforehand, and a retail business needs scale to<br />

ensure that <strong>the</strong>y have a pr<strong>of</strong>ile with <strong>the</strong> consumer,”<br />

he explains.<br />

“You need to be able to stand out and have a brand<br />

that produces good recall with consumers to ensure<br />

that you’re <strong>the</strong> first consideration for consumers.”<br />

Put ano<strong>the</strong>r way, for example, <strong>the</strong> Prouds website<br />

<strong>of</strong>fers digital marketing support for every store in<br />

<strong>the</strong> network – 278 in total. This means that each<br />

consumer marketing activity increasing <strong>the</strong> business<br />

pr<strong>of</strong>ile is evenly shared among many stores.<br />

Conversely, for neighbouring independents, efforts to<br />

promote <strong>the</strong> business online benefit that store alone –<br />

and in a crowded market, standing out is difficult.<br />

“It all comes back to digital marketing, and remaining<br />

a first consideration for consumers because <strong>of</strong> this<br />

promotion is why independents are finding it harder,”<br />

Woolford continues.<br />

“This is a matter <strong>of</strong> scale – a single dollar spent by a<br />

chain promoting <strong>the</strong> company online can impact every<br />

store in <strong>the</strong> network, whereas a single store operator<br />

enjoys no such benefit.”<br />

Ano<strong>the</strong>r essential matter to consider is that chain<br />

stores now dominate retail space in <strong>the</strong> major<br />

shopping centres.<br />

Whereas, 20 years ago, jewellery chain stores<br />

shared a shopping centre with a small number<br />

<strong>of</strong> independent jewellers; however, <strong>the</strong> dramatic<br />

increase in tenancy costs has all but driven family<br />

jewellery stores out <strong>of</strong> <strong>the</strong> major shopping centres<br />

(See Page 67)<br />

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Fashion Chain Stores<br />

Rapid rise and dramatic demise<br />

The past decade has been a rollercoaster ride for fashion jewellery chains,<br />

defined by explosive expansions and dramatic collapses.<br />

KEY FINDINGS: AT A GLANCE<br />

265<br />

Number <strong>of</strong> fashion jewellery<br />

chain stores in Australia.<br />

Pandora was once dismissed<br />

as 'cheap fashion jewellery'<br />

and is now <strong>the</strong> world's<br />

largest mass-market<br />

jewellery brand.<br />

Lovisa has grown from<br />

<strong>the</strong> 'little sister' <strong>of</strong> Diva in<br />

2010, to a dominant force<br />

in <strong>the</strong> Australian jewellery<br />

industry.<br />

30%<br />

Decline <strong>of</strong> fashion jewellery chain<br />

stores in Australia since 2010.<br />

Over <strong>the</strong> past decade, Australia’s fashion<br />

jewellery chain stores have proven to be<br />

something <strong>of</strong> a dramatic ‘flash in <strong>the</strong> pan’.<br />

At <strong>the</strong> time <strong>of</strong> <strong>the</strong> 2010 <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong><br />

(SOIR), seven major companies accounted for 378<br />

stores – representing a remarkable 27.8 per cent <strong>of</strong><br />

all chain stores in Australia.<br />

This sharp rise to prominence occurred within three<br />

years, with fashion chain stores expanding by 95 per<br />

cent between 2007 and 2010.<br />

By <strong>the</strong> decade's end, just one <strong>of</strong> <strong>the</strong> seven companies<br />

would remain standing – Lovisa. This means that <strong>of</strong><br />

<strong>the</strong> 378 stores operating in 2010, 343 no longer exist.<br />

Interestingly, <strong>the</strong> trends <strong>of</strong> <strong>the</strong> second half <strong>of</strong> <strong>the</strong> past<br />

decade - which may have explained <strong>the</strong> rise <strong>of</strong> <strong>the</strong><br />

category - have spiked again.<br />

Jeweller estimates that 265 fashion chain stores<br />

currently operate in Australia, accounting for just 7.5<br />

per cent <strong>of</strong> all jewellery stores. In terms <strong>of</strong> chains,<br />

fashion stores account for 21.3 per cent.<br />

Category blurring<br />

To understand what prompted <strong>the</strong> collapse <strong>of</strong><br />

so many fashion chains, it’s essential first to<br />

explain <strong>the</strong> factors that drove <strong>the</strong>ir initial success.<br />

Correspondingly, to do that, one must first<br />

understand what differentiates fashion from fine<br />

jewellery.<br />

For example, less than 20 years ago, a new and<br />

unknown brand found its way to Australia and was<br />

quickly dismissed by jewellery retailers.<br />

At <strong>the</strong> time, Pandora was viewed as ‘cheap fashion<br />

jewellery’ manufactured in Asia.<br />

While <strong>the</strong> range consisted <strong>of</strong> beads and charms -<br />

nothing new given that <strong>the</strong> first records <strong>of</strong> charm<br />

bracelets date back to <strong>the</strong> Assyrians, Babylonians,<br />

and Persians from 600-400 BC - Pandora was also<br />

viewed as ‘too fiddly’ for fine jewellery stores.<br />

However, in less than five years, <strong>the</strong> company was<br />

Comparison <strong>of</strong> fashion and fine jewellery stores within <strong>the</strong><br />

Australian jewellery industry. FIne jewellery chains remain <strong>the</strong><br />

dominant force within <strong>the</strong> market, despite <strong>the</strong> expansion <strong>of</strong><br />

Lovisa to 175 stores.<br />

credited with pioneering a brand revolution in <strong>the</strong><br />

Australian and international jewellery industry. And<br />

it did that courtesy <strong>of</strong> a vast network <strong>of</strong> independent<br />

fine jewellery stores!<br />

Just like <strong>the</strong> line between fine and fashion jewellery<br />

has blurred over <strong>the</strong> years, so has <strong>the</strong> retailing divide;<br />

<strong>the</strong>re once was a clear delineation between <strong>the</strong> look<br />

and feel <strong>of</strong> a store that sold fashion jewellery and fine<br />

jewellery.<br />

While it’s somewhat irrelevant to consumers, <strong>the</strong><br />

industry broadly defines fashion products as made<br />

from base metals such as copper, brass, lea<strong>the</strong>r, or<br />

plastic. It could include ‘simulated gemstones’ made<br />

from glass, crystal or even plastic.<br />

Fashion jewellery also includes gold-plated and<br />

silver-plated base metal products.<br />

Pandora’s products - along with o<strong>the</strong>r brands - have<br />

moved up <strong>the</strong> ladder and now include silver and gold<br />

and, more recently, lab-created diamonds.<br />

Origin story<br />

The term ‘fashion jewellery’ is an evolution <strong>of</strong> a<br />

phrase popularised in <strong>the</strong> 1930s during <strong>the</strong> Great<br />

Depression – that being ‘costume jewellery’.<br />

Jewellers had begun making pieces with inexpensive<br />

glass around 300 years earlier.<br />

With personal budgets tighter than ever before,<br />

discretionary spending plummeted during <strong>the</strong><br />

1930s. This limitation on purchasing occurred<br />

simultaneously with mass production and<br />

manufacturing expansion.<br />

The human affinity for jewellery and adornments<br />

is thousands <strong>of</strong> years old and inevitably survives<br />

any economic hardship. Precious metals were<br />

replaced by cheaper base metals, and diamonds and<br />

gemstones were replaced with whatever budgetfriendly<br />

alternative was available.<br />

The philosophy behind <strong>the</strong>se designs was simple –<br />

fashionable for a time, <strong>the</strong>n discarded and replaced<br />

with <strong>the</strong> next ‘flavour <strong>of</strong> <strong>the</strong> month’.<br />

In 2008, <strong>the</strong> Global Financial Crisis devastated<br />

countries worldwide as <strong>the</strong> largest economic crisis<br />

since <strong>the</strong> Great Depression.<br />

Predatory lending practices, excessive risk-taking by<br />

global financial institutions, and <strong>the</strong> rupture <strong>of</strong> <strong>the</strong> US<br />

housing bubble shattered international trade.<br />

In response, consumer discretionary spending again<br />

took a hit, and arguably, <strong>the</strong>se conditions assisted <strong>the</strong><br />

rise <strong>of</strong> fashion jewellery.<br />

Jewellers still viewed <strong>the</strong> category as something <strong>of</strong><br />

an abomination – <strong>the</strong> ‘cheap and easy’ substitute for<br />

quality craftsmanship; however, retailers' <strong>of</strong>ferings<br />

must reflect consumers' demands.<br />

Why argue about semantics when <strong>the</strong>re were great<br />

pr<strong>of</strong>its to be made from <strong>the</strong> ever-returning Pandora<br />

customers looking for <strong>the</strong> newest bead or charm?<br />

That said, it is important for industry studies to<br />

attempt to define fashion and fine jewellery to<br />

measure and record statistics.<br />

52


AT A GLANCE<br />

Australian Fashion<br />

Jewellery Chains<br />

Collette<br />

21.9%<br />

Silver Shop<br />

3.0%<br />

TABLE 1B: FASHION JEWELLERY CHAINS<br />

Fashion Chain 2023 2010<br />

Lovisa 175 (66.0%) 35<br />

Collette 58 (21.9%) -<br />

Silver Shop 8 (3.0%) -<br />

Dinosaur Designs 7 (2.6%) -<br />

Fuse Silver 6 (2.3%) -<br />

Zohar 6 (2.3%) -<br />

Finer Rings 5 (1.9%) -<br />

Bijoux - 11<br />

Butterfly Silver - 20<br />

Diva - 176<br />

32<br />

NEW FASHION JEWELLERY<br />

STORES EMERGED BY 2023<br />

Lovisa<br />

66%<br />

Equip Accessories - 104<br />

Magnolia Silver - 22<br />

Myka - 10<br />

Total 265 378<br />

In 2010, <strong>the</strong>re were seven fashion chains with a total <strong>of</strong> 378 stores.<br />

By 2023 five chains had closed; however, five new fashion chains with<br />

32 stores had emerged by 2023. This is an overall decline <strong>of</strong> 113 stores.<br />

This is done from an industry perspective<br />

because when it comes to <strong>the</strong> consumer, <strong>the</strong>y<br />

are largely unconcerned about industry jargon<br />

and nomenclature, as <strong>the</strong> rise <strong>of</strong> Pandora perfectly<br />

illustrates.<br />

Indeed, from a humble beginning in <strong>the</strong> fashion<br />

market, Pandora is now <strong>the</strong> world’s largest jewellery<br />

brand.<br />

Major players<br />

In <strong>the</strong> years that followed <strong>the</strong> 2010 report, many<br />

<strong>of</strong> Australia’s fashion jewellery chains endured a<br />

dramatic demise. While <strong>the</strong> specific circumstances<br />

<strong>of</strong> each collapse vary, <strong>the</strong>re were many repeating<br />

<strong>the</strong>mes.<br />

As online shopping became increasingly popular and<br />

accessible, fashion jewellery naturally gravitated away<br />

from bricks-and-mortar stores.<br />

This was partly because <strong>of</strong> <strong>the</strong> low-margin, highvolume<br />

nature <strong>of</strong> <strong>the</strong> business model and, as a result,<br />

<strong>the</strong> target demographic for <strong>the</strong>se products – teenage<br />

girls who live on <strong>the</strong>ir smartphones.<br />

Once onlne, <strong>the</strong> chains faced brutal opposition from<br />

established competitors – <strong>of</strong>ten based abroad but<br />

able to penetrate <strong>the</strong> Australian market due to <strong>the</strong><br />

increased globalisation <strong>of</strong> international trade. Many<br />

<strong>of</strong> <strong>the</strong>se competitors were already well-seasoned in<br />

e-commerce.<br />

Ano<strong>the</strong>r challenge <strong>the</strong> fashion chains faced –<br />

shopping centre tenancy costs - stemmed<br />

partly from this target demographic.<br />

Speaking broadly, shopping centres were once <strong>the</strong><br />

cultural ‘place to be’ for teenagers, whe<strong>the</strong>r on<br />

weekends or after school. Naturally, <strong>the</strong>se fashion<br />

chains focused on capturing that market.<br />

As social media became increasingly popular,<br />

Australian teenagers moved away from shopping<br />

centres as cultural hubs. By extension, <strong>the</strong> pr<strong>of</strong>it<br />

generated from already low-margin products<br />

disintegrated fur<strong>the</strong>r.<br />

Equip Accessories operated more than 100 stores<br />

nationwide in 2010; however, it was placed in<br />

liquidation before <strong>the</strong> end <strong>of</strong> 2017. All stores<br />

were closed.<br />

Butterfly Silver, a fashion jewellery business<br />

established in 2002, operated 20 stores in 2010.<br />

The company collapsed in 2018, closing all locations.<br />

Three additional fashion chains failed to see out<br />

<strong>the</strong> decade - Magnolia Silver, Bijoux, and Myka.<br />

At <strong>the</strong> time <strong>of</strong> <strong>the</strong> 2010 report, Diva was Australia’s<br />

largest fashion chain, operating a network <strong>of</strong> 176<br />

stores.<br />

"As social media became<br />

increasingly popular,<br />

Australian teenagers<br />

moved away from<br />

shopping centres as<br />

cultural hubs."<br />

The company was launched in 2003 by husband-andwife<br />

Colette and Mark Hayman and was sold to BB<br />

Retail Capital in 2005.<br />

At <strong>the</strong> height <strong>of</strong> its power, more than 500 Diva stores<br />

operated worldwide; however, in 2015, <strong>the</strong> company<br />

was placed in liquidation.<br />

If <strong>the</strong> name ‘BB Retail Capital’ sounds familiar, that’s<br />

because it is <strong>the</strong> company that owns Lovisa – <strong>the</strong> ‘sole<br />

survivor’ among <strong>the</strong>se fashion chains.<br />

Diva long promoted itself as a retail chain targeting<br />

teenage girls, while <strong>the</strong> intention <strong>of</strong> Lovisa – launched<br />

in 2010 – was to “fill <strong>the</strong> void for high quality, fashionforward<br />

and directional jewellery.”<br />

The apparent intention was for <strong>the</strong> two companies<br />

to complement one ano<strong>the</strong>r; however, just a few<br />

years later, it appeared that Lovisa had become <strong>the</strong><br />

‘favourite child’ following <strong>the</strong> collapse <strong>of</strong> Diva. A<br />

steady stream <strong>of</strong> Diva stores closed while o<strong>the</strong>rs<br />

were converted to Lovisa locations.<br />

Around <strong>the</strong> time <strong>of</strong> Lovisa’s launch in 2010, Colette<br />

Hayman returned to <strong>the</strong> Australian jewellery industry<br />

after a three-year hiatus courtesy <strong>of</strong> a non-compete<br />

clause following <strong>the</strong> sale <strong>of</strong> Diva to BB Retail Capital.<br />

Hayman launched Colette Accessories, beginning with<br />

a single store in <strong>the</strong> Sydney CBD before blossoming<br />

into a network <strong>of</strong> 120 stores within <strong>the</strong> next three<br />

years. It was a dramatic rise, perhaps too dramatic!<br />

Colette Accessories remained active until February<br />

2020, when <strong>the</strong> company was renamed Colette By<br />

Colette Hayman and was placed into administration.<br />

The fate <strong>of</strong> 99 Australian stores and 41 New<br />

Zealand stores was placed in <strong>the</strong> hands <strong>of</strong> Deloitte<br />

Restructuring Services. After an initial deal fell<br />

through, <strong>the</strong> business continued trading through<br />

administration until former Myer boss Bernie<br />

Brookes moved to acquire <strong>the</strong> failing business.<br />

Brookes was to own 90 per cent <strong>of</strong> <strong>the</strong> business,<br />

with <strong>the</strong> remaining 10 per cent owned by an<br />

unidentified silent investor.<br />

As an indication and confirmation <strong>of</strong> <strong>the</strong> relationship<br />

between <strong>the</strong> rise <strong>of</strong> <strong>the</strong> internet and <strong>the</strong> demise <strong>of</strong><br />

fashion jewellery bricks-and-mortar stores, following<br />

<strong>the</strong> acquisition in 2020, Brookes told The Australian<br />

Financial Review that Colette’s focus would be to<br />

become a ‘true omnichannel business’ which would<br />

position itself for an upturn once <strong>the</strong> pandemic<br />

passed.<br />

He explained that if someone were establishing<br />

Colette as a fashion jewellery chain now (in 2020),<br />

“They wouldn't need 140 outlets - a network <strong>of</strong> 35<br />

stores was <strong>the</strong> right size”.<br />

Today, Colette by Colette Hayman has 58 stores<br />

nationally.<br />

53


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

FASHION CHAIN STORES<br />

As Bill Gates once observed: “Every change forces all<br />

<strong>the</strong> companies in an industry to adapt <strong>the</strong>ir strategies<br />

to that change."<br />

Top dog<br />

From humble beginnings as <strong>the</strong> ‘little sister’ <strong>of</strong> Diva,<br />

Lovisa has blossomed into <strong>the</strong> leading fashion chain<br />

in Australia and a dominant figure in <strong>the</strong> fashion<br />

jewellery category.<br />

Lovisa has 175 stores in Australia, with a powerful<br />

presence in Victoria (47 stores), New South Wales<br />

(43 stores) and Queensland (43 stores).<br />

This is a particularly impressive expansion given that<br />

Jeweller had compiled chain store data as recently as<br />

2020 when Lovisa had 140 stores.<br />

With that said, it hasn’t always been smooth sailing<br />

for <strong>the</strong> company, with persistent negative press<br />

undermining Lovisa’s reputation with Australian<br />

consumers.<br />

• In September, <strong>the</strong> Australian Financial Review<br />

revealed that Lovisa had been forced to pay more<br />

than $NZ150,000 to underpaid employees when leave<br />

and public holiday entitlements were ‘miscalculated’.<br />

• Earlier that month, a report from Yahoo News<br />

shed light on allegations that possible legal action<br />

was pending against <strong>the</strong> chain as former employees<br />

accused <strong>the</strong> company <strong>of</strong> ‘bullying’ and ‘demoralising’<br />

staff.<br />

• Around <strong>the</strong> same time, reports on social media<br />

circulated where former Lovisa employees alleged<br />

that <strong>the</strong>y were forced to work in ‘horrible conditions’<br />

and even paid in gift cards.<br />

• Over <strong>the</strong> past 12 months, <strong>the</strong> pay <strong>of</strong> Lovisa CEO<br />

Victor Herrero has drawn public scrutiny. Herrero<br />

is paid approximately $AU30 million annually – more<br />

than <strong>the</strong> CEOs <strong>of</strong> Qantas, Coles, and Woolworths.<br />

These consistent jabs at Lovisa’s reputation and<br />

<strong>the</strong> company’s management are nothing new.<br />

Under Brett Blundy’s management, Diva hit <strong>the</strong><br />

media headlines in October 2011 when it launched<br />

a range <strong>of</strong> Playboy-branded accessories ostensibly<br />

aimed at young girls, including pre-teens.<br />

The range subsequently created a consumer<br />

backlash.<br />

A company press statement at <strong>the</strong> time described<br />

<strong>the</strong> new range as "<strong>the</strong> perfect amount <strong>of</strong> jewels,<br />

and just <strong>the</strong> right amount <strong>of</strong> sexiness. Playboy for<br />

Diva will have every girl feeling glamorous and red<br />

carpet ready".<br />

Social media went into a meltdown, with irate<br />

customers, angry fans, and furious parents<br />

inundating Diva’s Facebook page with threats <strong>of</strong> a<br />

boycott. At <strong>the</strong> same time, women’s and children’s<br />

advocacy groups mounted vocal campaigns against<br />

<strong>the</strong> company.<br />

Complaints about <strong>the</strong> Playboy range claimed Diva<br />

was purposely promoting a brand that supported<br />

explicit, violent, and degrading pornography to<br />

'tweens’ and teenage girls.<br />

Melinda Tankard Reist, an Australian author and<br />

advocate for women and girls with Collective Shout,<br />

expressed concern over Diva’s new range, saying Diva<br />

was endorsing <strong>the</strong> Playboy brand – alongside Winnie<br />

<strong>the</strong> Pooh charm bracelets, Disney Princess pendants<br />

and Cute Cupcakes Best Friends necklaces – to girls<br />

as young as nine.<br />

TABLE 2: FASHION JEWELLERY CHAIN STORE COUNTS 2023<br />

Chain - Fashion NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

Colettte 19 16 16 4 2 - 1 - 58<br />

Dinosaur Designs 3 2 2 - - - - - 7<br />

Finer Rings 1 4 - - - - - - 5<br />

Fuse Silver 3 - 2 - - - 1 - 6<br />

Lovisa 47 43 43 21 13 2 4 2 175<br />

Silver Shop - - 8 - - - - - 8<br />

Zohar - 6 - - - - - - 6<br />

Total 73 71 71 25 15 2 6 2 265<br />

A state-by-state breakdown <strong>of</strong> <strong>the</strong> fashion jewellery chain indicates that Lovisa, with 175, is <strong>the</strong> market leader. Note that Colette was<br />

launched in 2010 with one store.<br />

“Diva has become a willing participant in pimping <strong>the</strong><br />

brand and its values to its<br />

young customers,” she said. “We are calling on<br />

Diva to remove all Playboy items from sale. Diva<br />

is complicit in grooming girls as consumers <strong>of</strong> a<br />

porn brand which portrays women as 'bitches' and<br />

'whores' to be used for men's sexual gratification.”<br />

The intensity <strong>of</strong> <strong>the</strong> anti-Diva campaign was unusual,<br />

primarily due to <strong>the</strong> ease with which disgruntled<br />

consumers expressed discontent on <strong>the</strong> company’s<br />

Facebook page, which, at <strong>the</strong> time, had 91,000<br />

followers.<br />

"Every change forces all <strong>the</strong><br />

companies in an industry<br />

to adapt <strong>the</strong>ir strategies to<br />

that change."<br />

Consumer comments on <strong>the</strong> Facebook pages<br />

included, “Hi Diva. I will no longer buy from your<br />

store until <strong>the</strong> Playboy range is removed.” Ano<strong>the</strong>r<br />

angry Facebook member said, “Shame on you for<br />

promoting an adult porn brand in a store that is<br />

primarily for young girls.”<br />

These media controversies could explain <strong>the</strong><br />

company’s baffling decision not to participate in this<br />

report, with company directors outright refusing to<br />

provide any information.<br />

That is, basic information about store counts is<br />

available to <strong>the</strong> general public; however, for accuracy,<br />

researchers approach chains to confirm <strong>the</strong> data<br />

being published to ensure <strong>the</strong> figures listed online<br />

are accurate and up to date.<br />

Despite all o<strong>the</strong>r major chains happily cooperating<br />

in <strong>the</strong> best interests <strong>of</strong> transparency and accurate<br />

reporting, Lovisa’s leadership – as well as that <strong>of</strong> BB<br />

Retail Capital - would not confirm public information.<br />

That said, while Lovisa’s public relations and<br />

corporate social responsibility (CSR) may deserve<br />

scrutiny, <strong>the</strong> financial results <strong>of</strong> recent years speak<br />

for <strong>the</strong>mselves. The company notched a record 33.1<br />

per cent increase in revenue for <strong>the</strong> past financial<br />

year amid expansion into 12 countries.<br />

Lovisa achieved sales <strong>of</strong> $596.5 million for <strong>the</strong> past<br />

financial year, with <strong>the</strong> increase attributed to price<br />

rises during <strong>the</strong> third quarter.<br />

Precocious puppies<br />

While <strong>the</strong> Australian fashion jewellery industry<br />

is dominated by Lovisa and, to a lesser extent, a<br />

revitalised Colette, many smaller chains are worth<br />

keeping an eye on.<br />

Specialising in silver jewellery, Fuse Silver began<br />

as a family-owned and operated business in 2002;<br />

however, it has since expanded to six locations -<br />

Sydney, Canberra, Brisbane, Townsville, and<br />

Tweed Heads.<br />

FinerRings is a relative newcomer to <strong>the</strong> industry,<br />

launching in 2018 under <strong>the</strong> watchful eye <strong>of</strong> Taiba<br />

Ash.<br />

Ash dipped her toes into <strong>the</strong> waters <strong>of</strong> <strong>the</strong> jewellery<br />

industry by attending local markets in Melbourne,<br />

and just five years after opening <strong>the</strong> doors at her<br />

first store on Chapel Street, she has expanded <strong>the</strong><br />

business to five locations.<br />

FinerRings prides itself on creating ‘affordable<br />

jewellery that doesn’t end up in landfill’.<br />

O<strong>the</strong>r chains are happy to play <strong>the</strong> long game.<br />

Dinosaur Designs was founded by creative directors<br />

Louise Olsen and Stephen Ormandy in 1985, and<br />

today has seven stores in Australia, as well as<br />

locations in London and New York.<br />

It’s a similar story with Silver Shop, with <strong>the</strong> first<br />

store opening in Toowoomba in 1999. Silver Shop is<br />

now active in eight Queensland cities, specialising in<br />

sterling silver jewellery.<br />

Is <strong>the</strong> stage set?<br />

While <strong>the</strong> purpose <strong>of</strong> this report is not to forecast<br />

industry trends, when you consider <strong>the</strong> factors that<br />

led to <strong>the</strong> rise <strong>of</strong> costume jewellery in <strong>the</strong> 1930s and<br />

fashion jewellery in <strong>the</strong> 2000s, an argument could be<br />

made that retailers can expect ano<strong>the</strong>r resurgence in<br />

<strong>the</strong> years to come.<br />

According to a report by <strong>the</strong> World Economic Forum,<br />

almost two-thirds <strong>of</strong> chief economists entered this<br />

year believing that a global recession was likely.<br />

The Western world is currently experiencing weak<br />

consumer spending and consumer confidence,<br />

resulting in discretionary spending plummeting in<br />

a similar manner to <strong>the</strong> economic conditions in <strong>the</strong><br />

1930s and 2000s.<br />

That said, it is unlikely that Australia will anytime<br />

soon see <strong>the</strong> number <strong>of</strong> fashion jewellery chain<br />

stores it once did.<br />

54


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56


Brand-only stores:<br />

Vertical integrators take a foothold<br />

The most significant change in <strong>the</strong> market has been <strong>the</strong> expansion <strong>of</strong> <strong>the</strong><br />

international watch and jewellery companies as <strong>the</strong>y take control <strong>of</strong> <strong>the</strong>ir<br />

brand image via a vertical market business model.<br />

KEY FINDINGS: AT A GLANCE<br />

239<br />

Number <strong>of</strong> brand-only jewellery<br />

stores in Australia. This marks<br />

a 185 per cent increase<br />

since 2010 (129 stores).<br />

Perception management<br />

is a priority for jewellery<br />

brands, and discounting<br />

is viewed as detrimental.<br />

Brand-only stores have<br />

aggressively expanded<br />

since 2010 as companies<br />

seek more control over<br />

<strong>the</strong> relationship between<br />

brand and consumer.<br />

40<br />

Watch and jewellery companies<br />

operating brand-only stores in<br />

Australia in 2023, nearly doubled<br />

<strong>the</strong> amount from 2010.<br />

One <strong>of</strong> <strong>the</strong> most significant changes in <strong>the</strong><br />

jewellery and watch industries over <strong>the</strong> past 20<br />

years, but most notably over <strong>the</strong> past decade,<br />

is <strong>the</strong> development and evolution <strong>of</strong> brand-only stores.<br />

What began as a new concept has become a prominent<br />

‘player’.<br />

Jeweller defines a brand-only retailer as a fine or<br />

fashion jewellery store – or group <strong>of</strong> stores – that<br />

sells and markets its own brand <strong>of</strong> jewellery and/or<br />

watches.<br />

It is usually a vertical-market operation, does not<br />

utilise local suppliers, and does not distribute to<br />

third-party stockists on a large scale. Intriguingly,<br />

<strong>the</strong> company <strong>of</strong>ten started as a wholesaler (supplier)<br />

<strong>of</strong> its product to traditional retail outlets.<br />

Brand-only stores are usually owned and operated by<br />

<strong>the</strong> proprietor <strong>of</strong> <strong>the</strong> brand, or <strong>the</strong>y could be operated<br />

under licence by local businesses.<br />

Today, that definition still applies, and <strong>the</strong>re has been<br />

a dramatic rise in international brands expanding<br />

<strong>the</strong>ir presence in <strong>the</strong> Australian market, which, in<br />

turn, has resulted in <strong>the</strong> brand-only store model<br />

increasingly competing with independent retailers.<br />

The first <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong> (SOIR) in 2010<br />

recorded 153 brand-only stores and 17 flagship stores<br />

operating in Australia – a total <strong>of</strong> 170 outlets.<br />

It is important to note that <strong>the</strong> current report<br />

discontinues <strong>the</strong> flagship store category, which was<br />

previously defined in a similar way to a brand-only store.<br />

A flagship store could only be operated by <strong>the</strong> brand<br />

owner (not a third party), and it primarily served as a<br />

marketing channel ra<strong>the</strong>r than strictly a business in<br />

its own right.<br />

Whereas <strong>the</strong>re could be many brand-only stores in one<br />

territory or city - think Tiffany & Co or Swarovski - a<br />

flagship store is singular. These stores usually stock <strong>the</strong><br />

most extensive range <strong>of</strong> its product and are regarded as<br />

a ‘landmark store’ or ‘<strong>the</strong> face’ <strong>of</strong> a brand.<br />

One <strong>of</strong> <strong>the</strong> significant differences between <strong>the</strong><br />

two business models was that <strong>the</strong> brand behind a<br />

flagship store - think Pandora or Thomas Sabo - was<br />

a traditional wholesaler, supplying its products to a<br />

range <strong>of</strong> independent stockists.<br />

Flagship stores take <strong>the</strong>ir name from a nautical term<br />

referring to <strong>the</strong> headship in a fleet <strong>of</strong> vessels – one<br />

determined as <strong>the</strong> fastest, largest, newest, and most<br />

heavily armed, or <strong>the</strong> best known.<br />

In retailing, flagship stores are designed to stand<br />

as ideal examples <strong>of</strong> <strong>the</strong>ir featured brand, excelling<br />

beyond lesser stores in every way – <strong>the</strong>y have more<br />

products, greater access to brand marketing, occupy<br />

more floor space and hold a better position in terms<br />

<strong>of</strong> foot traffic.<br />

"What began as a new<br />

concept has become a<br />

prominent ‘player’."<br />

Said ano<strong>the</strong>r way, <strong>the</strong>y are designed to be <strong>the</strong> very<br />

best <strong>of</strong> what a brand has to <strong>of</strong>fer.<br />

Therefore, flagship stores usually form part <strong>of</strong><br />

a company’s marketing and advertising budget,<br />

meaning <strong>the</strong> store's pr<strong>of</strong>itability is less critical than<br />

its presence within a specific market.<br />

For <strong>the</strong>se reasons, flagship stores are usually not<br />

large in number because, by definition, <strong>the</strong>y are<br />

designed to be <strong>the</strong> lead store – <strong>the</strong> archetype <strong>of</strong> <strong>the</strong><br />

company and <strong>the</strong> brand. By nature, <strong>the</strong>re can only be<br />

one or a few leaders. They are also more expensive<br />

to operate.<br />

On <strong>the</strong> o<strong>the</strong>r hand, <strong>the</strong> products <strong>of</strong> a brand-only store<br />

were not (generally) provided to <strong>the</strong> broader market,<br />

<strong>the</strong>reby competing with its new stores. That said, <strong>the</strong><br />

business model can differ slightly from one company<br />

to <strong>the</strong> next.<br />

For example, Swarovski jewellery is retailed from 63<br />

brand-only stores in Australia as well as via a range<br />

<strong>of</strong> stockists (independent jewellery stores). On <strong>the</strong><br />

o<strong>the</strong>r hand, Georg Jensen does not supply to o<strong>the</strong>r<br />

retailers (stockists).<br />

In 2010, flagship stores were more common, and<br />

in many ways, Pandora was leading <strong>the</strong> charge;<br />

however, <strong>the</strong> industry has evolved, and while it's<br />

arguable that some flagship stores still exist - <strong>the</strong><br />

Danish brand Ole Lynggaard still operates a flagship<br />

store as well as distributing its range via a small list<br />

<strong>of</strong> stockists - we believe that an all-encompassing<br />

brand-only category is more appropriate today.<br />

One final note on <strong>the</strong> changing nature <strong>of</strong> <strong>the</strong> industry,<br />

as well as <strong>the</strong> brand-only business model, is best<br />

exemplified by <strong>the</strong> watch brand Daniel Wellington.<br />

The Swedish company first distributed its popular<br />

watch range via a third-party Australian distributor<br />

and <strong>the</strong>n switched to a brand-only store model.<br />

The company has moved back to third-party<br />

distribution while maintaining two retail stores.<br />

In 2010, it was believed appropriate to distinguish<br />

between brand-only and flagship stores; however,<br />

after more than a decade <strong>of</strong> evolution in <strong>the</strong> market,<br />

<strong>the</strong> difference is arguably irrelevant – particularly in<br />

<strong>the</strong> watch sector, which has changed dramatically<br />

over <strong>the</strong> past five years.<br />

Given <strong>the</strong>se changes and <strong>the</strong> closure <strong>of</strong> many flagship<br />

stores (Autore, Briel, Storm, Georgini), Jeweller has<br />

determined that <strong>the</strong> distinction between flagship<br />

and brand-only stores is no longer substantially<br />

significant for an industry report.<br />

The flagship category has, <strong>the</strong>refore, been<br />

discontinued, and all flagship stores will be<br />

considered brand-only stores, regardless <strong>of</strong> <strong>the</strong><br />

commercial nature <strong>of</strong> <strong>the</strong> outlet.<br />

Perception management<br />

Watch and jewellery brands place tremendous<br />

value in controlling <strong>the</strong> relationship between<br />

brand and consumer.<br />

57


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

BRAND ONLY STORES<br />

TABLE 1A: BRAND-ONLY STORES STATE-BY-STATE – JEWELLERY BRANDS<br />

Jewellery<br />

Brand Stores NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

APM Monaco 4 2 1 2 - - - - 9 - 9<br />

Bulgari 2 2 2 - - - - - 6 2 4<br />

Cartier 3 2 1 - - - - - 6 5 1<br />

Chaumet 2 1 - - - - - - 3 - 3<br />

2010<br />

TOTAL<br />

Variance<br />

George Jensen 4 5 3 1 1 - - - 14 11 3<br />

Graff - 1 - - - - - - 1 - 1<br />

Kailis 1 - - 4 - - - - 5 3 2<br />

Les Nereides Paris* 3 1 - - - - 1 - 5 - 5<br />

Ole Lynggaard 1 - - - - - - - 1 - 1<br />

Paspaley 2 3 1 2 - - - 1 9 4 5<br />

Piaget 2 1 - - - - - - 3 - 3<br />

Secrets Shhh 9 4 10 1 1 - - - 25 18 7<br />

Swarovski 24 15 12 7 3 - 2 - 63 32 31<br />

Thomas Sabo 1 1 - - - - - - 2 4 -2<br />

Tiffany & Co 3 2 2 1 1 - - - 9 5 4<br />

Van Cleef & Arpels 1 2 - - - - - - 3 - 3<br />

TOTAL 62 42 32 18 6 0 3 1 164 84 80<br />

Table shows <strong>the</strong> state-by-state brand-only jewellery store counts; Swarovski with 63 stores is <strong>the</strong> largest.<br />

1B: BRAND ONLY STORES STATE-BY-STATE – WATCH BRANDS<br />

Watches<br />

Brand Stores NSW VIC QLD WA SA TAS ACT NT TOTAL<br />

Bell & Ross - 1 - - - - - - 1 - 1<br />

Breitling Boutique 1 1 - - - - - - 2 - 2<br />

Bremont - 1 - - - - - - 1 - 1<br />

Daniel Wellington 1 1 - - - - - - 2 - 2<br />

2010<br />

TOTAL<br />

Variance<br />

Fossil 4 4 - - - - - - 8 14 -6<br />

Franck Muller - 1 - - - - - - 1 - 1<br />

Hublot 1 - - - - - - - 1 - 1<br />

IWC Schaffhausen 1 2 - - - - - - 3 - 3<br />

Jaeger-LeCoultre 1 1 - - - - - - 2 - 2<br />

Longines 1 2 1 - - - - - 4 - 4<br />

Michael Kors 4 4 1 2 - - - - 11 - 11<br />

Omega 3 2 1 - - - - - 6 2 4<br />

Oris Boutique - 1 - - - - - - 1 - 1<br />

Panerai 1 1 - - - - - - 2 - 2<br />

Rolex 2 1 2 - 1 - - - 6 - 6<br />

Seiko 1 1 - - - - - - 2 - 2<br />

Swatch 2 2 1 - - - - - 5 3 2<br />

Tag Heuer 1 2 3 2 1 - - - 9 2 7<br />

Tissot 1 2 - - - - - - 3 - 3<br />

Tudor Boutique 1 1 1 - - - - - 3 - 3<br />

Vacheron Constantin 1 1 - - - - - - 2 - 2<br />

TOTAL 27 32 10 4 2 - - - 75 21 54<br />

Table shows <strong>the</strong> state-by-state brand-only watch store counts. It's interesting to note that <strong>the</strong>re are no brand-only watch stores in Tasmania, <strong>the</strong> Nor<strong>the</strong>rn Territory<br />

or <strong>the</strong> ACT.<br />

58


TABLE 2: BRAND-ONLY STORES - JEWELLERY AND WATCHES<br />

Category 2023 2010 Variance %<br />

Brand-Only Jewellery 164 84 80 195.24%<br />

Brand-Only Watches 75 21 54 257.14%<br />

Chart shows a comparison <strong>of</strong> ongoing brand-only watch and jewellery stores in<br />

Australia from 2010 to 2023.<br />

TABLE 3: BRAND-ONLY ALL STORES COMPARISON<br />

All Stores 2023 2010 Variance %<br />

Store count 239 129 110 185.27%<br />

In 2010, <strong>the</strong>re were 129 brand-only stores, and even though a number <strong>of</strong> brands<br />

closed <strong>the</strong>ir stores, such as Breil and Storm, that figure has increased to 239 by 2023.<br />

Note that Pandora was classified as brand-only in 2010 but is now considered a chain.<br />

With <strong>the</strong> cost <strong>of</strong> product development and marketing in mind, it’s<br />

only natural that <strong>the</strong>se brands want to ensure <strong>the</strong>y have a say at <strong>the</strong><br />

‘vanguard’ <strong>of</strong> <strong>the</strong> relationship – <strong>the</strong> sales floor.<br />

Fur<strong>the</strong>rmore, brands don’t like having <strong>the</strong>ir products discounted or<br />

utilised by retailers in ‘pricing wars’ to attract customers to <strong>the</strong> store.<br />

Price, after all, plays a massive role in <strong>the</strong> consumer’s perception <strong>of</strong><br />

<strong>the</strong> company and its products.<br />

The more expensive it is, <strong>the</strong> more desirable it is – discounting<br />

attacks <strong>the</strong> notions <strong>of</strong> luxury and prestige that marketers and<br />

product developers strive to achieve.<br />

The changing nature <strong>of</strong> <strong>the</strong> market is best demonstrated by <strong>the</strong><br />

high-pr<strong>of</strong>ile watch brands – mainly Swiss. Ten to 15 years ago,<br />

<strong>the</strong>y were distributed via a wide wholesale channel to independent<br />

stockists/retailers.<br />

Many watch companies began establishing flagship stores to<br />

promote <strong>the</strong> brand, arguing that <strong>the</strong> flagship store itself was not a<br />

direct competitor to its independent stockists.<br />

However, many jewellers disagreed! While <strong>the</strong> flagship store<br />

strategy can work, especially in jewellery where repeat purchases<br />

are common – think charms, for example – it’s more complex for<br />

expensive ‘one-<strong>of</strong>f’ purchases, such as luxury watches.<br />

This complexity stems from successful brands <strong>of</strong>ten considering<br />

<strong>the</strong>ir customer as <strong>the</strong> end consumer, and <strong>the</strong> ‘bricks-and-mortar’<br />

retailer is merely seen as <strong>the</strong> delivery method.<br />

While <strong>the</strong> retailer is undoubtedly an integral part <strong>of</strong> <strong>the</strong> transaction,<br />

<strong>the</strong>y are viewed as a facilitator <strong>of</strong> <strong>the</strong> transaction – <strong>the</strong>y are a conduit<br />

between <strong>the</strong> brand and <strong>the</strong> consumer.<br />

With that perception in mind, <strong>the</strong> brand – justifiably – wants to exert<br />

more control over its relationship with <strong>the</strong> customer.<br />

After all, it takes a great deal <strong>of</strong> time, money and effort to market and<br />

develop a product, and a vital component <strong>of</strong> <strong>the</strong> product’s image is<br />

<strong>the</strong> perception <strong>of</strong> value and prestige.<br />

Time to take a stand<br />

Arguably, a $100 watch tells <strong>the</strong> time in <strong>the</strong> same way as a $10,000<br />

watch, so why pay <strong>the</strong> extra cost? These brands invest considerable<br />

energy and money to explain exactly why to consumers and do not<br />

want to risk retailers inadvertently undermining this messaging.<br />

As a result, <strong>the</strong> luxury Swiss watch brands began cultivating <strong>the</strong><br />

flagship store model, establishing high-pr<strong>of</strong>ile outlets in premium<br />

CBD locations as ‘destination’ stores that complemented <strong>the</strong>ir wider<br />

distribution to independent stockists.<br />

Yet, sometimes, <strong>the</strong> strategy backfired by souring relationships with<br />

those retail stockists.<br />

One notable case was <strong>the</strong> 2010 decision <strong>of</strong> luxury conglomerate<br />

Moët-Hennessy Louis Vuitton (LVMH) to open new Tag Heuer flagship<br />

stores in <strong>the</strong> Melbourne and Sydney CBDs while simultaneously<br />

closing <strong>the</strong> accounts <strong>of</strong> neighbouring stockists.<br />

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<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

BRAND ONLY STORES<br />

TABLE 5: BRAND-ONLY STORES STATE-BY-STATE 2023<br />

The move was met with howls <strong>of</strong> protest from retailers<br />

who were already worried about losing sales to rival<br />

watch and jewellery stores – let alone dealing with<br />

direct competition from <strong>the</strong>ir own suppliers!<br />

In April that year, jewellery chain Angus & Coote<br />

took a stand. Reacting swiftly, <strong>the</strong> high-pr<strong>of</strong>ile<br />

jewellery chain withdrew <strong>the</strong> TAG Heuer brand<br />

from all its stores.<br />

Asked at <strong>the</strong> time whe<strong>the</strong>r TAG’s decision would affect<br />

<strong>the</strong> way Angus & Coote would select its watch brands<br />

in future, Andrew Nock, <strong>the</strong>n-general manager <strong>of</strong><br />

merchandising and marketing, said, “Yes,” adding,<br />

“We see <strong>the</strong> supply chain as being a partnership; we<br />

give respect, and we expect respect in return. We<br />

want a win-win situation for all involved.”<br />

Controversy in <strong>the</strong> watch market was not new. In 2007,<br />

<strong>the</strong>re was a similar uproar when <strong>the</strong> Swiss watch<br />

giant Swatch decided to open an Omega flagship store<br />

in Sydney. Although Swatch did not close surrounding<br />

Omega accounts, many stockists were up in arms.<br />

It is important to note that, in those days, luxury<br />

watch and jewellery brands avoided selling <strong>the</strong>ir<br />

products online.<br />

With <strong>the</strong> subsequent change in strategy – and <strong>the</strong>ir<br />

slow acknowledgement that <strong>the</strong>y would have to<br />

embrace e-commerce – luxury watch and jewellery<br />

brands believed that consumers would still go out<br />

<strong>of</strong> <strong>the</strong>ir way to visit a destination (company) store<br />

because <strong>of</strong> <strong>the</strong>ir strong connection to <strong>the</strong> brand.<br />

The result is that today, in many cases, a luxury<br />

watch brand's only remaining distribution channel<br />

is via a brand-only store, ei<strong>the</strong>r company-owned or<br />

operated under licence.<br />

In <strong>the</strong> jewellery sector, Pandora <strong>of</strong>fers ano<strong>the</strong>r<br />

case study into <strong>the</strong> changes in market dynamics.<br />

The 2010 SOIR listed <strong>the</strong> Danish company with<br />

one flagship store owned and operated by Pandora<br />

Australia and 41 brand-only stores – some operated<br />

by franchisees and o<strong>the</strong>rs by Pandora.<br />

Now, 13 years later, Pandora has 129 stores –<br />

which it refers to as ‘concept stores’.<br />

In 2020, it announced <strong>the</strong> closure <strong>of</strong> its original<br />

flagship store in <strong>the</strong> prestigious Pitt Street Mall<br />

retail precinct, which it had occupied since 2010.<br />

The company opted not to renew its lease on <strong>the</strong><br />

premises at <strong>the</strong> end <strong>of</strong> September following lengthy<br />

discussions with Scentre Group, Australia’s largest<br />

retail landlord and <strong>the</strong> operator <strong>of</strong> Westfield shopping<br />

centres.<br />

<strong>State</strong> <strong>of</strong> play<br />

NSW VIC QLD SA WA TAS ACT NT TOTAL<br />

Brand-Only Jewellery 62 42 32 18 6 - 3 1 164<br />

Brand-Only Watches 27 32 10 2 4 - - - 75<br />

Total - All stores 89 74 42 22 8 - 3 1 239<br />

Percentage 37% 34% 15% 3% 9% 0% 1% 0% 100%<br />

Chart shows a state-by-state breakdown <strong>of</strong> brand-only stores in Australia, with New South Wales (37 per cent) leading <strong>the</strong> country.<br />

Even though <strong>the</strong> flagship category is now redundant,<br />

it is still possible to compare <strong>the</strong> 2010 data with<br />

data collected in 2023 by combining <strong>the</strong> two 2010<br />

categories - brand-only and flagship.<br />

Excluding Pandora, this shows that 13 years ago,<br />

<strong>the</strong>re were 20 watch and jewellery brands in <strong>the</strong><br />

Australian market responsible for 170 flagship and<br />

brand-only stores, compared to 40 brands responsible<br />

for 239 stores today.<br />

However, Pandora’s business has changed to <strong>the</strong><br />

extent that we now define its 129 retail outlets as<br />

chain stores ra<strong>the</strong>r than brand-only stores, in line<br />

with <strong>the</strong> notion that Pandora is not a verticalmarket<br />

operation.<br />

That is, Pandora still has a wide wholesale channel to<br />

independent stockists – unlike, for example, Tiffany &<br />

Co., Cartier, and Georg Jensen, which have vertically<br />

integrated business models. In 2023, its independent<br />

stockists now number 114.<br />

"Yet, sometimes, <strong>the</strong><br />

strategy backfired by<br />

souring relationships with<br />

those retail stockists."<br />

A vertically integrated business consolidates<br />

multiple steps in <strong>the</strong> typical distribution process,<br />

from manufacturing to consumer purchase.<br />

Hence, Pandora stores are now classed as a<br />

‘chain’ for <strong>the</strong> purpose <strong>of</strong> our <strong>2024</strong> study.<br />

This means we can compare apples with apples<br />

and observe 129 flagship and brand-only stores in<br />

2010 (excluding Pandora) compared to 239 stores in<br />

2023, which is a substantial incease.<br />

Fur<strong>the</strong>r, we can see that five <strong>of</strong> <strong>the</strong> 19 brands in 2010<br />

(Autore, Briel, Storm, Georgini and Guess) no longer<br />

operate any retail stores today.<br />

Despite this contraction, more than 30 new brands<br />

have entered <strong>the</strong> Australian market since 2010,<br />

meaning that <strong>the</strong>re are now 40 watch and jewellery<br />

companies operating brand-only stores in Australia.<br />

It should be noted here that <strong>the</strong> increase in brandonly<br />

stores has been driven by a number <strong>of</strong><br />

internationally renowned luxury conglomerates<br />

such as Moët Hennessy Louis Vuitton (LVMH) and<br />

Richemont, which cover a wide range <strong>of</strong> products,<br />

from jewellery and watches to fashion and lea<strong>the</strong>r<br />

goods, perfumes and cosmetics.<br />

These groups account for many <strong>of</strong> <strong>the</strong> new brandonly<br />

stores introduced to <strong>the</strong> Australian retail<br />

economy over <strong>the</strong> past ten years – including<br />

Montblanc, Chaumet, Hublot, Piaget, Van Cleef &<br />

Arpels, Jaeger-LeCoultre, and Vacheron Constantin –<br />

and increases in <strong>the</strong> number <strong>of</strong> existing brand<br />

stores, notably Bulgari and TAG Heuer.<br />

International luxury brands such as Chopard and<br />

Hèrmes have followed suit.<br />

Notably, Kennedy Jewellers, established in Sydney in<br />

1976, operates eight boutiques (brand-only stores) for<br />

Rolex, IWC Schaffhausen, Jaeger-LeCoultre, Panerai<br />

and Graff.<br />

These have been included in this section <strong>of</strong> <strong>the</strong> SOIR,<br />

consistent with Jeweller’s definition that brand-only<br />

stores can be owned and operated by <strong>the</strong> proprietor<br />

<strong>of</strong> <strong>the</strong> brand or under licence by third parties.<br />

Rolex, for example, has two o<strong>the</strong>r boutiques in<br />

Queensland operated by Langfords Jewellers,<br />

while owner Richemont operates a second<br />

Jaeger-LeCoultre brand-only store in Melbourne.<br />

The evolution <strong>of</strong> <strong>the</strong> watch and jewellery brand mix<br />

over <strong>the</strong> past decade is also fascinating. Of <strong>the</strong> 19<br />

brands in <strong>the</strong> 2010 report, only six were watches; a<br />

decade on, that figure has more than tripled to 21<br />

brands. And not all are Swiss!<br />

Japanese watch brand Seiko selected Australia as an<br />

early location for its expansion into brand-only stores.<br />

In March 2016, its first store debuted in Sydney’s<br />

Queen Victoria Building, and a Melbourne CBD<br />

location followed in 2018. Importantly, in December<br />

2019, <strong>the</strong> company opened a new boutique for its<br />

prestige brand, Grand Seiko, at Pitt Street Mall in<br />

Sydney.<br />

Today, <strong>the</strong>re are 75 brand-only watch stores;<br />

unsurprisingly, approximately 70 per cent <strong>of</strong> <strong>the</strong><br />

outlets (59) are in Sydney and Melbourne. Of course,<br />

many jewellery brands also <strong>of</strong>fer watches.<br />

Ups and downs, like-for-like<br />

There has been a significant move by international<br />

luxury goods brands to establish outlets in Australia.<br />

If we analyse <strong>the</strong> brand-only stores from 2010 to 2023<br />

on a like-for-like basis, we find some interesting<br />

results.<br />

Swarovski is <strong>the</strong> standout performer, having increased<br />

its store count by 14, from 32 in 2010 to 63 in 2023. In<br />

fact, it has opened 17 stores since 2020!<br />

Paspaley more than doubled its store count, from four<br />

to nine – equal to Tiffany & Co.’s local store count also<br />

at nine. TAG Heuer operated two retail outlets in 2010;<br />

today, it has nine.<br />

Over <strong>the</strong> same time, Bulgari increased its presence<br />

in Australia by four stores (from two to six).<br />

Secrets Shhh has had a topsy-turvy decade. First<br />

listed in 2010 with 18 stores, <strong>the</strong> retailer specialises<br />

in cubic zirconia jewellery and reduced its count in <strong>the</strong><br />

ensuing years; however, its post-COVID presence now<br />

stands at 26 stores.<br />

However, that’s not <strong>the</strong> whole story.<br />

Jane Meredith, along with friend Dietmar Gorlich,<br />

co-founded Secrets Shhh in Noosa, Queensland, in<br />

2000. Under a franchise model, it quickly grew to 26<br />

stores across Australia and New Zealand before <strong>the</strong><br />

2007–2008 Global Financial Crisis took its toll, as it<br />

did on so many retailers.<br />

By 2010, it was down to 18 stores, but a fur<strong>the</strong>r<br />

decline was yet to come. In April 2017, <strong>the</strong> number<br />

<strong>of</strong> Secrets Shhh stores had fallen to only seven –<br />

four company-owned and three franchised.<br />

60


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

BRAND ONLY STORES<br />

Jewellery vs Watch<br />

Brand-Only Stores<br />

TIME FLIES!<br />

The below pie charts best illustrate how<br />

<strong>the</strong> international watch brands have<br />

focused on <strong>the</strong> Australian market.<br />

2010<br />

In 2010, when <strong>the</strong> first<br />

industry report was published,<br />

watch brands accounted<br />

for only 21 brand-only stores<br />

(19 per cent); however, by<br />

2023 that figure has increased<br />

to 75 stores (31 per cent).<br />

2023<br />

Over <strong>the</strong> past 13 years, brandonly<br />

stores have increased by<br />

134 - 80 jewellery stores and<br />

54 watch stores.<br />

At that point, former Michael Hill International (MHI) CEO Mike Parsell<br />

acquired a majority stake in <strong>the</strong> business and reinvigorated <strong>the</strong> retailer.<br />

Parsell was well-placed for <strong>the</strong> task; he had been with MHI for 30<br />

years and was responsible for establishing <strong>the</strong> New Zealand jewellery<br />

chain in Australia in 1987.<br />

In October 2019, Parsell oversaw <strong>the</strong> opening <strong>of</strong> <strong>the</strong> newest<br />

Secrets Shhh store at Robina Town Centre on Queensland’s Gold<br />

Coast, bringing <strong>the</strong> total number <strong>of</strong> outlets to 17 – nine companyowned<br />

and eight franchised – almost to <strong>the</strong> same store count level<br />

as a decade earlier.<br />

However, since January 2020, Secrets Shhh has opened eight new<br />

stores, back to its peak around 2007.<br />

Ano<strong>the</strong>r interesting ‘story’ is that <strong>of</strong> APM Monaco, a silver jewellery<br />

brand with seven Australian stores. It was founded in Monaco in<br />

1982 but is now headquartered in Hong Kong. It first expanded to<br />

Australia as a supplier/wholesaler but currently operates as a retailer.<br />

US-based private equity firm TPG Capital, which focuses on leveraged<br />

buyouts and growth capital, acquired a 30 per cent stake in 2019.<br />

APM Monaco is not <strong>the</strong> only retail brand that first attempted a<br />

comprehensive wholesale distribution in Australia.<br />

Danish brand Ole Lynggaard entered <strong>the</strong> Australian market in 2009 –<br />

with much fanfare – as a wholesaler. It established a flagship store in<br />

Market Street, Sydney, in October 2010 – one <strong>of</strong> just six worldwide. The<br />

o<strong>the</strong>rs are located in Copenhagen, Stockholm, Singapore and Paris.<br />

The Sydney flagship store is still operating today, and <strong>the</strong> brand is also<br />

stocked by a small number <strong>of</strong> retailers, including Trewarne Jewellery<br />

in Melbourne and McKinney’s in Brisbane.<br />

The continuing expansion <strong>of</strong> brand-only stores best illustrates <strong>the</strong> shift<br />

from ‘retailer-centric’ to ‘brand-centric’ distribution and marketing –<br />

though <strong>the</strong>re is, clearly, still a firm place for independent stockists in<br />

<strong>the</strong> overall strategy.<br />

PinkKimberley.com.au<br />

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61


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Births, Deaths & Marriages:<br />

Good night and good luck<br />

All <strong>the</strong> world's a stage, and all <strong>the</strong> men and women are merely players.<br />

It’s time to reflect on <strong>the</strong> changing landscape <strong>of</strong> Australia’s jewellery industry.<br />

500+<br />

Number <strong>of</strong> Diva stores<br />

internationally at <strong>the</strong> height<br />

<strong>of</strong> <strong>the</strong> business. The company<br />

entered liquidation in 2015.<br />

Widespread retirement<br />

among jewellery store<br />

owners has led to a<br />

'changing <strong>of</strong> <strong>the</strong> guard'<br />

within <strong>the</strong> industry.<br />

KEY FINDINGS: AT A GLANCE<br />

The collapse <strong>of</strong> jewellery<br />

industry chains is rarely<br />

without drama - and is<br />

<strong>of</strong>ten unexpected.<br />

$45.1m<br />

The value <strong>of</strong> Michael Hill<br />

International's acquisition<br />

<strong>of</strong> Bevilles, which was<br />

finalised in June.<br />

It’s been said that ‘change is inevitable, but progress<br />

is optional’. The timeless relevance <strong>of</strong> that statement<br />

becomes clear when reflecting on <strong>the</strong> evolution <strong>of</strong><br />

<strong>the</strong> Australian jewellery industry in <strong>the</strong> past 13 years.<br />

Like all retail categories, jewellers have not been<br />

immune to <strong>the</strong> ups and downs <strong>of</strong> business cycles, and<br />

since 2010, many chain stores have ‘meet thy maker’.<br />

The good news is that <strong>the</strong>re is a great deal <strong>of</strong> young<br />

blood and new faces, as many smaller businesses<br />

emerged to brea<strong>the</strong> fresh life into <strong>the</strong> fine jewellery<br />

and fashion jewellery categories, with several<br />

jewellers expanding to ‘chain store’ status.<br />

Jeweller defines a ‘chain store’ as a group <strong>of</strong> five or<br />

more fine or fashion jewellery stores trading under<br />

a single (brand) name, with one ownership entity –<br />

ei<strong>the</strong>r person or company - coordinating buying and<br />

marketing activities across <strong>the</strong> group.<br />

This could include a franchise operation.<br />

Births: New kids on <strong>the</strong> block<br />

Simon Curwood Jewellers is an example <strong>of</strong> <strong>the</strong> steady<br />

development <strong>of</strong> a retail business into a new chain.<br />

While <strong>the</strong> family behind <strong>the</strong> retailer has been involved<br />

in <strong>the</strong> jewellery industry since <strong>the</strong> 1970s, Simon<br />

Curwood Jewellers has now evolved into a jewellery<br />

chain and expanded to 14 locations in four states.<br />

The Queensland retailer Mystique Jewellers, with five<br />

stores, is ano<strong>the</strong>r example <strong>of</strong> an up-and-coming fine<br />

jewellery business that has evolved and expanded to<br />

‘chain’ status and are worth watching.<br />

The emergence <strong>of</strong> <strong>the</strong>se businesses is in line with<br />

overall industry trends, as <strong>the</strong> total number <strong>of</strong> chain<br />

stores has increased by approximately 20 per cent<br />

despite a sharply contrasting decline in independent<br />

stores.<br />

The fashion jewellery category has also witnessed<br />

emerging chains such as Fuse Silver, FinerRings,<br />

Zohar, Silver Shop, and Dinosaur Designs since our<br />

2010 study.<br />

TABLE 2: DEATHS - GONE BUT NOT FORGOTTEN<br />

Closed Companies 2010 2023<br />

Bijoux 11 0<br />

Blue Spirit 6 0<br />

Butterfly Silver 20 0<br />

Diva 176 0<br />

Emma & Roe* 36 0<br />

Equip Accessories 104 0<br />

Magnolia Silver 22 0<br />

Myka 10 0<br />

TOTAL 451 0<br />

Seven chains with 451 stores in 2010 no longer operate in<br />

2023. *Emma & Roe: launched in 2014, and by 2018, had 36<br />

stores that were closed.<br />

TABLE 1: BIRTHS - NEW KIDS ON THE BLOCK<br />

New Companies 2010 2023<br />

Dinosaur Designs 0 6<br />

Finer Rings 0 5<br />

Fuse Silver 0 6<br />

Mystique Jewellers 0 5<br />

Simon Curwood 0 14<br />

Zohar 0 6<br />

TOTAL 0 42<br />

While some chains close and/or fail, o<strong>the</strong>r chains emerge. Six<br />

jewellery businesses now qualify as chains (five stores or more).<br />

Deaths: Gone but not forgotten<br />

Indeed, death is one <strong>of</strong> life’s greatest mysteries. It’s<br />

as inevitable as <strong>the</strong> sun rising, yet we seem left with<br />

more questions than answers when it occurs.<br />

Why does a business die?<br />

Depending on whom you ask, <strong>the</strong>re are many<br />

answers. On <strong>the</strong> surface, it may be as simple<br />

as costs exceeding revenue.<br />

However, in some cases, it can be more complex, as<br />

many businesses in <strong>the</strong> Australian jewellery industry<br />

have learned.<br />

The past decade's most pr<strong>of</strong>ound ‘deaths’ have<br />

occurred among fashion jewellery chains.<br />

In 2010, Jeweller recorded seven fashion jewellery<br />

chains accounting for 378 stores; however, just one<br />

<strong>of</strong> those chains remains today; six eventually failed.<br />

While Lovisa seems to have moved from strength<br />

to strength - climbing from 35 stores in 2010 to<br />

175 today - Diva, Equip Accessories, Magnolia Silver,<br />

Butterfly Silver, Bijoux and Myka collectively closed<br />

more than 340 stores before <strong>the</strong> end <strong>of</strong> 2020.<br />

At <strong>the</strong> time <strong>of</strong> <strong>the</strong> 2010 report, Diva was Australia’s<br />

largest fashion chain, operating a network <strong>of</strong> 176<br />

stores.<br />

The company was launched in 2003 by Mark and<br />

Colette Hayman, expanding rapidly before being<br />

sold to BB Retail Capital in 2005.<br />

Under BB Retail Capital, <strong>the</strong> chain would peak at<br />

more than 500 stores internationally; however, it<br />

eventually entered liquidation in 2015.<br />

Budget jewellery chain Kleins was a leading<br />

industry figure in 2007 with more than 180 stores;<br />

however, <strong>the</strong> company was in liquidation by May<br />

<strong>of</strong> <strong>the</strong> following year.<br />

The franchise group collapsed, owing around $25<br />

million, with $15 million owed to secured creditors.<br />

On a case-by-case basis, <strong>the</strong> forces leading to <strong>the</strong><br />

detonation <strong>of</strong> each collapse vary; however, <strong>the</strong>se<br />

chains also faced overlapping pressures.<br />

Fashion jewellery is more suited to internet<br />

sales because <strong>of</strong> its high-volume but low-<br />

63


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64


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

BIRTHS, DEATHS & MARRIAGES<br />

average selling price, and, as a result, competition<br />

from established online businesses and emerging<br />

‘progressive’ rivals is fierce.<br />

The business model <strong>of</strong> <strong>the</strong>se chains has also been<br />

challenged by consistent increases in shopping centre<br />

tenancy costs. The average rent cost per square metre<br />

can far outweigh those on <strong>the</strong> ‘high street’ and which<br />

fur<strong>the</strong>r reduces pr<strong>of</strong>it.<br />

Over <strong>the</strong> past decade, failure hasn’t been confined to<br />

fashion chains – fine jewellery chains have likewise<br />

experienced disappointment.<br />

Michael Hill International (MHI) began exploring o<strong>the</strong>r<br />

markets in 2014 by launching a new jewellery brand<br />

and its first concept store - Emma & Roe.<br />

The business drew its name from Michael Hill’s daughter,<br />

Emma, and his wife’s maiden name, Roe. The launch<br />

occurred after an 18-month trial in five Queensland<br />

stores under <strong>the</strong> Captured Moments brand.<br />

It specialised in a range <strong>of</strong> charms, bracelets,<br />

necklaces, earrings, and stackable rings.<br />

After receiving 'encouraging results’, <strong>the</strong> company<br />

opened its first Emma & Roe concept store in Mackay<br />

(Queensland) in April 2014. Only four years later, <strong>the</strong><br />

business had failed.<br />

In March 2018, MHI announced it would close 24 <strong>of</strong><br />

its 30 Emma & Roe stores to ‘refocus <strong>the</strong> direction’<br />

<strong>of</strong> <strong>the</strong> brand.<br />

According to <strong>the</strong> company, <strong>the</strong> 24 Australian and New<br />

Zealand stores would be closed by 30 June 2018.<br />

The remaining six stores would be repositioned to<br />

take on <strong>the</strong> ‘demi-fine jewellery’ market in smaller,<br />

concentrated locations.<br />

However, <strong>the</strong> brand’s final death certificate was signed<br />

only two months later, with <strong>the</strong> six remaining Emma &<br />

Roe stores closed in July 2018.<br />

In a company statement, <strong>the</strong> closure was attributed<br />

to a strategic review, with CEO Phil Taylor announcing<br />

that in <strong>the</strong> future, <strong>the</strong>re would be a “singular focus on<br />

<strong>the</strong> Michael Hill brand.”<br />

“Management resources and capital that would have<br />

been required to reposition <strong>the</strong> Emma & Roe brand will<br />

instead be directed to our core business, Michael Hill,”<br />

he stated.<br />

Meanwhile, among <strong>the</strong> fine jewellery chains featured<br />

in our 2010 study, Blue Spirit (six stores) and Thomas<br />

Jewellers (nine stores) each closed <strong>the</strong>ir respective<br />

brick-and-mortar locations before <strong>the</strong> pandemic.<br />

At <strong>the</strong> same time, several o<strong>the</strong>r businesses have<br />

fallen under <strong>the</strong> requisite number <strong>of</strong> stores to qualify<br />

as a chain – Regency, Goldsmith, Pascoe, Dia Oro,<br />

Graham’s, and Anthony’s being prominent examples –<br />

however, <strong>the</strong>se former chains have continued trading.<br />

Ano<strong>the</strong>r notable and spectacular jewellery industry<br />

More than 38 per cent <strong>of</strong> retailers suggested that <strong>the</strong>y are<br />

likely to - or are at least considering - retiring or selling<br />

<strong>the</strong>ir business in <strong>the</strong> next five years.<br />

While suppliers are less inclined than retailers to retire<br />

or sell <strong>the</strong>ir business in <strong>the</strong> next five years, a significant<br />

amount (28 per cent) suggested that it was likely.<br />

collapse was that <strong>of</strong> <strong>the</strong> Brisbane-based technology<br />

and diamond tracing company Everledger Australia.<br />

Led by self-described serial entrepreneur Leanne<br />

Kemp, <strong>the</strong> company was placed in liquidation with<br />

unsecured creditors totalling more than $19 million.<br />

Kemp attempted to save <strong>the</strong> business after it was<br />

under voluntary administration; however, a long list<br />

<strong>of</strong> controversies surrounding her previous business<br />

practices and failed ventures became public.<br />

The company’s UK-based parent, Foreverhold<br />

Limited, was placed into liquidation in May 2023,<br />

while <strong>the</strong> Australian business suffered <strong>the</strong> same<br />

fate two months later.<br />

Marriages: Two becomes one<br />

MHI delivered <strong>the</strong> most unexpected story <strong>of</strong> 2023<br />

when, in April, it confirmed <strong>the</strong> acquisition <strong>of</strong> retail<br />

rival Bevilles.<br />

As soon as <strong>the</strong> ink had dried on a $45 million deal,<br />

MHI assumed control <strong>of</strong> 26 stores in Victoria, NSW,<br />

and SA and announced plans to open 80 new Bevilles<br />

locations by 2028, including expansion into Canada and<br />

New Zealand.<br />

At <strong>the</strong> time, MHI CEO Daniel Bracken said that <strong>the</strong><br />

strength <strong>of</strong> Bevilles in gold and silver products would<br />

complement <strong>the</strong> company’s reputation for diamond<br />

jewellery – with this new marriage intended to create a<br />

more ‘well-rounded’ <strong>of</strong>fering to consumers.<br />

“It has a completely different product proposition to <strong>the</strong><br />

MHI business and is predominantly focused on gold,<br />

silver, and watches, whereas MHI is predominantly<br />

diamonds,” he told The Australian Financial Review.<br />

“The majority <strong>of</strong> Bevilles pricing sits below $500.<br />

We’ve stepped away from <strong>the</strong> mid-market, but we<br />

see that <strong>the</strong>re’s still a big opportunity at that end<br />

<strong>of</strong> <strong>the</strong> market.”<br />

It is worth noting that in 2010, MHI operated 140<br />

stores in Australia, while Bevilles held 29.<br />

Over <strong>the</strong> next 13 years, <strong>the</strong> two companies would<br />

head in opposite directions in terms <strong>of</strong> retail success.<br />

Bevilles entered voluntary administration in April 2014,<br />

with a proposed business restructure presented to<br />

creditors.<br />

It was <strong>the</strong> first significant jewellery retailer to fail<br />

in 18 years. The Melbourne-based company had<br />

incurred trading losses <strong>of</strong> more than $10 million over<br />

<strong>the</strong> previous three years, and total claims against it<br />

amounted to $14 million.<br />

Bevilles would survive an eventual restructuring and<br />

retain control <strong>of</strong> 16 existing stores; however, three<br />

years later, a 49 per cent stake in <strong>the</strong> company was<br />

sold to India’s Tara Jewels.<br />

Conversely, MHI’s store count reached 156 in 2020<br />

before declining to 141 during <strong>the</strong> COVID-19 pandemic.<br />

While <strong>the</strong> company’s store count has fallen compared<br />

to 2010, it’s said that <strong>the</strong> best revenge is ‘living well’; on<br />

<strong>the</strong> surface, this philosophy applies to <strong>the</strong> 44-year-old<br />

company.<br />

Despite <strong>the</strong> impact <strong>of</strong> <strong>the</strong> pandemic, Michael Hill has<br />

reported record revenue in recent years, including $628<br />

million in 2022.<br />

The company has also continued to expand in New<br />

Zealand and Canada. Its acquisition <strong>of</strong> Bevilles was<br />

financed by a three-year, $90 million credit facility<br />

from ANZ and HSBC.<br />

65


66


Shopping centres:<br />

Frontline in <strong>the</strong> retail war<br />

Australia’s shopping centres are a towering figure in <strong>the</strong> retail<br />

sector. Over <strong>the</strong> past 20 years fine and fashion jewellery stores<br />

have played an integral part in <strong>the</strong>ir speciality store 'mix'.<br />

KEY FINDINGS: AT A GLANCE<br />

85%<br />

Percentage <strong>of</strong> Australian<br />

shopping centres (91)<br />

that enjoyed increased<br />

revenue in 2022.<br />

Sydney is <strong>the</strong> capital<br />

city with <strong>the</strong> most<br />

jewellers in shopping<br />

centres as a percentage<br />

<strong>of</strong> total stores.<br />

Shopping centres<br />

<strong>of</strong>fer a range <strong>of</strong><br />

benefits to jewellery<br />

retailers, including<br />

increased security.<br />

$1b<br />

Nine shopping centres<br />

in Australia exceeded $1<br />

billion in sales in 2022.<br />

Shopping centres play an integral role in both <strong>the</strong><br />

retail sector and <strong>the</strong> national economy and are a<br />

powerful force in consumer behaviour.<br />

In 2022, it was estimated that shopping centres<br />

accounted for $183 billion in sales, approximately 8.3<br />

per cent <strong>of</strong> Australia’s gross domestic product.<br />

The retail sector accounts for around 10 per cent<br />

<strong>of</strong> <strong>the</strong> Australian workforce, <strong>of</strong> which two-thirds<br />

are employed in shopping centres. Indeed, retail<br />

is <strong>the</strong> single highest private sector contributor to<br />

employment in Australia.<br />

Shopping centres are also important to and for<br />

jewellery retailers.<br />

They have traditionally provided a steady stream<br />

<strong>of</strong> shoppers and potential customers who roam<br />

<strong>the</strong> aisles; however, <strong>the</strong>se centres also <strong>of</strong>fer o<strong>the</strong>r<br />

benefits that suit jewellery stores, perhaps a little<br />

more than most o<strong>the</strong>r retail categories: security!<br />

Due to <strong>the</strong> nature <strong>of</strong> <strong>the</strong> high-value product, a jeweller<br />

on a suburban high street is more susceptible to<br />

burglary and robbery than a store in a large suburban<br />

shopping centre. This and o<strong>the</strong>r reasons are why<br />

jewellers have been attracted to locating stores in<br />

<strong>the</strong>se ‘hubs’.<br />

In <strong>the</strong> early 2000s, <strong>the</strong>re was debate around whe<strong>the</strong>r<br />

Australia was ‘over-retailed’. According to some<br />

experts, we had too many brands, too many shops,<br />

and too many choices. As part <strong>of</strong> that debate, Jeweller<br />

wondered whe<strong>the</strong>r <strong>the</strong>re were too many jewellers.<br />

Putting aside <strong>the</strong> question <strong>of</strong> ‘how many is too many’<br />

and who should decide <strong>the</strong> correct number, a 2003<br />

study was undertaken to measure <strong>the</strong> number <strong>of</strong><br />

jewellery stores in all <strong>the</strong> major shopping centres <strong>of</strong><br />

Australia’s eight capital cities.<br />

Such an analysis had never previously been done<br />

for jewellery and, most likely, many o<strong>the</strong>r retail<br />

categories.<br />

What <strong>the</strong> research found surprised many because,<br />

in part, it uncovered a formula used by landlords<br />

for nearly every shopping centre. And that formula<br />

specifically targeted jewellers!<br />

It is fitting that - 20 years later - <strong>the</strong> matter be<br />

explored again in this <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong><br />

(SOIR) to ascertain if <strong>the</strong>re has been a change in <strong>the</strong><br />

retail mix <strong>of</strong> <strong>the</strong> very same shopping centres.<br />

In o<strong>the</strong>r words, two decades on, where and how<br />

do jewellers fit into <strong>the</strong> tenancy business model <strong>of</strong><br />

Australia’s shopping centre behemoths?<br />

A time before <strong>the</strong> internet<br />

It is easy to forget, or at least overlook, that <strong>the</strong>re was<br />

a time when we existed without <strong>the</strong> Internet. It was<br />

a time when deciding which product or brand to buy<br />

involved actually going shopping.<br />

People didn’t ‘research’ something; <strong>the</strong>y went<br />

shopping for it - <strong>the</strong> actual activity (walking and<br />

looking) was <strong>the</strong> research, unlike today in <strong>the</strong> digital<br />

age <strong>of</strong> immediacy.<br />

Australia<br />

TABLE 1A: ALL CAPITAL CITIES: STORE COUNT COMPARISON 2003 TO 2023<br />

CITY<br />

2023<br />

STORES<br />

2003<br />

STORES<br />

VARIANCE<br />

2023<br />

JEWELLERS<br />

2003<br />

JEWELLERS<br />

Sydney 4,384 3,988 396 246 236 10<br />

Melbourne 3,821 3,500 321 182 172 10<br />

Brisbane 2,175 1,773 402 88 98 -10<br />

Perth 1,518 1,241 277 80 74 6<br />

Adelaide 1,112 986 126 50 39 11<br />

Hobart 162 195 -33 8 8 0<br />

Canberra 692 636 56 24 26 -2<br />

Darwin 204 242 -38 9 14 -5<br />

TOTAL 14,068 12,561 1,507 687 667 20<br />

This table compares <strong>the</strong> capital city shopping centre store counts over a 20 year period; from 2003-2023. It also compares <strong>the</strong><br />

variation in jeweller store counts within each capital city.<br />

VARIANCE<br />

TABLE 1B: JEWELLERS AS A % OF TOTAL STORES<br />

CITY 2023 2003 VARIANCE<br />

Sydney 5.61% 5.92% -0.31%<br />

Melbourne 4.76% 4.91% 3.12%<br />

Brisbane 4.05% 5.53% -1.48%<br />

Perth 5.27% 5.96% -0.69%<br />

Adelaide 4.50% 3.96% 0.54%<br />

Hobart 4.94% 4.10% 0.84%<br />

Canberra 3.47% 4.09% -0.62%<br />

Darwin 4.41% 5.79% 1.37%<br />

This table compares <strong>the</strong> capital city shopping centre store<br />

counts over a 20 year period; from 2003-2023. It also<br />

compares jewellery stores as a percentage <strong>of</strong> city.<br />

67


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

SHOPPING CENTRES<br />

New South Wales<br />

TABLE 2A: SYDNEY - STORE COUNT COMPARISON 2003 TO 2023<br />

CENTRE NAME<br />

2023<br />

STORES<br />

2003<br />

STORES<br />

VARIANCE<br />

2023<br />

JEWELLERS<br />

2003<br />

JEWELLERS<br />

Bankstown Square 197 246 -49 14 14 0<br />

VARIANCE<br />

Baulkam Hills 82 62 20 1 2 -1<br />

Blacktown 292 170 122 14 9 5<br />

Broadway 144 121 23 6 4 2<br />

Burwood 222 239 -17 14 18 -4<br />

Centrepoint 225 130 95 21 13 8<br />

Chatswood 224 260 -36 9 18 -9<br />

Eastgardens 227 250 -23 10 13 -3<br />

Figtree 79 77 2 3 4 -1<br />

Hornsby 279 320 -41 7 15 -8<br />

Hurstville 226 240 -14 12 16 -4<br />

Liverpool 276 220 56 15 15 0<br />

Merrylands 175 85 90 10 4 6<br />

Miranda 409 336 73 23 18 5<br />

Mt Druitt 216 187 29 9 9 0<br />

North Rocks 67 87 -20 2 3 -1<br />

Parramatta 393 391 2 27 22 5<br />

Queen Victoria Bldg 127 180 -53 26 23 3<br />

Warringah Mall 328 280 48 15 11 4<br />

We<strong>the</strong>rill Park 196 107 89 8 5 3<br />

TOTAL 4,384 3,988 396 246 236 10<br />

Bondi Junction* 310 0 310 17 0 17<br />

* Under redevelopment in 2003<br />

2B: JEWELLERS AS A % OF TOTAL STORES<br />

CENTRE NAME 2023 2003 VARIANCE<br />

Bankstown Square 7.11% 5.69% 1.42%<br />

Baulkam Hills 1.22% 3.23% -2.01%<br />

Blacktown 4.79% 5.29% -0.50%<br />

Broadway 4.17% 3.31% 0.86%<br />

Burwood 6.31% 7.53% -1.23%<br />

Centrepoint 9.33% 10.00% -0.67%<br />

Chatswood 4.02% 6.92% -2.91%<br />

Eastgardens 4.41% 5.20% -0.79%<br />

Figtree 3.80% 5.19% -1.40%<br />

Hornsby 2.51% 4.69% -2.18%<br />

Hurstville 5.31% 6.67% -1.36%<br />

Liverpool 5.43% 6.82% -1.38%<br />

Merrylands 5.71% 4.71% 1.01%<br />

Miranda 5.62% 5.36% 0.27%<br />

Mt Druitt 4.17% 4.81% -0.65%<br />

North Rocks 2.99% 3.45% -0.46%<br />

Parramatta 6.87% 5.63% 1.24%<br />

Queen Victoria Bldg 20.47% 12.78% 7.69%<br />

Warringah Mall 4.57% 3.93% 0.64%<br />

We<strong>the</strong>rill Park 4.08% 4.67% -0.59%<br />

TOTAL 5.61% 5.92% -0.31%<br />

Bondi Junction*<br />

And what that meant to retailers - or how <strong>the</strong>y<br />

benefited - was that <strong>the</strong> store staff had a significant<br />

influence on <strong>the</strong> consumer’s pre-purchase<br />

decision(s), again, unlike today, where almost all<br />

decisions have been made via a smartphone or<br />

computer before visiting a store or shopping centre.<br />

Think <strong>of</strong> it this way: <strong>the</strong> retail stores and staff acted<br />

as <strong>the</strong> research centres instead <strong>of</strong> <strong>the</strong> internet.<br />

In short, <strong>the</strong> shopping experience has changed<br />

dramatically!<br />

The 2003 shopping centre investigation revealed<br />

that among <strong>the</strong> 70 major shopping centres loaded<br />

in each capital city, <strong>the</strong>re were 12,561 stores. At<br />

<strong>the</strong> time, <strong>the</strong> Shopping Centre Council <strong>of</strong> Australia<br />

(SSCA) estimated that shopping centres generated<br />

approximately $84 billion in retail sales each year.<br />

But, here’s <strong>the</strong> thing - <strong>of</strong> <strong>the</strong> 12,561 stores, jewellery<br />

retailers accounted for 5.31 per cent.<br />

That figure is a little ‘empty’ until you realise that<br />

jewellers accounted for plus or minus five per cent <strong>of</strong><br />

every shopping centre surveyed.<br />

The commonality was no coincidence!<br />

When <strong>the</strong> same research was done in 2010, this<br />

‘issue’ <strong>of</strong> a seemingly over-representation <strong>of</strong><br />

jewellery stores intensified. The study found that<br />

<strong>the</strong> total store count for <strong>the</strong> same shopping centres<br />

seven years earlier had increased by 14 per cent on a<br />

like-for-like basis, and jewellery retailers accounted<br />

for 5.47 per cent <strong>of</strong> <strong>the</strong>se stores – a modest rise.<br />

The critical insight was that while jewellery<br />

SHOPPING CENTRE STORE MIX<br />

Category %<br />

Fine jewellery chain stores 50.36%<br />

Fashion jewellery chain stores 13.77%<br />

Independent stores 21.09%<br />

Brand-only stores 13.06%<br />

Watch and services 1.72%<br />

Chart shows <strong>the</strong> mix <strong>of</strong> jewellery stores in Australian shopping<br />

centres in 2023.<br />

accounted for just 1.4 per cent <strong>of</strong> overall retail sales<br />

in 2010, shopping centres were still dominated by<br />

jewellery retailers as more than five per cent <strong>of</strong> total<br />

stores.<br />

According to Jeweller’s latest research, <strong>the</strong>re<br />

are 14,068 stores in shopping centres located in<br />

Australian capital cities.<br />

This is a 10.71 per cent increase from <strong>the</strong> data in<br />

2003; however, given that Australia’s total population<br />

has expanded by 34 per cent from 19.72 million in<br />

2003 to 26.47 million in 2023, this would suggest that<br />

local consumers are comparatively ‘less retailed’<br />

than <strong>the</strong>y once were.<br />

Regarding jewellery retailers, <strong>the</strong> latest data reveals<br />

that <strong>the</strong>re are 687 stores in shopping centres located<br />

in capital cities – making up 4.86 per cent <strong>of</strong> <strong>the</strong> total<br />

store count.<br />

Craig Woolford is a senior retail analyst with MST<br />

Marquee, a platform hosting research conducted by<br />

investment experts. He says <strong>the</strong> retail environment<br />

has changed considerably since Jeweller’s first<br />

report was published 20 years ago. And Woolford<br />

should know; he <strong>of</strong>fered insight into <strong>the</strong> 2003 study.<br />

“We’ve experienced somewhat limited floorspace<br />

growth in retail over <strong>the</strong> past five years specifically,<br />

and if you look forward over <strong>the</strong> next five years, we<br />

are anticipating very little growth again,” he explains.<br />

“So while Australia still has plenty <strong>of</strong> retail floor<br />

space available, we are also seeing decent population<br />

growth, which has resulted in an ‘evening out’ <strong>of</strong><br />

what you might consider <strong>the</strong> balance between<br />

68


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

SHOPPING CENTRES<br />

TABLE 3A: MELBOURNE - STORE COUNT COMPARISON 2003 TO 2023<br />

3B: JEWELLERS AS A % OF TOTAL STORES<br />

Victoria<br />

CENTRE NAME<br />

2023<br />

STORES<br />

2003<br />

STORES<br />

VARIANCE<br />

2023<br />

JEWELLERS<br />

2003<br />

JEWELLERS<br />

VARIANCE<br />

Airport West 159 165 -6 7 8 -1<br />

Altona Gate 59 83 -24 1 3 -2<br />

Chadstone 419 378 41 36 19 17<br />

Chirnside Park 109 120 -11 5 6 -1<br />

Doncaster 387 210 177 15 10 5<br />

Eastland 359 255 104 15 15 0<br />

Epping Plaza 120 136 -16 8 4 4<br />

Forest Hill 152 180 -28 6 7 -1<br />

Fountain Gate 395 305 90 16 12 4<br />

Gladstone Park 72 98 -26 8 2 6<br />

Greensborough Plaza 176 180 -4 6 11 -5<br />

Highpoint 423 301 122 18 19 -1<br />

Knox City 297 350 -53 14 19 -5<br />

Southland 335 402 -67 14 23 -9<br />

The Glen 188 170 18 10 6 4<br />

Victoria Gardens 63 75 -12 1 4 -3<br />

Waverly Gardens 108 92 16 2 4 -2<br />

TOTAL 3,821 3,500 321 182 172 10<br />

Melbourne Central * 91 0 91 7 0 7<br />

CENTRE NAME 2023 2003 VARIANCE<br />

Airport West 4.40% 4.85% -0.45%<br />

Altona Gate 1.69% 3.61% -1.92%<br />

Chadstone 8.59% 5.03% 3.57%<br />

Chirnside Park 4.59% 5.00% -0.41%<br />

Doncaster 3.88% 4.76% -0.89%<br />

Eastland 4.18% 5.88% -1.70%<br />

Epping Plaza 6.67% 2.94% 3.73%<br />

Forest Hill 3.95% 3.89% 0.06%<br />

Fountain Gate 4.05% 3.93% 0.12%<br />

Gladstone Park 11.11% 2.04% 9.07%<br />

Greensborough Plaza 3.41% 6.11% -2.70%<br />

Highpoint 4.26% 6.31% -2.06%<br />

Knox City 4.71% 5.43% -0.71%<br />

Southland 4.18% 5.72% -1.54%<br />

The Glen 5.32% 3.53% 1.79%<br />

Victoria Gardens 1.59% 5.33% -3.75%<br />

Waverly Gardens 1.85% 4.35% -2.50%<br />

TOTAL 4.76% 4.91% 3.12%<br />

Melbourne Central *<br />

» IMPORTANT: The various tables here and on subsequent pages, show each major shopping centre in each <strong>of</strong> capital city and compares total store counts over a 20 year period; from 2003-<br />

2023. It also compares jewellery stores as a percentage <strong>of</strong> each shopping centre. As you will note, <strong>the</strong> data demonstrates <strong>the</strong> continuation <strong>of</strong> a formula first identified in 2003, where <strong>the</strong> average<br />

percentage <strong>of</strong> jewellery stores in each shopping centre is always five per cent <strong>of</strong> <strong>the</strong> total store counts, give or take one percent.<br />

consumers and retailers.”<br />

This refers to <strong>the</strong> issue <strong>of</strong> ‘over-retailed’ or an<br />

overabundance <strong>of</strong> choice.<br />

He adds: “What we’re also seeing is that while <strong>the</strong>re<br />

is still plenty <strong>of</strong> retail floor space, <strong>the</strong> areas where<br />

retailers most want to position <strong>the</strong>mselves – where<br />

shoppers want to go, and where sales are at <strong>the</strong>ir<br />

best – are in very high demand.”<br />

Picture <strong>of</strong> today<br />

Sydney and Melbourne have seen a considerable<br />

rise in shopping centre store counts in <strong>the</strong> past two<br />

decades, increasing by nine per cent and eight per<br />

cent, respectively.<br />

These two cities are also similar regarding jewellery<br />

retailers as a percentage <strong>of</strong> overall stores in shopping<br />

centres, with Sydney sitting at 5.61 per cent and<br />

Melbourne at 4.76 per cent.<br />

The total store count in Brisbane has increased by<br />

18.4 per cent; however, Brisbane went against <strong>the</strong><br />

trend. The number <strong>of</strong> jewellers declined by more<br />

than 11.36 per cent, in line with a significant decline<br />

in Queensland’s number <strong>of</strong> independent jewellers<br />

during <strong>the</strong> same period.<br />

Jewellers represent just 4.05 per cent <strong>of</strong> stores in<br />

Brisbane’s shopping centres.<br />

Perth has seen a similar expansion <strong>of</strong> overall stores<br />

as Brisbane, increasing by 22.7 per cent; however,<br />

<strong>the</strong> number <strong>of</strong> jewellers is closer to that <strong>of</strong> Sydney<br />

and Melbourne at 4.86 per cent. Perth’s store count<br />

expansion has been <strong>the</strong> largest in Australia over <strong>the</strong><br />

past two decades (18.25 per cent), while Hobart has<br />

declined <strong>the</strong> most, dropping by 20.37 per cent.<br />

Interestingly, <strong>the</strong> mix in Tasmania remains in line with<br />

o<strong>the</strong>r major cities, with jewellers still making up 4.94<br />

per cent <strong>of</strong> stores.<br />

As <strong>the</strong> table indicates, <strong>the</strong> landlords maintain a<br />

formula <strong>of</strong> around five per cent two decades later.<br />

"Think <strong>of</strong> it this way: <strong>the</strong><br />

retail stores and staff acted<br />

as <strong>the</strong> research centres<br />

instead <strong>of</strong> <strong>the</strong> internet."<br />

Eloise Zoppos is a research and engagement director<br />

with Australian Consumer and Retail Studies, based<br />

at <strong>the</strong> Monash Business School in Melbourne. She<br />

says optimising floor space is akin to walking a<br />

tightrope for shopping centres.<br />

“It’s crucial that shopping centres get <strong>the</strong>ir tenancy<br />

mix right for <strong>the</strong> success <strong>of</strong> <strong>the</strong>ir retailers, but also<br />

for <strong>the</strong> experience <strong>of</strong> <strong>the</strong>ir customers,” she tells<br />

Jeweller.<br />

National Retail Association director Rob Godwin<br />

echoed this sentiment, suggesting that <strong>the</strong> ‘secret to<br />

success’ for retailers is to embrace change – or risk<br />

being left behind.<br />

“The retail landscape is ever evolving and evergrowing.<br />

Customers have access to more retail<br />

options than ever before,” he said.<br />

“Increased competition means retail businesses are<br />

continuously finding new innovative ways to cater to<br />

<strong>the</strong> customer.”<br />

In recent years, priorities have been shifted for<br />

landlords; since <strong>the</strong> pandemic, traffic at shopping<br />

centres has decreased; however, sales remain above<br />

pre-COVID levels.<br />

This has been attributed to consumers performing<br />

more research before shopping – meaning <strong>the</strong>y enter<br />

shopping centres with a specific product in mind<br />

ra<strong>the</strong>r than merely browsing.<br />

In response to this change in consumer behaviour<br />

and o<strong>the</strong>r factors, landlords are prioritising ‘timeconsuming’<br />

tenants that <strong>of</strong>fer products and services<br />

that can’t easily be found online.<br />

“All shopping centres want traffic. They want<br />

consumers to spend time in <strong>the</strong> centre, and <strong>the</strong> best<br />

shopping centres are experts in making this happen<br />

with <strong>the</strong> tenancy mix. We’ve seen <strong>the</strong> rise <strong>of</strong> things<br />

like ‘food precincts’ with cafes and restaurants ra<strong>the</strong>r<br />

than mere food courts as an example,” Woolford<br />

explains.<br />

“Many shopping centres have reimagined <strong>the</strong><br />

cinema precinct, changing how it looks and adding<br />

restaurants nearby to make it more <strong>of</strong> a destination<br />

for consumers. Similarly, we’ve also seen a growth in<br />

health and beauty services at shopping centres, which<br />

69


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

SHOPPING CENTRES<br />

TABLE 4A: BRISBANE - STORE COUNT COMPARISON 2003 TO 2023<br />

4B: JEWELLERS AS A % OF TOTAL STORES<br />

Queensland<br />

CENTRE NAME<br />

2023<br />

STORES<br />

2003<br />

STORES<br />

VARIANCE<br />

2023<br />

JEWELLERS<br />

2003<br />

JEWELLERS<br />

Carindale 369 273 96 16 14 2<br />

Chermside 446 256 190 20 11 9<br />

VARIANCE<br />

Garden City 365 220 145 13 16 -3<br />

Hyperdome 216 220 -4 9 12 -3<br />

Indooroopilly 300 280 20 9 15 -6<br />

Strathpine 134 140 -6 6 9 -3<br />

Redbank Plaza 86 114 -28 1 4 -3<br />

Grand Plaza 121 110 11 9 9 0<br />

Toombul 138 160 -22 5 8 -3<br />

TOTAL 2,175 1,773 402 88 98 -10<br />

CENTRE NAME 2023 2003 VARIANCE<br />

Carindale 4.34% 5.13% -0.79%<br />

Chermside 4.48% 4.30% 0.19%<br />

Garden City 3.56% 7.27% -3.71%<br />

Grand Plaza 4.17% 5.45% -1.29%<br />

Hyperdome 3.00% 5.36% -2.36%<br />

Indooroopilly 4.48% 6.43% -1.95%<br />

Redbank 1.16% 3.51% -2.35%<br />

Strathpine 7.44% 8.18% -0.74%<br />

Toombul 3.62% 5.00% -1.38%<br />

TOTAL 4.05% 5.53% -1.48%<br />

ACT<br />

TABLE 5A: CANBERRA - STORE COUNT COMPARISON 2003 TO 2023<br />

CENTRE NAME 2023 Stores 2003 Stores Variance<br />

2023<br />

Jewellers<br />

2003<br />

Jewellers<br />

Belconnen 259 206 53 9 10 -1<br />

Hyperdome 172 170 2 5 6 -1<br />

Riverside Plaza 56 40 16 2 3 -1<br />

Woden Plaza 205 220 -15 8 7 1<br />

Variance<br />

TOTAL 692 636 56 24 26 -2<br />

5B: JEWELLERS AS A % OF TOTAL STORES<br />

CENTRE NAME 2023 2003 Variance<br />

Belconnen 3.47% 4.85% -1.38%<br />

Hyperdome 2.91% 3.53% -0.62%<br />

Riverside Plaza 3.57% 7.50% -3.93%<br />

Woden Plaza 3.90% 3.18% 0.72%<br />

TOTAL 3.47% 4.09% -0.62%<br />

Tasmania<br />

TABLE 6A: HOBART - STORE COUNT COMPARISON 2003 TO 2023<br />

CENTRE NAME 2023 Stores 2003 Stores Variance<br />

2023<br />

Jewellers<br />

2003<br />

Jewellers<br />

Centrepoint 32 38 -6 1 3 -2<br />

Eastlands 78 82 -4 3 3 0<br />

Northgate 52 75 -23 4 2 2<br />

TOTAL 162 195 -33 8 8 0<br />

Variance<br />

6B: JEWELLERS AS A % OF TOTAL STORES<br />

CENTRE<br />

NAME<br />

2023 2003 Variance<br />

Centrepoint 3.13% 7.89% -4.77%<br />

Eastlands 3.85% 3.66% 0.19%<br />

Northgate 7.69% 2.67% 5.03%<br />

TOTAL 4.94% 4.10% 0.84%<br />

are a form <strong>of</strong> retail that can’t be purchased online.”<br />

He continues: “Shopping centres have done well to<br />

reposition <strong>the</strong> floor space in a way that encourages<br />

consumers to spend more time in <strong>the</strong> centre.”<br />

Are Australians over-retailed?<br />

The original 2003 study sought insight into two<br />

questions: Do we have too many brands and retailers?<br />

Are <strong>the</strong>re too many jewellers in shopping centres?<br />

It’s a difficult question to answer – determining an<br />

appropriate benchmark for <strong>the</strong> balance between<br />

retailers and consumers is challenging.<br />

The responses to this question at <strong>the</strong> time were<br />

mixed. Brian Sweeney, chairman <strong>of</strong> Sweeney<br />

Research, firmly asserted that Australia is ‘overretailed’.<br />

He suggested that in many retail categories – cars,<br />

for example – Australians could choose from almost<br />

every car brand in <strong>the</strong> world. This is not <strong>the</strong> case in<br />

o<strong>the</strong>r countries.<br />

Stan Moore, chief executive <strong>of</strong> <strong>the</strong> Australian Retailers<br />

Association, disagreed that Australians had too much<br />

choice. He pointed to consistently positive retail<br />

turnover, indicating that <strong>the</strong> local market was healthy<br />

and balanced.<br />

"In <strong>the</strong> early 2000s,<br />

<strong>the</strong>re was debate around<br />

whe<strong>the</strong>r Australia was<br />

‘over-retailed’."<br />

Alan Treadgold, director <strong>of</strong> Retail Research and<br />

Consulting, agreed with Moore and suggested <strong>the</strong><br />

question was too broad to be answered concisely.<br />

Brand saturation differs from category to category –<br />

for example, Australia may have a wide variety <strong>of</strong> car<br />

dealers but limited access to motorcycles.<br />

When asked about this topic 20 years later, Zoppos<br />

presented a different perspective.<br />

“What’s also important when thinking about whe<strong>the</strong>r<br />

Australia is over-retailed or not is <strong>the</strong> mix within<br />

categories and not just <strong>the</strong> number <strong>of</strong> brands or<br />

stores, with price point being one example,” she says.<br />

“Thinking about it from <strong>the</strong> customer point <strong>of</strong> view,<br />

<strong>the</strong>y may be attracted to a centre with several stores<br />

within <strong>the</strong> category for browsing and comparison<br />

purposes.”<br />

While accurate, raw figures about store counts today<br />

can be deceptive.<br />

The digital age means <strong>the</strong>re is no such thing as<br />

a country being ‘over-retailed’ given that internet<br />

shopping and e-commerce allow anything and<br />

everything to be available at any time.<br />

With that said, jewellers have remained a crucial ‘cog<br />

in <strong>the</strong> machine’ for shopping centres despite evolving<br />

consumer behaviour.<br />

As mentioned, as a percentage <strong>of</strong> total stores at<br />

shopping centres, jewellers have increased by 3.68<br />

per cent in <strong>the</strong> past two decades.<br />

At <strong>the</strong> more affordable end <strong>of</strong> <strong>the</strong> jewellery market,<br />

impulse purchasing is crucial, and <strong>the</strong> higher level<br />

70


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

SHOPPING CENTRES<br />

NT South Australia Western Australia<br />

TABLE 7A: PERTH - STORE COUNT COMPARISON 2003 TO 2023<br />

CENTRE NAME<br />

2023<br />

STORES<br />

2003<br />

STORES<br />

VARIANCE<br />

2023<br />

JEWELLERS<br />

2003<br />

JEWELLERS<br />

Carousel 335 247 88 16 13 3<br />

VARIANCE<br />

Galleria 137 200 -63 11 14 -3<br />

Garden City 202 180 22 10 12 -2<br />

Innaloo 141 85 56 6 4 2<br />

Joondalup 290 110 180 13 6 7<br />

Karrinyup 312 155 157 12 11 1<br />

Mirrabooka 101 119 -18 4 6 -2<br />

Whitford City 229 145 84 8 8 0<br />

TOTAL 1,518 1,241 277 80 74 6<br />

TABLE 8A: ADELAIDE - STORE COUNT COMPARISON 2003 TO 2023<br />

CENTRE NAME<br />

2023<br />

STORES<br />

2003<br />

STORES<br />

VARIANCE<br />

2023<br />

JEWELLERS<br />

2003<br />

JEWELLERS<br />

Arndale 96 103 -7 2 2 0<br />

Colonnades 151 104 47 7 6 1<br />

Elizabeth 167 130 37 8 4 4<br />

Marion 288 304 -16 13 12 1<br />

Tea Tree Plaza 217 200 17 11 11 0<br />

Westlakes 193 145 48 9 4 5<br />

VARIANCE<br />

TOTAL 1,112 986 126 50 39 11<br />

TABLE 9A: DARWIN - STORE COUNT COMPARISON 2003 TO 2023<br />

CENTRE NAME 2023 Stores 2003 Stores Variance<br />

2023<br />

Jewellers<br />

2003<br />

Jewellers<br />

Casuarina Square 175 186 -11 8 12 -4<br />

Palmerston 29 56 -27 1 2 -1<br />

Variance<br />

TOTAL 204 242 -38 9 14 -5<br />

7B: JEWELLERS AS A % OF TOTAL STORES<br />

CENTRE NAME 2023 2003 VARIANCE<br />

Carousel 4.78% 5.26% -0.49%<br />

Galleria 8.03% 7.00% 1.03%<br />

Garden City 4.95% 6.67% -1.72%<br />

Innaloo 4.26% 4.71% -0.45%<br />

Joondalup 4.48% 5.45% -0.97%<br />

Karrinyup 3.85% 7.10% -3.25%<br />

Mirrabooka 3.96% 5.04% -1.08%<br />

Whitford City 3.49% 5.52% -2.02%<br />

TOTAL 5.27% 5.96% -0.69%<br />

8B: JEWELLERS AS A % OF TOTAL STORES<br />

CENTRE NAME 2023 2003 VARIANCE<br />

Arndale 2.08% 1.94% 0.14%<br />

Colonnades 4.64% 5.77% -1.13%<br />

Elizabeth 4.79% 3.08% 1.71%<br />

Marion 4.51% 3.95% 0.57%<br />

Tea Tree Plaza 5.07% 5.50% -0.43%<br />

Westlakes 4.66% 2.76% 1.90%<br />

TOTAL 4.50% 3.96% 0.54%<br />

9B: JEWELLERS AS A % OF TOTAL STORES<br />

CENTRE NAME 2023 2003 Variance<br />

Palmerston 4.57% 6.45% 1.88%<br />

Casuarina Square 3.45% 3.57% 0.12%<br />

TOTAL 4.41% 5.79% 1.37%<br />

<strong>of</strong> foot traffic in shopping centres <strong>of</strong>fers a chance for<br />

retailers to capitalise.<br />

Woolford says that while sales productivity for o<strong>the</strong>r<br />

retail categories has changed recently, jewellery has<br />

remained consistent.<br />

Simply put, sales productivity is about maximising<br />

output – transactions, revenue, or customer<br />

interactions – while minimising input, namely time<br />

and resources.<br />

In o<strong>the</strong>r words, it's <strong>the</strong> art <strong>of</strong> doing more with less but<br />

doing it smarter. Sales per square foot/metre is also a<br />

component <strong>of</strong> sales productivity.<br />

“Jewellery has a very high transaction value; retailers<br />

are selling a mid-market or expensive product,<br />

which means more sales per square metre. Sales<br />

productivity is very good for jewellers compared to <strong>the</strong><br />

average shopping centre tenant,” he explains.<br />

“So for <strong>the</strong> tenant and <strong>the</strong> landlord, this is a mutually<br />

beneficial arrangement based on what <strong>the</strong> shopping<br />

centre can <strong>of</strong>fer and this sales productivity.”<br />

By comparison, Woodford explains that sales<br />

productivity at shopping centres for fashion and<br />

apparel categories has declined in recent years,<br />

mainly due to <strong>the</strong> competition posed by major<br />

retailers - anchor tenants - such as Kmart, Target,<br />

and, to a lesser extent, Myers.<br />

For example, Kmart has expanded heavily into<br />

clothing and homewares, undermining specialty<br />

retailers <strong>of</strong>fering similar products at shopping<br />

centres.<br />

Put ano<strong>the</strong>r way, landlords use anchor tenants<br />

to attract shoppers to <strong>the</strong> centre, making it more<br />

attractive for specialist retailers to take leases;<br />

however, as <strong>the</strong> major retailers have changed and<br />

expanded <strong>the</strong>ir focus, <strong>the</strong>y are increasingly competing<br />

with specialist retailers.<br />

However, jewellers have been sheltered from <strong>the</strong>se<br />

kinds <strong>of</strong> threats because <strong>of</strong> <strong>the</strong> ‘luxury’ nature <strong>of</strong> <strong>the</strong><br />

product.<br />

“We haven’t seen retail categories like jewellery<br />

encroached by larger format retailers, which is an<br />

important observation [from <strong>the</strong> current data],”<br />

Woolford explains.<br />

“If you consider Kmart as an example, <strong>the</strong>y’ve<br />

expanded <strong>the</strong>ir <strong>of</strong>fering with low-end and effective<br />

fashion and homeware products, which takes away<br />

volume for <strong>the</strong> specialty retailers.<br />

“There’s no equivalent disrupting <strong>the</strong> jewellery<br />

category as we’ve seen in <strong>the</strong> fashion and, to a lesser<br />

degree, footwear categories.”<br />

Godwin says that whe<strong>the</strong>r <strong>the</strong> threat is e-commerce<br />

or larger format retailers, <strong>the</strong> focus for retailers<br />

should be on flexibility and innovation.<br />

“Given that retailers are no longer isolated and have<br />

to exist in a global market, <strong>the</strong>y have to be more agile.<br />

Possibly, having to look wider for newer customers,”<br />

he explains.<br />

“The flat year-on-year sales in 2023 is pro<strong>of</strong> that<br />

interest rates have had <strong>the</strong>ir intended effect. Retailers<br />

have to find new markets to make up for customers<br />

<strong>the</strong>y lost during <strong>the</strong>se tight economic conditions.”<br />

Facts and figures<br />

While sales at shopping centres remain healthy, <strong>the</strong>re<br />

are o<strong>the</strong>r indications that <strong>the</strong> future <strong>of</strong> <strong>the</strong>se retail<br />

hubs is still being determined.<br />

71


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

SHOPPING CENTRES<br />

ALL TOGETHER NOW<br />

687<br />

JEWELLERS ARE LOCATED<br />

IN SHOPPING CENTRES<br />

ACROSS AUSTRALIA<br />

71<br />

SHOPPING CENTRES<br />

ARE OPERATING<br />

ACROSS THE<br />

CAPITAL CITIES<br />

80<br />

NUMBER OF JEWELLERS<br />

LOCATED IN A SHOPPING<br />

CENTRE IN PERTH<br />

4.41%<br />

OF BUSINESSES<br />

IN DARWIN SHOPPING<br />

CENTRES ARE<br />

JEWELLERY STORES<br />

4.5%<br />

JEWELLERS AS % OF<br />

SHOPPING CENTRES IN<br />

ADELAIDE<br />

88<br />

NUMBER OF JEWELLERS<br />

LOCATED IN A SHOPPING<br />

CENTRE IN BRISBANE<br />

246<br />

THE NUMBER OF JEWELLERY<br />

STORES IN SYDNEY'S<br />

SHOPPING CENTRES.<br />

THE MAGIC NUMBER*<br />

4.88%<br />

FOR MORE THAN 20 YEARS<br />

AUSTRALIA’S SHOPPING<br />

CENTRE LANDLORDS HAVE<br />

WORKED TO A FORMULA<br />

OF 5 PER CENT. See below<br />

24<br />

NUMBER OF JEWELLERS<br />

LOCATED IN A SHOPPING<br />

CENTRE IN CANBERRA<br />

» THE MAGIC NUMBER EXPLAINED: Centre managers ‘manage’ jewellery retailers<br />

In 2003 Jeweller undertook its first investigation into <strong>the</strong> store mix in Australia’s capital<br />

city shopping centres. The research uncovered a formula at almost every shopping centre<br />

which resulted in jewellery stores accounting for 5 per cent <strong>of</strong> all speciality retailers in <strong>the</strong><br />

centre. The figure was plus or minus one per cent and in 2003 <strong>the</strong> average was 5.31 per<br />

cent and in 2023 it is 4.88 per cent.<br />

8<br />

NUMBER OF JEWELLERS<br />

LOCATED IN A SHOPPING<br />

CENTRE IN HOBART<br />

4.76%<br />

JEWELLERS AS % OF<br />

SHOPPING CENTRES IN<br />

MELBOURNE<br />

Approximately $2.5 billion worth <strong>of</strong> shopping centres<br />

in Australia have been <strong>of</strong>fered for sale over <strong>the</strong> past<br />

12 months and have yet to find a buyer.<br />

PAR Group is a research agency that specialises in<br />

commercial property. Director Rob Ellis told The<br />

Australian Financial Review that prospective buyers<br />

are apprehensive about major acquisitions due to<br />

fears that shopping centres are overvalued.<br />

“There just aren’t any shopping centre deals. The<br />

whole thing has dried up from a mismatch <strong>of</strong><br />

expectations between sellers and buyers. Last year<br />

was weak as regards to sales. This year has been<br />

even weaker,” he said.<br />

Ellis said <strong>the</strong> bulk <strong>of</strong> retail transaction activity<br />

continues to be smaller, lower-yielding retail outlets.<br />

These smaller shopping centres <strong>of</strong>ten include<br />

supermarkets and have continued to sell due to<br />

<strong>the</strong>ir low risk and <strong>the</strong> consistent demand for grocery<br />

shopping.<br />

The value <strong>of</strong> shopping centres sold has decreased in<br />

<strong>the</strong> past two years, falling 11.1 per cent in 12 months<br />

to $4,554 per square metre.<br />

With that said a recent Shopping Centre News (SCN)<br />

report painted a much more optimistic picture.<br />

The report includes a ranking <strong>of</strong> 91 shopping centres,<br />

<strong>of</strong> which 85 per cent increased <strong>the</strong>ir annual turnover.<br />

These centres account for an annual $54 billion in<br />

retail sales.<br />

Michael Lloyd, <strong>the</strong> publisher <strong>of</strong> SCN, told The Sydney<br />

Morning Herald that Australian shopping centres are<br />

global pioneers in management, development and<br />

marketing.<br />

“The figures are testimony to <strong>the</strong> pr<strong>of</strong>essionalism and<br />

expertise <strong>of</strong> those developing and managing <strong>the</strong>se<br />

centres,” Lloyd said.<br />

“It’s not widely known outside shopping centre circles,<br />

but <strong>the</strong> Australian shopping centre industry is <strong>the</strong><br />

world leader, and not by a short head ei<strong>the</strong>r, but by<br />

several lengths.”<br />

"Jewellers represent just<br />

4.05 per cent <strong>of</strong> stores<br />

in Brisbane’s shopping<br />

centres."<br />

According to <strong>the</strong> report, nine <strong>of</strong> Australia’s ten biggest<br />

shopping centres had more than $1 billion in sales in<br />

2022. Melbourne’s Chadstone shopping centre holds<br />

<strong>the</strong> largest annual turnover with $2.7 billion in sales,<br />

a 16.2 per cent increase from 2020.<br />

Three new shopping centres have passed <strong>the</strong><br />

$1 billion benchmark - Pacific Fair (Gold Coast),<br />

Westfield Miranda (Sydney), and Westfield Carindale<br />

(Brisbane).<br />

One conclusive change<br />

While <strong>the</strong> current research indicates little or no<br />

change in <strong>the</strong> overall formula <strong>of</strong> jewellery stores<br />

constituting around five per cent <strong>of</strong> all stores in<br />

Australia’s capital cities shopping centres, <strong>the</strong> data<br />

hides one significant change.<br />

And interestingly, <strong>the</strong> changes relate to two o<strong>the</strong>r<br />

parts <strong>of</strong> this 2020 SOIR - <strong>the</strong> decline in independent<br />

jewellery stores since 2010 (see Page 27) and <strong>the</strong><br />

increase in chain stores and <strong>the</strong> rise <strong>of</strong> brand-only<br />

stores (see Page 47 and Page 57).<br />

Whereas in 2003, a list <strong>of</strong> jewellery stores in each<br />

centre would have included many small, familyrun<br />

jewellery businesses, 20 years later, most have<br />

vacated <strong>the</strong> shopping centres. This could be because<br />

<strong>of</strong> retirement, leases ending or as a result <strong>of</strong> <strong>the</strong><br />

pandemic; however, <strong>the</strong>re is no doubt that it is also<br />

because <strong>of</strong> tenancy costs.<br />

Independent jewellers are less likely to be able to<br />

accommodate <strong>the</strong> lease and fit-out expenses <strong>of</strong> <strong>the</strong><br />

capital city centres - regional and rural centres can be<br />

different - and have been ‘pushed out’ by <strong>the</strong> chains.<br />

Fur<strong>the</strong>r, as <strong>the</strong> current research indicates, <strong>the</strong>re has<br />

been a large increase in <strong>the</strong> number <strong>of</strong> brand-only<br />

stores (see PAGE 51), including some very high-pr<strong>of</strong>ile<br />

international brands such as Tiffany & Co, Van Cleef<br />

& Arpels, Piaget and so on.<br />

One only needs to look at <strong>the</strong> jewellery and watch<br />

stores at Chadstone in Melbourne or Centrepoint<br />

in Sydney to understand that a traditional ‘family<br />

jeweller’ would have difficulty competing with<br />

international brands/conglomerates.<br />

Two decades later, this raw data does not highlight<br />

<strong>the</strong> loss or demise <strong>of</strong> <strong>the</strong> independent jewellers in<br />

Australia’s capital city shopping centres.<br />

72


JAA: The past is haunting,<br />

and <strong>the</strong> future is unclear<br />

The past 13 years have been brutal for <strong>the</strong> Jewellers Association <strong>of</strong><br />

Australia – and much <strong>of</strong> <strong>the</strong> damage has been self-inflicted.<br />

The Jeweller’s Association <strong>of</strong> Australia (JAA) began<br />

<strong>the</strong> new decade in good shape, bolstered by strong<br />

membership figures and largely respected leadership.<br />

With little doubt, <strong>the</strong> JAA could claim <strong>the</strong> title <strong>of</strong> ‘peak<br />

industry body’.<br />

That was in 2010 when it had nearly 1,000 members,<br />

and its retail membership accounted for 1,039 jewellery<br />

stores across Australia; however, in a few short years,<br />

it fell apart to <strong>the</strong> extent that <strong>the</strong> organisation today is a<br />

shadow <strong>of</strong> its once proud, former self.<br />

In fact, things have become so dire that <strong>the</strong> JAA would not<br />

provide a precise membership figure for this study – and,<br />

as you will discover - refuses to answer basic questions<br />

to measure <strong>the</strong> support it has today against its heyday.<br />

This flies in <strong>the</strong> face <strong>of</strong> its new Mission and Vision<br />

statement.<br />

Indeed, <strong>the</strong> JAA no longer refers to itself as <strong>the</strong> ‘peak<br />

industry body’ and, as this research indicates, <strong>the</strong>re is<br />

nothing to suggest that <strong>the</strong> association can rightfully claim<br />

to represent <strong>the</strong> broader Australian jewellery trade.<br />

Not only is <strong>the</strong> current six-member board <strong>the</strong> most<br />

unrepresentative <strong>of</strong> <strong>the</strong> industry in at least three decades,<br />

it also fails its mission statement; which is to: “lead through<br />

<strong>the</strong> representation <strong>of</strong> <strong>the</strong> various sectors <strong>of</strong> <strong>the</strong> jewellery<br />

industry and <strong>the</strong>ir interests.” (See page 76).<br />

There are many reasons why <strong>the</strong> JAA fell from grace,<br />

which can explain why its current retail members account<br />

for around 356 stores, a 73 per cent collapse since 2010.<br />

And that is just retail membership - <strong>the</strong> supply (wholesale)<br />

members have deserted <strong>the</strong> organisation in droves.<br />

The JAA’s decision to sever ties with Expertise Events<br />

in 2016 and its attempt to launch its own competing<br />

jewellery fair provided a tipping point in its decline. The<br />

turmoil created by <strong>the</strong> JAA has been documented at<br />

length, and for <strong>the</strong> sake <strong>of</strong> brevity, this report will not<br />

detail that topic or o<strong>the</strong>r JAA controversies in-depth.<br />

With that said, this report can reveal one previously<br />

CHART 2: JAA MEMBERS 2010 V 2023<br />

359<br />

1,039<br />

607<br />

860<br />

2,010<br />

2,699<br />

The above chart shows how <strong>the</strong> buying groups have<br />

overtaken <strong>the</strong> JAA as a percentage <strong>of</strong> <strong>the</strong> wider industry<br />

since 2010, and which correlates to <strong>the</strong> industry survey.<br />

CHART 1: JAA MEMBERSHIP DECLINE FROM 2010 - 2023<br />

1000<br />

900<br />

800<br />

700<br />

600<br />

500<br />

400<br />

300<br />

'10 '12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '22 '23<br />

Chart shows <strong>the</strong> decline <strong>of</strong> JAA membership from 2010 to 2023. The figure highlighted in red is <strong>the</strong> point where <strong>the</strong> JAA chose to<br />

end its 25-year sponsorship agreement with Expertise Events that had earned it $1,1555,005 in cash over <strong>the</strong> previous 10 years.*<br />

2023 membership figure is a calculation because <strong>the</strong> association would not supply <strong>the</strong> information.<br />

unknown detail in <strong>the</strong> catastrophic decision that divided<br />

<strong>the</strong> industry for two years - <strong>the</strong> size <strong>of</strong> Expertise Events’<br />

financial commitment to <strong>the</strong> JAA at <strong>the</strong> time.<br />

For <strong>the</strong> ten years before <strong>the</strong> 2016 jewellery fair,<br />

Expertise Events paid <strong>the</strong> JAA $1,155,005 in cash<br />

and around an additional $100,000 in non-cash<br />

support and sponsorship.<br />

Put in perspective, <strong>the</strong> JAA had earned more than<br />

$1.2 million by lending its name to Expertise Events in<br />

return for its financial support - noting that its effort was<br />

negligible, and its risk non-existent. The JAA ended this<br />

partnership on its own accord and as this study shows,<br />

it has not recovered since.<br />

Unpr<strong>of</strong>essional management<br />

The study deals with data first and foremost, documenting<br />

<strong>the</strong> rises and falls within <strong>the</strong> trade’s many sectors. In terms<br />

<strong>of</strong> <strong>the</strong> JAA, two sets <strong>of</strong> data are particularly interesting<br />

– membership and finance; however, <strong>the</strong> JAA has been<br />

unwilling or incapable <strong>of</strong> providing an accurate membership<br />

number. Its financial records remain on <strong>the</strong> public record;<br />

however, <strong>the</strong> JAA’s membership figures are no longer.<br />

The matter is <strong>of</strong> sufficient concern to warrant detailed<br />

reporting on <strong>the</strong> JAA’s lack <strong>of</strong> transparency. It should<br />

be noted that its mission statements reads: “We<br />

are committed to ethics by way <strong>of</strong> demonstrating<br />

pr<strong>of</strong>essionalism, transparency and fairness in our<br />

dealings and conduct.”<br />

As background, in February, president Joshua Sharp was<br />

contacted about <strong>the</strong> JAA’s financial reporting. During<br />

this exchange, and 10 months ahead <strong>of</strong> time, Sharp was<br />

informed that a SOIR would be published in December.<br />

At <strong>the</strong> time, a request was made for <strong>the</strong> JAA’s most<br />

recent membership figures. Sharp did not provide<br />

precise information; however, he did advise that <strong>the</strong><br />

JAA had "approximately 400 members in 2022".<br />

Given this occurred well before <strong>the</strong> publication <strong>of</strong> this<br />

report, <strong>the</strong> figure, while not exact, was accepted.<br />

In July, during <strong>the</strong> research stage <strong>of</strong> <strong>the</strong> collapse <strong>of</strong><br />

Everledger, Jeweller contacted <strong>the</strong> JAA about a specific<br />

member in Queensland. The website <strong>of</strong> this business not<br />

only lists itself as a JAA member it goes as far as having a<br />

copy <strong>of</strong> <strong>the</strong> association’s Code <strong>of</strong> Conduct on its website.<br />

Despite this apparent support for (and promotion <strong>of</strong>) <strong>the</strong><br />

JAA, <strong>the</strong> Queensland business is not listed in <strong>the</strong> JAA’s<br />

online Member Directory. For that reason, Jeweller<br />

contacted <strong>the</strong> association to confirm whe<strong>the</strong>r <strong>the</strong> business<br />

was a member or was misusing <strong>the</strong> JAA’s logo.<br />

On 12 July, this matter was raised with operations<br />

manager Megan Young, who replied <strong>the</strong> following day,<br />

confirming that <strong>the</strong> business is a current member <strong>of</strong><br />

<strong>the</strong> association and clarifying that “not all members<br />

appear in <strong>the</strong> online directory.”<br />

This raised an obvious question – why aren’t all<br />

members in <strong>the</strong> online directory? There could be a<br />

legitimate reason why a small number <strong>of</strong> members<br />

might not want to publicise <strong>the</strong>ir membership to <strong>the</strong><br />

JAA, such as security concerns.<br />

However, in <strong>the</strong> case <strong>of</strong> this specific member – <strong>the</strong><br />

business’ connection with <strong>the</strong> JAA is detailed in-depth<br />

on its website. So why are <strong>the</strong>y not in <strong>the</strong> directory?<br />

Jeweller sought clarification from Young on whe<strong>the</strong>r<br />

<strong>the</strong>re had been an oversight or error in <strong>the</strong> online<br />

directory. This clarification was needed because <strong>the</strong><br />

JAA Member Directory has many errors in <strong>the</strong> form<br />

<strong>of</strong> blank records. The email also requested <strong>the</strong> latest<br />

membership figures, given that <strong>the</strong> Members Directory<br />

was evidently not a reliable source for that information.<br />

This request was made on 13 July, <strong>the</strong> same day <strong>the</strong> JAA<br />

informed Jeweller that not all members are listed on <strong>the</strong><br />

directory. Young didn’t reply; <strong>the</strong>refore, <strong>the</strong> request was<br />

resubmitted <strong>the</strong> following day (14 July), and again, <strong>the</strong>re<br />

was no reply.<br />

On 1 September, Jeweller contacted Young again,<br />

providing advance notice <strong>of</strong> <strong>the</strong> publication <strong>of</strong> this study,<br />

and again requested updated membership details.<br />

After a week <strong>of</strong> no reply, <strong>the</strong> request was resubmitted.<br />

73


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

JEWELLERS ASSOCIATION<br />

DIVING INTO THE SURVEY RESULTS<br />

What does <strong>the</strong> industry think <strong>of</strong> <strong>the</strong> JAA?<br />

During <strong>the</strong> completion <strong>of</strong> this qualitative analysis,<br />

Jeweller conducted a quantitative survey <strong>of</strong><br />

independent jewellers and a second <strong>of</strong> industry<br />

suppliers. The surveys garnered more than 250<br />

responses - see page 77 - which amounts to<br />

about 10 per cent <strong>of</strong> each market.<br />

The two sectors were provided with ten questions<br />

covering various topics about <strong>the</strong>ir beliefs and<br />

attitudes to specific issues, including <strong>the</strong> JAA.<br />

Under a Likert scale, respondents were asked<br />

whe<strong>the</strong>r <strong>the</strong>y ‘strongly agreed’, ‘agreed’, ‘nei<strong>the</strong>r<br />

agreed nor disagreed’, ‘disagreed’, or ‘strongly<br />

disagreed’ to various prompts.<br />

The following was put forward: Membership to a buying<br />

group <strong>of</strong>fers more benefits than membership to <strong>the</strong> JAA.<br />

Of <strong>the</strong> respondents who had an opinion, more than<br />

43 per cent <strong>of</strong> retail respondents said <strong>the</strong>y ‘strongly<br />

agreed’ or ‘agreed’ while only 12.5 per cent said <strong>the</strong>y<br />

‘strongly disagreed’ or ‘disagreed’. This indicates that<br />

jewellery retailers do not see much benefit in <strong>the</strong> JAA<br />

compared to buying group membership.<br />

This observation is supported by Table 2, which<br />

records <strong>the</strong> buying groups as representing 69 per cent<br />

more stores than <strong>the</strong> JAA. The second prompt was<br />

as follows: 'The JAA is my first point <strong>of</strong> contact for<br />

business advice and retail best practice.'<br />

About 21 per cent <strong>of</strong> respondents said <strong>the</strong>y ‘strongly<br />

agreed’ or ‘agreed’ while 58 per cent said <strong>the</strong>y<br />

‘strongly disagreed’ or ‘disagreed’.<br />

These findings are particularly concerning given <strong>the</strong><br />

JAA’s recent re-drafting <strong>of</strong> its Mission and Vision<br />

statement detailing <strong>the</strong> organisation’s ‘core values’,<br />

one <strong>of</strong> which states: 'We aim to be a reliable and<br />

knowledgeable source <strong>of</strong> education for consumers<br />

and <strong>the</strong> industry.'<br />

The intrigue behind <strong>the</strong>se results is two-fold. While <strong>the</strong><br />

critical insight is that <strong>the</strong> perception <strong>of</strong> <strong>the</strong> JAA and its<br />

board is negative, <strong>the</strong> more important note is that <strong>the</strong>re<br />

was an over-representation <strong>of</strong> JAA members in <strong>the</strong><br />

survey results.<br />

That is, while it has been shown that <strong>the</strong> JAA<br />

membership base only accounts for around 10 per cent<br />

<strong>of</strong> all jewellery stores, JAA retail members comprised<br />

29 per cent <strong>of</strong> survey respondents.<br />

Explained ano<strong>the</strong>r way, one would think that a survey<br />

that was ‘dominated’ by JAA members would have<br />

provided a more encouraging result for <strong>the</strong> association.<br />

However, this is not a new issue for <strong>the</strong> JAA.<br />

The industry’s negative views <strong>of</strong> <strong>the</strong> association are<br />

consistent with a previous qualitative (telephone)<br />

survey <strong>of</strong> 100 JAA and 100 non-JAA members in 2017.<br />

In fact, <strong>the</strong> second question <strong>of</strong> <strong>the</strong> 2023 survey was<br />

a ‘check question’. Namely, <strong>the</strong> same question was<br />

asked in 2017 because it formed part <strong>of</strong> <strong>the</strong> JAA’s<br />

(<strong>the</strong>n) mission statement.<br />

When <strong>the</strong> following question was asked six years ago:<br />

The JAA is my first point <strong>of</strong> contact for best practice<br />

advice for my business, 72 per cent <strong>of</strong> JAA members<br />

disagreed, while 63 per cent <strong>of</strong> non-members<br />

disagreed.<br />

Extraordinarily, fewer members ‘agreed’ (23 per<br />

cent) that <strong>the</strong> JAA was <strong>the</strong> first point <strong>of</strong> contact than<br />

non-members (27 per cent), meaning that non-JAA<br />

members had a better perception <strong>of</strong> <strong>the</strong> JAA than its<br />

own members!<br />

Since March 2017, when <strong>the</strong> survey results were<br />

published under <strong>the</strong> title ‘JAA fails own Vision and<br />

Mission <strong>State</strong>ment’, membership has continued to fall.<br />

While <strong>the</strong> most recent survey did not investigate o<strong>the</strong>r<br />

matters concerning <strong>the</strong> JAA, it’s clear <strong>the</strong> perception <strong>of</strong><br />

<strong>the</strong> association remains problematic, even among its<br />

supporters.<br />

This continuing membership decline correlates to a<br />

survey question about membership fees. The result<br />

should have been a significant concern for <strong>the</strong> JAA at<br />

<strong>the</strong> time; however, <strong>the</strong> continuing decrease in members<br />

indicates <strong>the</strong> earlier results were accurate.<br />

Of those surveyed in 2017, fewer than 40 per cent <strong>of</strong><br />

members were satisfied with how <strong>the</strong> JAA supports <strong>the</strong>ir<br />

business. Given <strong>the</strong>se previous survey results, it is easy to<br />

see why retailers see membership to a buying group as<br />

<strong>of</strong>fering more benefits than membership to <strong>the</strong> JAA.<br />

Do suppliers report similar feelings about <strong>the</strong> JAA as<br />

retailers? Suppliers were surveyed on <strong>the</strong> same question<br />

as retailers: 'The JAA is my first point <strong>of</strong> contact for<br />

business advice and wholesaling best practice'.<br />

More than 65 per cent <strong>of</strong> supplier respondents said<br />

<strong>the</strong>y ‘strongly disagreed’ or ‘disagreed’ while a mere<br />

seven per cent ‘agreed’. More than 24 per cent <strong>of</strong><br />

supplier respondents are JAA members!<br />

Suppliers were also polled on a second issue; <strong>the</strong><br />

Membership to a buying group <strong>of</strong>fers more<br />

benefits than membershipto <strong>the</strong> Jewellers<br />

Association <strong>of</strong> Australia.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Disagree<br />

The Jewellers Association <strong>of</strong> Australia is<br />

my first point <strong>of</strong> contact for business advice<br />

and retail best practice.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Disagree<br />

5.83%<br />

6.80%<br />

18.45%<br />

25.24%<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40%<br />

Responses from retailers overwhelmingly value membership<br />

with a buying group over membership with <strong>the</strong> JAA.<br />

prompt was as follows: The JAA's support and<br />

promotion <strong>of</strong> industry wholesalers and suppliers is.<br />

Under a similar Likert scale with <strong>the</strong> following options:<br />

‘excellent’, ‘above average’, ‘average’, ‘below average’,<br />

and ‘poor’. More than 84 per cent <strong>of</strong> respondents<br />

answered ‘poor’ to ‘average’ while 15 per cent said it<br />

was ‘excellent’ to ‘above average’.<br />

Ano<strong>the</strong>r core value <strong>of</strong> <strong>the</strong> association, as listed in its new<br />

Mission and Mission statements, reads: 'We lead through<br />

representation <strong>of</strong> <strong>the</strong> various sectors <strong>of</strong> <strong>the</strong> jewellery<br />

industry and <strong>the</strong>ir interests.'<br />

The survey results would suggest that <strong>the</strong> supply<br />

sector feels somewhat ‘neglected’, an issue which is<br />

fur<strong>the</strong>r complicated by <strong>the</strong> current make-up <strong>of</strong> <strong>the</strong><br />

board (see page 76), which details that all industry<br />

directors are small retailers.<br />

It should be reiterated that <strong>the</strong>se results come from<br />

a survey where JAA members were over-represented<br />

and could <strong>of</strong>fer some explanation for <strong>the</strong> decline in<br />

supplier membership.<br />

» Publishers note: As a matter <strong>of</strong> transparency, it should be<br />

noted that when this publication was launched in 1996, and<br />

until 2017, it was <strong>the</strong> <strong>of</strong>ficial magazine <strong>of</strong> <strong>the</strong> JAA. It was a<br />

time when <strong>the</strong> association boasted more than 1,000 retail<br />

and wholesale members, and Jeweller played a vital part in<br />

<strong>the</strong> membership benefits, contributing tens <strong>of</strong> thousands <strong>of</strong><br />

dollars annually to <strong>the</strong> JAA for 20 years. The results <strong>of</strong> <strong>the</strong><br />

2017 survey, as mentioned above, played a significant part<br />

in <strong>the</strong> decision to end Jeweller’s support for and financial<br />

backing <strong>of</strong> <strong>the</strong> JAA.<br />

The Jewellers Association <strong>of</strong> Australia (JAA)<br />

is my first point <strong>of</strong> contact for business advice<br />

and wholesaling best practice.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

The JAA's support and promotion <strong>of</strong><br />

industry wholesalers and suppliers is:<br />

Excellent<br />

Above<br />

Average<br />

Average<br />

Below<br />

Average<br />

Very Poor<br />

Disagree<br />

Strongly<br />

Disagree<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40%<br />

Suppliers surveyed expressed disapproval <strong>of</strong> <strong>the</strong> JAA's<br />

representation <strong>of</strong> suppliers and wholesalers.<br />

74


2010 VS 2023<br />

JAA Marketshare<br />

This time, Young, who has been with <strong>the</strong> JAA since<br />

2007, replied <strong>the</strong> same day, explaining, “Due to<br />

numerous conflicting priorities in <strong>the</strong> previous few<br />

months, I have been unable to reply to your emails. I<br />

will endeavour to look at <strong>the</strong>m sometime next week.”<br />

Since that date three months ago, <strong>the</strong> JAA has failed to<br />

supply its membership data, raising serious questions<br />

about its commitment to transparency.<br />

It is puzzling that someone who has been with <strong>the</strong><br />

JAA for more than 15 years - and would handle monthly<br />

reporting to <strong>the</strong> board – would not have this information<br />

readily accessible. The JAA is, after all, a membershipbased<br />

organisation.<br />

Compare this pr<strong>of</strong>essionalism with that <strong>of</strong> several<br />

equivalent international jewellery associations.<br />

Unable to obtain this simple information from <strong>the</strong><br />

JAA, comparable associations in <strong>the</strong> US, <strong>the</strong> UK, and<br />

Canada were contacted about <strong>the</strong>ir membership data.<br />

The National Association <strong>of</strong> Jewellers in <strong>the</strong> UK<br />

responded within four hours with precise membership<br />

figures (2400). The Canadian Jewellers Association<br />

responded within eight hours (560), while <strong>the</strong> American<br />

Gem Society replied within 24 hours, asking for a<br />

deadline and more information about <strong>the</strong> story –<br />

understandable given <strong>the</strong> distance between Australia<br />

and <strong>the</strong> US!<br />

What must be said, however, is that <strong>the</strong> JAA’s apparent<br />

complete lack <strong>of</strong> interest in this report – a study that<br />

<strong>the</strong> association should arguably be undertaking itself –<br />

is perplexing at best.<br />

What is <strong>the</strong> membership number?<br />

Given that <strong>the</strong> JAA would not provide <strong>the</strong> requested<br />

information, Jeweller used <strong>the</strong> information published on<br />

<strong>the</strong> JAA’s website under <strong>the</strong> ‘Find a JAA jeweller’ function.<br />

This takes users to a JAA Member Directory page,<br />

which states: ‘Trust all your valued jewellery purchases<br />

to a JAA member - when you shop at a Jewellers<br />

Association <strong>of</strong> Australia member store, you can<br />

be assured that you are working with some <strong>of</strong> <strong>the</strong><br />

most knowledgeable and trustworthy jewellery retail<br />

pr<strong>of</strong>essionals in <strong>the</strong> industry.’<br />

This is an unusual statement, given that <strong>the</strong> JAA Member<br />

Directory page aims to direct consumers to members’<br />

stores via a link to ano<strong>the</strong>r page. However, this website<br />

page has been non-functional for at least two years. The<br />

website meant to promote JAA members to <strong>the</strong> public -<br />

as a member benefit - displays an error message!<br />

So much for its mission statement about aiming ‘to be<br />

a reliable and knowledgeable source <strong>of</strong> education for<br />

consumers and <strong>the</strong> industry’.<br />

It should be noted that <strong>the</strong> Member Directory page<br />

contains around 400 records, some <strong>of</strong> which were<br />

blank or faulty when ‘exported’. Removing irrelevant<br />

and faulty data reduced <strong>the</strong> member list to 384 records.<br />

Of <strong>the</strong>se, more than 30 are suppliers and 'o<strong>the</strong>r'<br />

members such as valuers and o<strong>the</strong>r associations.<br />

This leaves a final tally <strong>of</strong> 356 store listings. Note<br />

that 12 per cent <strong>of</strong> <strong>the</strong>se member stores is held by<br />

two medium-sized chains with more than 40 stores<br />

combined – Bevilles and Salera’s.<br />

Dubious claim?<br />

This retail membership information flies in <strong>the</strong> face <strong>of</strong><br />

ano<strong>the</strong>r JAA claim and calls its corporate governance<br />

into question. If <strong>the</strong> JAA’s member directory page is<br />

up-to-date - and <strong>the</strong>re should be no reason to believe<br />

it isn’t - and <strong>the</strong> number <strong>of</strong> member stores is 356,<br />

<strong>the</strong>n it's difficult to explain why <strong>the</strong> website boasts a<br />

membership <strong>of</strong> "around 650 outlets".<br />

An outlet is not a member; it is a retail store. Therefore,<br />

<strong>the</strong> JAA does not have "around 650 outlets". If, on <strong>the</strong><br />

o<strong>the</strong>r hand, <strong>the</strong> JAA wants to suggest that all members<br />

are ‘outlets’, it cannot claim <strong>the</strong> figure <strong>of</strong> 650 ei<strong>the</strong>r.<br />

This study cannot determine how <strong>the</strong> JAA’s statement<br />

is true, <strong>the</strong>refore <strong>the</strong> JAA’s website is inaccurate or<br />

misrepresented.<br />

Regardless <strong>of</strong> this lack <strong>of</strong> transparency, <strong>the</strong>re were<br />

4,225 jewellery stores in Australia in 2010, meaning<br />

that <strong>the</strong> JAA previously represented 25 per cent<br />

(1,039 stores) <strong>of</strong> <strong>the</strong> market.<br />

Today, with 3,501 stores - and using <strong>the</strong> JAA’s<br />

membership data - its numbers have collapsed to<br />

under 10 per cent. See table.<br />

Again, if <strong>the</strong> member directory page is current, and<br />

after deleting duplicate (store) records, <strong>the</strong> confusing<br />

website information indicates a total membership <strong>of</strong><br />

316, including suppliers and ‘o<strong>the</strong>r’ members.<br />

Therefore, whichever way <strong>the</strong> figures are analysed,<br />

it’s hard to conclude that <strong>the</strong> JAA has ‘around 650<br />

outlets’. It also contradicts Sharp’s claim <strong>of</strong> around<br />

400 members – although this advice was provided<br />

10 months ago.<br />

The o<strong>the</strong>r explanation is that around 80-90 members<br />

have requested not to be listed on <strong>the</strong> JAA website.<br />

It’s a little difficult to imagine why 25 per cent <strong>of</strong><br />

businesses do not want to be listed as a member.<br />

There are o<strong>the</strong>r explanations: <strong>the</strong> website is wrong;<br />

it is missing members that should be listed, or, Sharp<br />

could be wrong; <strong>the</strong> JAA did not, or no longer has<br />

“around 400 members”.<br />

Ei<strong>the</strong>r way, this confusion could have been avoided if<br />

Young had provided <strong>the</strong> information - she had three<br />

months to do so - just like o<strong>the</strong>r (overseas) jewellery<br />

associations were able to do, within hours.<br />

Interestingly, one <strong>of</strong> <strong>the</strong> core values <strong>of</strong> its new mission<br />

statement is to ‘create unity and collaboration through<br />

a preparedness to work with all stakeholders for <strong>the</strong><br />

benefit and progression <strong>of</strong> <strong>the</strong> jewellery industry’.<br />

No longer Australia’s peak industry body<br />

The first thing to note about <strong>the</strong> JAA’s recently<br />

re-issued Mission and Vision statement is that it’s<br />

unclear whe<strong>the</strong>r <strong>the</strong> JAA sees itself as - or claims<br />

to be - <strong>the</strong> ‘peak industry body’.<br />

This term no longer appears on <strong>the</strong> JAA website and<br />

does not appear in its new mission statement.<br />

The purpose <strong>of</strong> a mission statement is to document<br />

an organisation's goals, values, and objectives. The<br />

aim is to help an organisation (company or association)<br />

respond to change and consistently make decisions<br />

that align with its goals and vision.<br />

The JAA ‘About Us’ page was recently changed to reflect<br />

<strong>the</strong> new mission statement, which differs dramatically<br />

from previous versions.<br />

The previous statement was clear: ‘To be <strong>the</strong> peak<br />

industry body that represents greater than 75 per cent<br />

<strong>of</strong> industry participants’. However, ‘peak industry body’<br />

has been removed. Why?<br />

JAA<br />

19.7%<br />

All jewellery<br />

80.3%<br />

The above charts compare <strong>the</strong> JAA’s member stores to <strong>the</strong><br />

total number <strong>of</strong> Australian jewellery stores. In 2010 JAA<br />

members accounted for almost 20 per cent share <strong>of</strong> <strong>the</strong><br />

market which has fallen to less than 10 per cent by 2023.<br />

One explanation could be that it has failed its previous<br />

objective - membership. Considering <strong>the</strong> current<br />

circumstances, <strong>the</strong> JAA’s aim <strong>of</strong> representing threequarters<br />

<strong>of</strong> <strong>the</strong> entire industry cannot be supported<br />

by any level <strong>of</strong> logic.<br />

This is not to suggest that organisations should not<br />

set ambitious targets. High performance occurs in<br />

an environment defined by high expectations. As <strong>the</strong><br />

old saying goes, ‘aim for <strong>the</strong> moon, and you’ll land<br />

among <strong>the</strong> stars’.<br />

However, ambitious intentions are a double-edged<br />

sword; when organisations set l<strong>of</strong>ty targets and fail<br />

to reach <strong>the</strong>m, <strong>the</strong> injury is two-fold. There’s both <strong>the</strong><br />

disappointment <strong>of</strong> failing to achieve <strong>the</strong> objective and<br />

<strong>the</strong> embarrassment <strong>of</strong> making your intentions clear<br />

and failing to live up to <strong>the</strong>m.<br />

With that said, clearly, <strong>the</strong> JAA has not been able to<br />

achieve anything near <strong>the</strong> 75 per cent target it once<br />

set itself. For example, <strong>the</strong> 2010 SOIR recorded <strong>the</strong><br />

association as having 960 members, with its retail<br />

members accounting for 1,039 individual jewellery<br />

stores - one member can have many stores.<br />

If <strong>the</strong> current membership is 316 – this is a decline <strong>of</strong><br />

around 67 per cent. It’s worse for its store ‘membership’,<br />

which has plummeted from 1,039 in 2010 to about 356<br />

(as listed on its website) - a shocking 66 per cent fall.<br />

The JAA claims to cover ‘all areas <strong>of</strong> <strong>the</strong> jewellery industry<br />

– from manufacturing, wholesaling, distribution to retail’.<br />

In 2010, when <strong>the</strong> JAA had 960 members, 69 per<br />

cent were retail members. Even though it lists three<br />

non-retail sectors - manufacturing, wholesaling, and<br />

distribution - suppliers accounted for only 31 per cent<br />

<strong>of</strong> <strong>the</strong> JAA membership base.<br />

If <strong>the</strong> member directory page is up to date, <strong>the</strong>n it<br />

appears that supplier membership accounts for fewer<br />

than 10 per cent <strong>of</strong> <strong>the</strong> current total membership.<br />

This could explain why <strong>the</strong> term ‘peak industry body’<br />

has been removed from its mission statement and<br />

demonstrates that <strong>the</strong> aim <strong>of</strong> representing 75 per cent<br />

<strong>of</strong> <strong>the</strong> industry was folly. It could also explain why <strong>the</strong><br />

industry survey results (see page 74) do not paint <strong>the</strong><br />

JAA in a positive light.<br />

75


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

JEWELLERS ASSOCIATION<br />

Is <strong>the</strong> current JAA board representative <strong>of</strong> <strong>the</strong> industry?<br />

There was ano<strong>the</strong>r change to <strong>the</strong> JAA’s board <strong>of</strong> directors<br />

in October - <strong>the</strong> third in 12 months. As a result, <strong>the</strong> JAA<br />

board has never been less representative <strong>of</strong> <strong>the</strong> overall<br />

industry in <strong>the</strong> past three decades than it is today.<br />

The board consists <strong>of</strong> four small retailers and two<br />

individuals who do not work in <strong>the</strong> industry.<br />

Yet, <strong>the</strong> JAA’s Mission and Vision statements claim<br />

to cover ‘all areas <strong>of</strong> <strong>the</strong> jewellery industry – from<br />

manufacturing, wholesaling, distribution to retail’.<br />

There are no directors representing <strong>the</strong> manufacturing,<br />

wholesaling, or distribution sectors, as has traditionally<br />

been <strong>the</strong> case and which was stipulated under <strong>the</strong><br />

previous Constitution.<br />

In November 2022, a special resolution to amend <strong>the</strong><br />

JAA Constitution was passed to allow <strong>the</strong> alteration <strong>of</strong><br />

<strong>the</strong> board's composition. It effectively means that <strong>the</strong><br />

board can be composed <strong>of</strong> 'anyone', which is how <strong>the</strong><br />

current board can fairly be described as unrepresentative<br />

<strong>of</strong> <strong>the</strong> industry.<br />

Following <strong>the</strong> resignation <strong>of</strong> Jo Tory, a former JAA<br />

president, in October, <strong>the</strong> board did not have a director<br />

representing suppliers (wholesaling). Tory operates Najo,<br />

a jewellery supply/wholesale business that once enjoyed a<br />

high pr<strong>of</strong>ile in <strong>the</strong> industry.<br />

She joined <strong>the</strong> board in 2017 and was president from<br />

2019 to 2021, having taken over <strong>the</strong> presidency from<br />

Selwyn Brandt - ano<strong>the</strong>r supply sector member.<br />

As previously documented, <strong>the</strong> buying groups now hold<br />

a far more critical position in <strong>the</strong> industry than <strong>the</strong> JAA -<br />

both in terms <strong>of</strong> membership and reputation -. Yet, <strong>the</strong>re<br />

is no director representing buying groups (see page 39).<br />

Additionally, in terms <strong>of</strong> o<strong>the</strong>r retail categories, <strong>the</strong>re is no<br />

director representing chain stores, and <strong>the</strong>re is also no<br />

director representing distribution, ano<strong>the</strong>r critical sector<br />

according to its mission statement.<br />

In past years, <strong>the</strong> board had members who operated<br />

chain stores. It has also had buying group representation<br />

via George Proszkowiec from Showcase Jewellers and<br />

Colin Pocklington from Nationwide.<br />

Proszkowiec resigned in September 2019, and<br />

Pocklington quit <strong>the</strong> board as well as <strong>the</strong> JAA in 2016 -<br />

after a 25-year association - following <strong>the</strong> indecorous<br />

claims by <strong>the</strong>n president Brandt, vice president Laura<br />

Moore (nee Laura Sawade) and <strong>the</strong>n CEO Amanda<br />

Trotman (nee Amanda Hunter).<br />

Mystery in <strong>the</strong> making<br />

A review <strong>of</strong> <strong>the</strong> board make-up dating back to 2010 and<br />

earlier shows that <strong>the</strong>re was always an endeavour to have<br />

<strong>the</strong> various sectors represented; however, <strong>the</strong> current<br />

board makeup is curious, with four current directors<br />

owning small jewellery stores, two <strong>of</strong> which<br />

are considered ‘retailer no-storefront’ (see page 16).<br />

Directors Cameron Marks and Daniel Anania operate<br />

‘upstairs’ style jewellery businesses in Sydney CBD<br />

<strong>of</strong>fice buildings - Percy Marks and Anania Jewellers,<br />

respectively.<br />

On <strong>the</strong> o<strong>the</strong>r hand, President Joshua Sharp and vice<br />

president Ronnie Bauer operate small traditional ‘high<br />

street’ style jewellery businesses (with storefronts).<br />

Bauer’s Klepners is in <strong>the</strong> Melbourne CBD, and Ian<br />

Sharpe Jewellers is in Toorak.<br />

Following Tory's departure in October, <strong>the</strong> JAA appointed<br />

Mary Storch. Not only is her appointment a mystery, given<br />

MEREDITH DOIG<br />

JAA DIRECTOR<br />

MARY STORCH<br />

JAA DIRECTOR<br />

that <strong>the</strong> board has no representatives from <strong>the</strong> sectors<br />

it claims to represent (manufacturing, wholesaling,<br />

distribution), but Storch is also a retiree.<br />

According to <strong>the</strong> JAA website, she has not worked in <strong>the</strong><br />

industry since 2002, leaving <strong>the</strong> “jewellery trade due to<br />

personal family commitments”.<br />

Storch’s new appointment is even more curious, given<br />

that Meredith Doig is not employed in <strong>the</strong> industry. She is a<br />

co-opted director listed as ‘pr<strong>of</strong>essional company director<br />

and governance consultant’.<br />

This means two directors do not have day-to-day senior<br />

management positions in <strong>the</strong> jewellery industry.<br />

Fur<strong>the</strong>r, Doig’s appointment in September <strong>of</strong> 2022 was<br />

not without controversy. She has commercial dealings<br />

with Bauer and, in November <strong>of</strong> 2022, was ‘caught out’<br />

not declaring <strong>the</strong> possible conflict <strong>of</strong> interest when asked<br />

about her appointment.<br />

At <strong>the</strong> time, she initially explained her new position this<br />

way: “I was approached because <strong>the</strong>re was a vacancy<br />

on <strong>the</strong> board. Somebody who has expertise in board<br />

governance is what <strong>the</strong>y were looking for, and that’s<br />

why <strong>the</strong>y approached me”.<br />

The statement was important because Doig had<br />

confirmed she was <strong>of</strong>fered and accepted <strong>the</strong> position<br />

because <strong>of</strong> her board and corporate governance<br />

experience.<br />

Her biography on <strong>the</strong> JAA website mentions that she is a<br />

Fellow <strong>of</strong> <strong>the</strong> Australian Institute <strong>of</strong> Company Directors<br />

(AICD) and taught <strong>the</strong>ir flagship Company Directors<br />

Course for five years.<br />

When questioned fur<strong>the</strong>r, Doig confirmed that her position<br />

as director was unpaid (voluntary) and that it was JAA vice<br />

president Ronnie Bauer specifically who had approached<br />

her to join <strong>the</strong> board.<br />

“We have been friends since 2016,” she explained. It soon<br />

became apparent that Doig was not entirely forthcoming<br />

in her explanation about <strong>the</strong> ‘relationship’. Records from<br />

<strong>the</strong> Australian Security Investments Commission (ASIC)<br />

paint a different picture <strong>of</strong> <strong>the</strong> ‘friendship’ between Doig<br />

and Bauer.<br />

Jeweller sought fur<strong>the</strong>r clarification, and Doig was<br />

asked if her friendship extends to o<strong>the</strong>r areas, including<br />

pr<strong>of</strong>essional and/or business. She was also asked if she<br />

currently represents or acts for any <strong>of</strong> Bauer's private<br />

companies in any capacity, including formal positions.<br />

Only <strong>the</strong>n did she admit to fur<strong>the</strong>r ‘dealings’ with Bauer:<br />

“Yes, I am company secretary <strong>of</strong> Klepners.”<br />

Jeweller has previously noted that <strong>the</strong>re is no assertion<br />

that anything untoward has occurred regarding this board<br />

appointment.<br />

However, based on Doig’s self-promoted level <strong>of</strong><br />

governance and ethics expertise, <strong>the</strong>re was confusion<br />

about her hesitancy and/or delay in transparently<br />

admitting that she also serves as company secretary in<br />

<strong>the</strong> private business <strong>of</strong> <strong>the</strong> vice president <strong>of</strong> <strong>the</strong> JAA.<br />

In addition, Doig’s previous statement casts doubt on<br />

her claim that she is 'someone who is from outside <strong>of</strong><br />

<strong>the</strong> industry’ given she has provided services to Bauer’s<br />

jewellers business, Klepner’s, since 2016. It is worth<br />

noting that this information has yet to be reflected on <strong>the</strong><br />

JAA website as a matter <strong>of</strong> transparency - and governance<br />

- to its members.<br />

The big picture<br />

While <strong>the</strong> JAA goes to great lengths to promote its claims<br />

as representing <strong>the</strong> Australian jewellery industry's<br />

manufacturing, wholesaling, and distribution sectors, <strong>the</strong><br />

recent decision to appoint a second person who does not<br />

currently work in <strong>the</strong> industry and has not done so for two<br />

decades is intriguing. Especially so given o<strong>the</strong>r sectors are<br />

unrepresented.<br />

Despite this claim, <strong>the</strong> board consists <strong>of</strong> two individuals<br />

who own or manage small ‘high street’ jewellery stores,<br />

two who own or operate ‘no storefront’ businesses, and<br />

two who do not work in <strong>the</strong> industry. And, <strong>of</strong> <strong>the</strong> six people,<br />

two - Bauer and Doig - are commercially linked.<br />

Readers can make <strong>the</strong>ir judgement as to whe<strong>the</strong>r this is<br />

appropriate. Fur<strong>the</strong>r, it is reasonable to question whe<strong>the</strong>r<br />

<strong>the</strong> make-up <strong>of</strong> <strong>the</strong> current board is an ideal reflection <strong>of</strong><br />

<strong>the</strong> Australian jewellery industry.<br />

76


<strong>Industry</strong> survey:<br />

Surprising results!<br />

While this study deals with facts and figures, businesses are owned and managed by<br />

people. What do jewellers and suppliers say about <strong>the</strong> past, present, and <strong>the</strong> future?<br />

85%<br />

Percentage <strong>of</strong> responses<br />

to <strong>the</strong> industry survey that<br />

suggested <strong>the</strong> JAA gives<br />

little or no support to<br />

jewellery suppliers.<br />

These surveys are quantitative<br />

and not qualitative, meaning<br />

<strong>the</strong>y measure <strong>the</strong> number <strong>of</strong><br />

people with a belief, but not<br />

<strong>the</strong> reasoning for <strong>the</strong> belief.<br />

KEY FINDINGS: AT A GLANCE<br />

Very few responses to<br />

<strong>the</strong> retailers survey<br />

suggested that lab-created<br />

diamonds are an important<br />

part <strong>of</strong> <strong>the</strong>ir business.<br />

39%<br />

Percentage <strong>of</strong> responses to<br />

<strong>the</strong> retailers survey which<br />

indiciated business owners plan<br />

to retire or sell <strong>the</strong>ir business<br />

within <strong>the</strong> next five years.<br />

The <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong> is largely an<br />

examination <strong>of</strong> history, what has happened and<br />

what events occurred over <strong>the</strong> past decade that<br />

shape <strong>the</strong> industry today.<br />

Such a study <strong>of</strong>fers more fascination due to <strong>the</strong><br />

nature <strong>of</strong> <strong>the</strong> jewellery industry, which is <strong>of</strong>ten driven<br />

by trends and fads.<br />

In addition to <strong>the</strong> qualitative analysis, Jeweller<br />

considered it appropriate to gain industry<br />

participants' insight into <strong>the</strong>ir beliefs and attitudes to<br />

specific issues.<br />

Retailers and suppliers were provided with a set<br />

<strong>of</strong> 10 questions covering a wide range <strong>of</strong> topics.<br />

A question in <strong>the</strong> back <strong>of</strong> our minds pertained to<br />

business in a post-pandemic world: Is your business<br />

now more pr<strong>of</strong>itable than before <strong>the</strong> COVID-19<br />

pandemic? The results were quite surprising.<br />

Ano<strong>the</strong>r question confirmed a trend that we believed<br />

had been in place for some time: a shift back to <strong>the</strong><br />

original purpose <strong>of</strong> owning a jewellery store.<br />

Is custom-made and bespoke jewellery enjoying a<br />

revival? This was a common talking point among<br />

participants at this year's International Jewellery<br />

Fair - and now this survey appears to confirm <strong>the</strong>se<br />

suspicions.<br />

Many o<strong>the</strong>r questions related to matters are covered<br />

in depth in this report, including sustainability,<br />

provenance, and <strong>the</strong> importance <strong>of</strong> digital marketing.<br />

The survey sought to address broader industry<br />

sentiment about <strong>the</strong> state <strong>of</strong> <strong>the</strong> jewellery industry,<br />

testing ‘<strong>the</strong> pulse’ <strong>of</strong> respondents about <strong>the</strong> future <strong>of</strong><br />

<strong>the</strong> trade. Some responses were expected, but many<br />

were most surprising, if not unnerving!<br />

Lab-created diamonds have been one <strong>of</strong> <strong>the</strong> most<br />

passionately debated topics for many years, and yet,<br />

50 per cent <strong>of</strong> retailers who responded to <strong>the</strong> survey<br />

said <strong>the</strong>y are not important to <strong>the</strong>ir business.<br />

The answers have also painted a vivid picture <strong>of</strong> <strong>the</strong><br />

changing nature <strong>of</strong> <strong>the</strong> industry - more than 39 per<br />

cent <strong>of</strong> respondents advised that <strong>the</strong>y plan to sell<br />

<strong>the</strong>ir business or retire within <strong>the</strong> next five years.<br />

This would suggest that <strong>the</strong> evolution or 'changing <strong>of</strong><br />

<strong>the</strong> guard' within <strong>the</strong> industry is far from complete.<br />

This research is, <strong>of</strong> course, quantitative, not<br />

qualitative. This survey measures <strong>the</strong> number <strong>of</strong><br />

people who have a view or belief about a topic –<br />

but does not explain why <strong>the</strong>y feel that way.<br />

Generally speaking, a quantitative survey provides <strong>the</strong><br />

numbers (percentage <strong>of</strong> people) to assess or disprove<br />

a study's broad points.<br />

"The survey sought to<br />

address broader industry<br />

sentiment about <strong>the</strong> state<br />

<strong>of</strong> <strong>the</strong> jewellery industry,<br />

testing ‘<strong>the</strong> pulse’ <strong>of</strong><br />

respondents about <strong>the</strong><br />

future <strong>of</strong> <strong>the</strong> trade. "<br />

Qualitative data, on <strong>the</strong> o<strong>the</strong>r hand, provides<br />

<strong>the</strong> details and <strong>the</strong> depth to understand <strong>the</strong> full<br />

implications better.<br />

In o<strong>the</strong>r words, a quantitative survey can provide a<br />

snapshot <strong>of</strong> more significant issues that qualitative<br />

research can fur<strong>the</strong>r investigate.<br />

Ano<strong>the</strong>r difference is that it's not as easy to control<br />

<strong>the</strong> number <strong>of</strong> responses or respondents in a<br />

quantitative survey, which could result in over or<br />

under-representation.<br />

To that end, <strong>the</strong> retailer survey has an overrepresentation<br />

<strong>of</strong> JAA members at 29 per cent.<br />

As a percentage <strong>of</strong> Australian jewellery retail stores,<br />

<strong>the</strong> JAA retail membership is only about 10 per cent<br />

or even as low as seven per cent.<br />

However, and somewhat ironically, this overrepresentation<br />

delivers <strong>the</strong> JAA a damning message<br />

from retailers and a worse message from <strong>the</strong> survey <strong>of</strong><br />

<strong>the</strong> supplier/wholesaler channel.<br />

While <strong>the</strong> exact membership <strong>of</strong> suppliers/<br />

wholesalers to <strong>the</strong> JAA is a mystery, it is believed to<br />

be an insignificant figure compared to <strong>the</strong> number <strong>of</strong><br />

industry suppliers - large and small.<br />

That said, JAA supplier members are<br />

overrepresented in <strong>the</strong> survey at 25 per cent and,<br />

again, <strong>the</strong> message to <strong>the</strong> JAA is clear.<br />

About 85 per cent <strong>of</strong> respondents said <strong>the</strong> JAA gives<br />

little or no support to industry suppliers.<br />

Full report on Page 73.<br />

Regardless <strong>of</strong> both survey results, <strong>the</strong>y <strong>of</strong>fer an<br />

intriguing insight into <strong>the</strong> past decade and an even<br />

more exciting glimpse <strong>of</strong> <strong>the</strong> future.<br />

Methodology<br />

Two sets <strong>of</strong> 10 questions were created to<br />

survey retailers and suppliers.<br />

Many questions between <strong>the</strong> two groups<br />

were similar or identical as <strong>the</strong>y were equally<br />

relevant and important to each side. The<br />

surveys were undertaken using Survey Monkey,<br />

a digital research platform and emailed using<br />

Jeweller’s comprehensive database.<br />

The retailer survey began on 31 October and<br />

ended on 17 November with more than 200<br />

independent retailers responding, which is<br />

estimated to be around 10 per cent <strong>of</strong> <strong>the</strong><br />

market.<br />

The supplier survey was opened on 9<br />

November and closed on 17 November. It<br />

received 52 responses, which is estimated to<br />

be between 8-10 per cent <strong>of</strong> <strong>the</strong> market.<br />

77


The first thing to consider is that while <strong>the</strong>se<br />

survey questions are broad, some relate to<br />

ano<strong>the</strong>r topic as a type <strong>of</strong> ‘check question’.<br />

For example, <strong>the</strong> question about <strong>the</strong> importance<br />

<strong>of</strong> provenance to consumers is supported by <strong>the</strong><br />

question about eco-friendly and sustainability,<br />

so <strong>the</strong> two results can be compared.<br />

Lab-created diamonds feature heavily in<br />

mainstream media as being vital to consumers,<br />

but what is <strong>the</strong> reality on <strong>the</strong> retail ‘coalface’,<br />

where it matters? Question two can also be<br />

read against question eight, and it makes for an<br />

interesting result.<br />

Likewise, <strong>the</strong> perception <strong>of</strong> industry<br />

organisations is important to review, and it’s<br />

noteworthy that <strong>the</strong> buying groups are clearly<br />

held in high regard, while <strong>the</strong> reputation <strong>of</strong> <strong>the</strong><br />

Jewellers Association <strong>of</strong> Australia is in question.<br />

Digital marketing is ano<strong>the</strong>r interesting point <strong>of</strong><br />

contention. Consultants and experts all say it’s<br />

more important now than ever before; however,<br />

this survey suggests that retailers are yet to see<br />

a clear connection between sales and online<br />

marketing.<br />

My business is now more pr<strong>of</strong>itable than it was<br />

before <strong>the</strong> COVID-19 pandemic.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Disagree<br />

6.80%<br />

9.71%<br />

1<br />

26.21%<br />

29.13%<br />

28.16%<br />

0% 10% 20% 30% 40%<br />

2<br />

3<br />

4<br />

Custom-made jewellery has increasingly become an<br />

important part <strong>of</strong> my business in <strong>the</strong> past 5-10 years.<br />

Membership to a buying group <strong>of</strong>fers more<br />

benefits than membershipto <strong>the</strong> Jewellers<br />

Association <strong>of</strong> Australia.<br />

Lab-created diamond jewellery has become an<br />

important part <strong>of</strong> mybusiness in <strong>the</strong> past 10 years.<br />

Strongly<br />

Agree<br />

37.56%<br />

Strongly<br />

Agree<br />

18.45%<br />

Strongly<br />

Agree<br />

Agree<br />

39.51%<br />

Agree<br />

25.24%<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

13.17%<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

7.32%<br />

Disagree<br />

5.83%<br />

Disagree<br />

Strongly<br />

Disagree<br />

2.44%<br />

0% 10% 20% 30% 40%<br />

Strongly<br />

Disagree<br />

6.80%<br />

0% 10% 20% 30% 40%<br />

Strongly<br />

Disagree<br />

0% 10% 20% 30% 40%<br />

5<br />

6<br />

7<br />

My customers raise provenance (pro<strong>of</strong> <strong>of</strong> origin)<br />

issues when shopping for diamond<br />

and gemstone jewellery.<br />

My website and digital marketing activities<br />

generate a significant portion <strong>of</strong> sales for my<br />

bricks-and-mortar store.<br />

The Jewellers Association <strong>of</strong> Australia is<br />

my first point <strong>of</strong> contact for business advice<br />

and retail best practice.<br />

Always<br />

Very<br />

Frequently<br />

Occassionally<br />

Rarely<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Never<br />

Strongly<br />

Disagree<br />

Strongly<br />

Disagree<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40%<br />

8<br />

9<br />

10<br />

Lab-created diamond jewellery sales make up<br />

X per cent <strong>of</strong> my overall diamond jewellery sales.<br />

I intend to retire or sell my business<br />

within <strong>the</strong> next five years.<br />

My customers voice concerns about<br />

eco-friendly and sustainability issues.<br />

100%<br />

Strongly<br />

Agree<br />

Always<br />

75%<br />

50%<br />

25%<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Very<br />

Frequently<br />

Occassionally<br />

Rarely<br />

0%<br />

Strongly<br />

Disagree<br />

Never<br />

0% 10% 20% 30% 40%<br />

50%<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40%<br />

78


My business is now more pr<strong>of</strong>itable than it was<br />

before <strong>the</strong> COVID-19 pandemic.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Disagree<br />

1<br />

0% 10% 20% 30% 40%<br />

As you can see, more suppliers than retailers say<br />

<strong>the</strong>ir business is now more pr<strong>of</strong>itable than it was<br />

before <strong>the</strong> COVID-19 pandemic.<br />

Question two addresses product planning,<br />

ordering, and restocking by retailers which<br />

clearly remains tumultuous, with just 1.2 per<br />

cent <strong>of</strong> suppliers suggesting that this aspect <strong>of</strong><br />

<strong>the</strong> trade is in ‘excellent’ condition.<br />

It’s also interesting to compare suppliers’ issues<br />

about provenance and pro<strong>of</strong> <strong>of</strong> origin (question<br />

eight) to those <strong>of</strong> <strong>the</strong>ir customers. Lab-created<br />

diamonds remain a passionately debated topic<br />

within <strong>the</strong> diamond industry, for suppliers, it’s<br />

clearly <strong>of</strong> little concern.<br />

Suppliers also seem to have little regard for <strong>the</strong><br />

JAA’s support <strong>of</strong> <strong>the</strong> wholesaler sector, with<br />

around 85 per cent saying it is average to very<br />

poor. Suppliers also appear to hold Australia’s<br />

buying groups in high regard, with more than<br />

37 per cent <strong>of</strong> responses suggesting that <strong>the</strong>se<br />

groups <strong>of</strong>fer a valuable service to retailers.<br />

Interestingly, around 29 per cent <strong>of</strong> respondents<br />

say <strong>the</strong>y’d like to retire or sell <strong>the</strong>ir business in<br />

<strong>the</strong> next five years.<br />

2<br />

Product planning, ordering, and restocking by my<br />

retail customers and stockists is:<br />

3<br />

The Jewellers Association <strong>of</strong> Australia (JAA)<br />

is my first point <strong>of</strong> contact for business advice<br />

and wholesaling best practice.<br />

4<br />

Products that contain lab-created diamonds<br />

have become an important part <strong>of</strong> my business<br />

in <strong>the</strong> past 10 years.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Disagree<br />

Strongly<br />

Disagree<br />

Strongly<br />

Disagree<br />

0% 10% 20% 30% 40%<br />

50%<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40%<br />

5<br />

My retail customers and stockists raise<br />

provenance (pro<strong>of</strong> <strong>of</strong> origin) issues<br />

when considering <strong>the</strong>ir diamond and<br />

gemstone jewellery orders.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

6<br />

My website and digital marketing<br />

activities generate a significant portion <strong>of</strong> sales.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

7<br />

The JAA's support and promotion <strong>of</strong><br />

industry wholesalers and suppliers is:<br />

Excellent<br />

Above<br />

Average<br />

Average<br />

Below<br />

Average<br />

Strongly<br />

Disagree<br />

Strongly<br />

Disagree<br />

Very Poor<br />

0% 10% 20% 30% 40% 50%<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40%<br />

8<br />

9<br />

10<br />

Buying groups provide beneficial support and<br />

business advice for independent jewellers.<br />

I intend to retire or sell my business<br />

within <strong>the</strong> next five years.<br />

My retail customers and stockists voice<br />

concerns about eco-friendly and sustainability<br />

issues regarding jewellery and watch products.<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Agree<br />

Agree<br />

Nei<strong>the</strong>r agree<br />

nor disagree<br />

Disagree<br />

Strongly<br />

Disagree<br />

Strongly<br />

Disagree<br />

Strongly<br />

Disagree<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40%<br />

0% 10% 20% 30% 40% 50%<br />

79


Crystal Ball 2030:<br />

What does <strong>the</strong> future hold?<br />

The astute know <strong>the</strong>y cannot predict <strong>the</strong> future but will work hard to minimise<br />

surprises. What changes can <strong>the</strong> industry expect before 2030?<br />

KEY FINDINGS: AT A GLANCE<br />

30m<br />

Australia's projected<br />

population by <strong>the</strong><br />

year 2030.<br />

Since <strong>the</strong> pandemic,<br />

consumers are<br />

increasingly prioritising<br />

'experience' over 'product'.<br />

Artificial intelligence<br />

became a hot topic <strong>of</strong><br />

discussion in 2022, and is<br />

likely to remain on <strong>the</strong> radar<br />

between now and 2030.<br />

$50b<br />

Estimated value <strong>of</strong> <strong>the</strong><br />

lab-created diamond<br />

market in 2030.<br />

While <strong>the</strong> purpose <strong>of</strong> a major research project<br />

like <strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong> (SOIR)<br />

is to record history, it’s perhaps fitting to<br />

attempt to forecast a vision <strong>of</strong> <strong>the</strong> future.<br />

As <strong>the</strong> famous management consultant Peter Drucker<br />

once said: “The best way to predict <strong>the</strong> future is to<br />

create it.”<br />

In business, <strong>the</strong> past does not define <strong>the</strong> future;<br />

however, <strong>the</strong> lessons learned can help shape it.<br />

It’s hard to believe that we are just six years<br />

from 2030, a year that will mark many significant<br />

milestones and occasions.<br />

At <strong>the</strong> political level, 2030 will be a significant year. It<br />

is <strong>the</strong> deadline for <strong>the</strong> United Nations ‘2030 Agenda’,<br />

and The World Bank has set <strong>the</strong> goal <strong>of</strong> eradicating<br />

global poverty by 2030.<br />

It will be a year for important anniversaries as well<br />

– it’s a year that will mark 100 years since <strong>the</strong> Great<br />

Depression began.<br />

The retail landscape will undoubtedly change between<br />

now and 2030; however, <strong>the</strong> degree to which that<br />

change occurs and how different <strong>the</strong> market will<br />

appear is what will interest most business people.<br />

For many, <strong>the</strong> ‘hockey stick’ <strong>the</strong>ory <strong>of</strong> technology<br />

is too poignant to ignore. After a long period <strong>of</strong><br />

linear development, technology has experienced<br />

a remarkably rapid expansion over <strong>the</strong> past two<br />

decades, and <strong>the</strong>re’s little reason to think that rise<br />

won’t continue.<br />

O<strong>the</strong>rs believe gentle progression will be more likely<br />

– and when it comes to retail, <strong>the</strong> same fundamentals<br />

will remain important in seven years.<br />

Since 2010, <strong>the</strong> jewellery industry has changed<br />

significantly. Lab-created diamonds have reshaped<br />

<strong>the</strong> industry, and few would have predicted <strong>the</strong> extent<br />

to which <strong>the</strong> industry appears to be moving towards<br />

bifurcation - separating one entity into two distinct<br />

segments.<br />

Market bifurcation occurs when disjointed market<br />

movements trend in opposite directions or when<br />

high and low-quality securities move out <strong>of</strong> sync,<br />

causing <strong>the</strong> two segments to operate and perform<br />

independently within <strong>the</strong> market.<br />

In economics, this traditionally involves definitions <strong>of</strong><br />

high and low value, which is why it started to become<br />

a talking point among diamond experts.<br />

Paul Zimnisky, PZ Analytics says, “It is important to<br />

remember that lab-created diamonds are creating<br />

incremental demand for diamond jewellery that would<br />

o<strong>the</strong>rwise not exist — especially at <strong>the</strong> lower-price<br />

points.<br />

Retailers are yet to connect digital marketing with sales,<br />

despite <strong>the</strong> increased importance <strong>of</strong> a strong online<br />

presence.<br />

“Looking longer-term, this incremental demand<br />

will likely continue to grow while <strong>the</strong> share <strong>of</strong> labdiamonds<br />

directly cannibalising natural diamond<br />

sales will stabilise and level <strong>of</strong>f.”<br />

While a rise in demand contrasted with falling prices<br />

may seem counterintuitive, Zimnisky explains this<br />

phenomenon by highlighting lab-created diamonds'<br />

status as a manufactured product.<br />

That is, pricing is impacted by rising demand and<br />

an even faster-increasing supply – and this supply is<br />

increasingly accomplished with improved efficiency.<br />

The bifurcation will most likely be fought on <strong>the</strong><br />

marketing front.<br />

“Product marketing by both natural and lab-diamond<br />

producers, as well as product positioning by retailers<br />

at <strong>the</strong> jewellery counter, will ultimately determine <strong>the</strong><br />

level <strong>of</strong> segregation <strong>of</strong> <strong>the</strong> two products and <strong>the</strong> speed<br />

at which <strong>the</strong> bifurcation plays out,” he says.<br />

While one segment <strong>of</strong> <strong>the</strong> jewellery industry -<br />

diamonds - is shifting towards an obvious and distinct<br />

division, it’s arguable that <strong>the</strong> watch category is<br />

undergoing a similar split, or in this case cleave, as<br />

consumers adopt smartwatches, most notably <strong>the</strong><br />

Apple Watch which did not exist until 2015.<br />

Readers may recall that Swiss behemoth Swatch<br />

entered a joint venture with Micros<strong>of</strong>t - its equivalent<br />

in <strong>the</strong> computer market - in October 2004 and<br />

announced <strong>the</strong> Swatch Paparazzi.<br />

The Paparazzi – which may have been ahead <strong>of</strong> its<br />

time - was a smartwatch based on Micros<strong>of</strong>t’s SPOT<br />

(Smart Personal Objects Technology) technology and<br />

could be connected to MSN Direct. It was ‘killed-<strong>of</strong>f’ in<br />

April 2008 when Micros<strong>of</strong>t announced that it did “not<br />

have immediate plans to create a new version <strong>of</strong> <strong>the</strong><br />

Smart Watch, as we are focused on o<strong>the</strong>r areas <strong>of</strong> our<br />

business.”<br />

While some <strong>of</strong> <strong>the</strong> changes in <strong>the</strong> industry were less<br />

predictable in 2010, o<strong>the</strong>r changes were afoot, even if<br />

it took some time for <strong>the</strong>m to be embraced.<br />

For example, <strong>of</strong>fering customers an e-commerce<br />

option partnered with your physical store was viewed<br />

as a mere compliment to your business – today, it’s<br />

close to a requirement.<br />

80


Cloudy skies blocking <strong>the</strong> view<br />

This second edition <strong>of</strong> Jeweller’s <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong> was<br />

‘delayed’ by three years because <strong>of</strong> <strong>the</strong> impact <strong>of</strong> <strong>the</strong> global coronavirus<br />

pandemic – evaluating <strong>the</strong> market during such unprecedented<br />

circumstances would have presented an unbalanced image.<br />

For Cameron Beever, owner <strong>of</strong> Ringwood Jewellers in Victoria, it’s still<br />

difficult to forecast <strong>the</strong> industry's future because <strong>of</strong> <strong>the</strong> pandemic's<br />

impact.<br />

“I think it’s really difficult to make any concrete predictions at this stage;<br />

my feeling is that we are still a year or two away from any sense <strong>of</strong><br />

normality,” he explains.<br />

“Things like cost <strong>of</strong> living pressures, housing prices, and interest rates<br />

have all been impacted by <strong>the</strong> pandemic, and we still feel <strong>the</strong> aftereffects.<br />

Jewellers are selling a luxury product – it’s not bread and milk – and<br />

that’s <strong>the</strong> reality <strong>of</strong> <strong>the</strong> situation.”<br />

Many industry figures have suggested that consumers increasingly sought<br />

repairs and o<strong>the</strong>r services for jewellery <strong>the</strong>y already owned during <strong>the</strong><br />

pandemic instead <strong>of</strong> purchasing new products. O<strong>the</strong>rs have suggested<br />

this trend was already on <strong>the</strong> rise in <strong>the</strong> years before <strong>the</strong> pandemic and<br />

that lockdowns merely accelerated it.<br />

Among those is Nationwide Jewellers managing director Colin<br />

Pocklington, who says he expects custom-made and personalised<br />

jewellery to remain a priority over <strong>the</strong> remainder <strong>of</strong> <strong>the</strong> decade.<br />

“You would have to assume that <strong>the</strong>re’s going to be an increasing desire<br />

from consumers for handmade pieces. The only question is how this will<br />

be reflected in <strong>the</strong> difference between sales <strong>of</strong> handcrafted jewellery and<br />

pre-made pieces,” he says.<br />

Beever says <strong>the</strong>se observations have been reflected in his business over<br />

<strong>the</strong> past three years.<br />

“We’re a fourth-generation family business, so I think it’s safe to say we’ve<br />

just about seen it all. I think at <strong>the</strong> moment people are looking for cheaper<br />

jewellery, and <strong>the</strong> positive, from our perspective, is that it’s leading to<br />

more repair work," he explains.<br />

“People are buying jewellery from elsewhere, and if it falls apart or <strong>the</strong>re’s<br />

an issue, it’s ending up on our bench. There are a few chain stores around<br />

our location that actually recommend customers visit us for repair work<br />

and resizing, which is fantastic.”<br />

Gradual progression<br />

It’s only natural to get excited about <strong>the</strong> future <strong>of</strong> <strong>the</strong> retail landscape –<br />

fictional works have given us so many brilliant ideas. Whe<strong>the</strong>r it’s robots<br />

delivering food on The Jetsons, gigantic animated billboards <strong>the</strong> size <strong>of</strong><br />

skyscrapers in Blade Runner, or <strong>the</strong> terrifying 3D advertisements shown<br />

in Back To The Future, writers have never been short <strong>of</strong> ideas!<br />

With that said, o<strong>the</strong>rs are predicting a more sensible, linear progression.<br />

Independent Jewellers Collective CEO Joshua Zarb says that we can<br />

expect 2030 to look very similar to 2023.<br />

“I don’t think <strong>the</strong> retail landscape will dramatically differ from where we<br />

are today. Unfortunately, I doubt <strong>the</strong>re will be robots serving us dinner or<br />

anything like that,” he jokes.<br />

“I think we will see <strong>the</strong> adoption <strong>of</strong> a few new ‘technological plug-ins’,<br />

whe<strong>the</strong>r it be payment systems or perhaps live digital diamond inventories<br />

for jewellers. There will be more <strong>of</strong> a focus on giving customers a chance<br />

to ‘design <strong>the</strong>ir dream diamond ring’ online, for example.”<br />

Pocklington agrees with Zarb and says that digital marketing will become<br />

a necessity for jewellers by 2030.<br />

“The way things are going, I think jewellery stores need to be more<br />

engaged with digital marketing than ever. You nearly can’t have a store<br />

without a digital presence anymore,” he reveals.<br />

“That’s where <strong>the</strong> buying groups will evolve, and that will be <strong>the</strong> most<br />

significant change we see in that area <strong>of</strong> <strong>the</strong> industry. Once upon a time,<br />

we <strong>of</strong>fered trade discounts ahead <strong>of</strong> everything else.<br />

“Now, <strong>the</strong> industry needs us to <strong>of</strong>fer support in new areas, namely digital<br />

marketing – and we’ll need to meet those demands.”<br />

EXCLUSIVELY DISTRIBUTED IN AUSTRALIA AND NEW ZEALAND BY<br />

AU +61 2 8543 4600 NZ +64 9 480 2211 | designaaccessories.com.au


Zarb had one prediction that he was confident would come to fruition – and<br />

increased emphasis on design for jewellers.<br />

“There’s no doubt in my mind that design will become a very sharp focus for<br />

jewellers,” he says.<br />

“There is always a place for quality customer service, <strong>the</strong>re always has been,<br />

because that’s what consumers are looking for. I also think that we will see an<br />

overall increase in <strong>the</strong> digital pr<strong>of</strong>essionalism <strong>of</strong> jewellery retailers because it<br />

will become an easier process.”<br />

Artificial intelligence<br />

The value <strong>of</strong> a strong digital presence and <strong>the</strong> importance <strong>of</strong> maximising <strong>the</strong><br />

opportunities presented by emerging technologies and online tools weigh<br />

heavily on many within <strong>the</strong> industry.<br />

Malcolm Scrymgeour, business advisor at Retail Edge Consultants, believes<br />

that retailers can discern an image <strong>of</strong> <strong>the</strong> future from today's trends.<br />

“There are two ways to view how retail will look in 2030 - fear or excitement,”<br />

he says.<br />

“Existing trends indicate what 2030 is likely to look like, and it’s technologydriven.<br />

Increased digitisation will be a priority – recall that a decade or so ago,<br />

<strong>the</strong> Yellow Pages were a big deal. Today, customers rely on websites.”<br />

In <strong>the</strong> past 12 months, artificial intelligence has taken <strong>the</strong> retail sector by<br />

storm, leaving many scrambling to keep up. Retailers are utilising AI programs<br />

for everything from virtual shopping assistant services and automated<br />

customer service to producing marketing ‘copy’ for products and advertising,<br />

and Scrymgeour says that trend will continue.<br />

“The rise <strong>of</strong> machine learning and AI will see decisions being more informed,<br />

more refined to consumers and eventually, lower costs for retailers,” he<br />

explains.<br />

“Data intensity will increase, allowing retailers to <strong>of</strong>fer what are known as<br />

‘anticipatory’ services as <strong>the</strong>y can see trends in advance. True independents<br />

[stores] with no support will be challenged as data, information, and leveraging<br />

buying power become all but impossible to do well on your own.”<br />

Scrymgeour added: “Direct-to-consumer services, where suppliers get closer<br />

to customers, enabled by digital technology, will happen. Retailers must add<br />

value to suppliers as well as customers!”<br />

Walking a new path<br />

Pocklington also suggested that design will become an increasingly important<br />

focus for independents and said that new stores entering <strong>the</strong> industry will take<br />

a different shape for <strong>the</strong> next generation.<br />

“To meet <strong>the</strong> rising demand for people wanting handcrafted pieces, we need<br />

to see a greater influx <strong>of</strong> young people entering <strong>the</strong> industry and starting in<br />

design, as opposed to retailing finished goods,” he explains.<br />

“We are already seeing this happen to a certain extent because young people<br />

struggle to enter <strong>the</strong> industry as a conventional jeweller due to <strong>the</strong> high capital<br />

costs associated with starting a small business.”<br />

Pocklington hopes that <strong>the</strong> next generation <strong>of</strong> jewellers will begin as designers<br />

and manufacturers, honing <strong>the</strong>ir skills and building a loyal customer base to<br />

<strong>the</strong> popularity <strong>of</strong> <strong>the</strong>ir bespoke work.<br />

From <strong>the</strong>re, <strong>the</strong>se jewellers are free to evolve into a traditional retailer –<br />

<strong>of</strong>fering an increasing range <strong>of</strong> branded products if <strong>the</strong>y desire.<br />

“There are already many people taking this path, and we are seeing so many<br />

self-taught jewellers becoming important contributors to <strong>the</strong> industry. I don’t<br />

think we will see many more <strong>of</strong> what you would consider a ‘traditional jeweller’<br />

from <strong>the</strong> 1980s and 1990s. Those that still exist will ei<strong>the</strong>r change or fail, ” he<br />

explains.<br />

This example becomes obvious when considering changes to local shopping<br />

districts.<br />

“Once upon a time, you could walk down a high street and see rows <strong>of</strong> jewellery<br />

stores full <strong>of</strong> windows with diamond rings and jewellery. If you didn’t have that<br />

kind <strong>of</strong> display, you couldn’t sell diamonds,” Pocklington continues.<br />

“Over <strong>the</strong> past five or so years, jewellers have discovered that <strong>the</strong>y cannot<br />

justify that kind <strong>of</strong> investment anymore. It’s money tied up in stock that may just<br />

sit in <strong>the</strong> window for months at a time. It’s not justifiable, Pocklington says.”<br />

This discussion is missing one crucial element <strong>of</strong> consideration – consumer<br />

82


ehaviour. Purchasing patterns have changed considerably over <strong>the</strong> past<br />

decade, with an increasing preference for online shopping and a rising<br />

demand for personalised services.<br />

Romil Patel oversees four jewellery stores as <strong>the</strong> owner <strong>of</strong> Jewels Fiji and, as<br />

a result, is a keen observer <strong>of</strong> changes in consumer attitude.<br />

“Everyone agrees that social media has changed <strong>the</strong> way consumers think,<br />

and I believe one <strong>of</strong> <strong>the</strong> biggest evolutions is a preference for ‘experience’<br />

ra<strong>the</strong>r than product,” he explains.<br />

“People spend so much time on <strong>the</strong>ir phones today, and I think it’s completely<br />

changed our mindsets. I’m not much <strong>of</strong> a traveller myself, but when I see<br />

photos or videos <strong>of</strong> my friends in Greece, Spain, or <strong>the</strong> US, and <strong>the</strong>y’re<br />

snowboarding or jet skiing, it’s only natural to wish that was you. I don’t think<br />

advertising on social media is as valuable for products as it is for experiences.”<br />

Patel <strong>of</strong>fered a comparison between a diamond ring and a holiday at <strong>the</strong><br />

beach, both presented as a video on Instagram. He suggested that with a video<br />

<strong>of</strong> a diamond ring online, <strong>the</strong> consumer may acknowledge that it’s beautiful<br />

and wish to own it.<br />

Comparatively, a video promoting a vacation at <strong>the</strong> beach is a more emotionally<br />

provocative visual presentation – it may be unspoken. Still, it represents a<br />

break from work and valuable time spent somewhere new and exciting.<br />

This kind <strong>of</strong> emotional drawing card is more appealing than that <strong>of</strong> an<br />

aes<strong>the</strong>tic possession, and it’s a consumer preference that was accelerated due<br />

to pandemic lockdowns, where new experiences and travel were prohibited.<br />

“I know this to be true from my experiences. I love collecting watches, for<br />

example, and once upon a time, I would spend two years saving to add a new<br />

high-end Swiss watch to my collection,” he reveals.<br />

“There came a time when I just said ‘enough’. I’ve got kids growing up, and<br />

I want <strong>the</strong>m to have an excellent education; I’d like to take my family on<br />

pleasant holidays that we will all hopefully remember for <strong>the</strong> rest <strong>of</strong> our lives.<br />

“These experiences have become more important than spending money on<br />

luxury products, and I think <strong>the</strong> money has followed <strong>the</strong>se new priorities.”<br />

Scrymgeour also had some insight into <strong>the</strong> importance <strong>of</strong> ‘experience’ in<br />

consumer spending patterns. Over <strong>the</strong> past 12 months, <strong>the</strong> ‘metaverse’ has<br />

been a popular talking point within <strong>the</strong> retail sector.<br />

The metaverse is a vision <strong>of</strong> what many in <strong>the</strong> computer industry believe is<br />

<strong>the</strong> next iteration <strong>of</strong> <strong>the</strong> internet: a single, shared, immersive, persistent,<br />

3D virtual space where humans experience life in ways <strong>the</strong>y could not in <strong>the</strong><br />

physical world. When it comes to <strong>the</strong> retail, it will allow consumers to explore<br />

virtual 3D spaces where <strong>the</strong>y can socialise, collaborate, and make purchases.<br />

To date, <strong>the</strong>re’s been no widespread adoption <strong>of</strong> <strong>the</strong> metaverse by retailers<br />

despite many brands and businesses experimenting with <strong>the</strong> platform.<br />

Scrymgeour believes that will change in <strong>the</strong> not-so-distant future.<br />

“In 2030, it is likely to be <strong>the</strong> metaverse, which is a far more fully immersive<br />

consumer experience than websites,” Scrymgeour explains.<br />

“To generate visitors to a retail store, consumers will require a better<br />

experience than <strong>the</strong>y can get from <strong>the</strong> metaverse. Retailers will need to have<br />

personalised and customised experiences that can’t be achieved online - such<br />

as designing custom jewellery.”<br />

The rest is up to you<br />

In many cases, predicting <strong>the</strong> future is a straightforward affair. Many <strong>of</strong> <strong>the</strong><br />

changes in <strong>the</strong> jewellery industry in <strong>the</strong> past 13 years have been apparent<br />

evolutions <strong>of</strong> past practices.<br />

Internet marketing has become critical for retailers, and consumers<br />

are increasingly evaluating businesses based on digital footprint. O<strong>the</strong>r<br />

developments have been far from predictable! Who could’ve expected a twoyear<br />

global pandemic would entirely reshape <strong>the</strong> industry?<br />

That said, <strong>the</strong> crucial insight for retailers is that remaining current is <strong>the</strong> key<br />

to success. Retailers may be unable to control consumer behaviour; however,<br />

<strong>the</strong>se businesses can adapt to meet <strong>the</strong>ir demands to <strong>the</strong> best <strong>of</strong> <strong>the</strong>ir ability.<br />

Classiquewatches.com<br />

As science fiction writer Isaac Asimov said: “You don’t need to predict <strong>the</strong><br />

future, just choose a future. Better that you make a good future ra<strong>the</strong>r than<br />

predict a bad one.”<br />

Who really knows what <strong>the</strong> future holds?<br />

Become a stockist today 02 9290 2199<br />

83


Provenance<br />

Does anyone really care?<br />

Provenance has been widely debated in <strong>the</strong> jewellery industry for many years.<br />

Who is really pushing <strong>the</strong> issue and why?<br />

47%<br />

Of retailers surveyed said that<br />

customers were not concerned about<br />

provenance issues regarding diamond<br />

and gemstone jewellery.<br />

KEY FINDINGS: AT A GLANCE<br />

Provenance, o<strong>the</strong>rwise<br />

known as pro<strong>of</strong> <strong>of</strong><br />

origin, is more important<br />

for jewellery industry<br />

participants than it is for<br />

consumers.<br />

While provenance may<br />

not concern consumers,<br />

it does <strong>of</strong>fer jewellery<br />

retailers important<br />

educational and<br />

marketing opportunities.<br />

54%<br />

Of retailers surveyed said that<br />

<strong>the</strong>ir customers ‘never’ or ‘rarely’<br />

raised concerns about ec<strong>of</strong>riendly<br />

and sustainability issues.<br />

Provenance, o<strong>the</strong>rwise known as pro<strong>of</strong> <strong>of</strong><br />

origin, has been one <strong>of</strong> <strong>the</strong> hottest topics in<br />

<strong>the</strong> diamond industry for <strong>the</strong> past 12 months;<br />

however, in reality, one must ask: does anyone really care<br />

where diamonds come from?<br />

It is true that some people care; however, <strong>the</strong> degree<br />

to which provenance impacts sales <strong>of</strong> diamond and<br />

gemstone jewellery is undoubtedly questionable.<br />

Indeed, some might argue that it has been<br />

embellished to enhance <strong>the</strong> sales activities <strong>of</strong><br />

businesses that promote and sell provenance<br />

services.<br />

During <strong>the</strong> preparation <strong>of</strong> this study, Jeweller<br />

surveyed retailers and suppliers about <strong>the</strong><br />

importance <strong>of</strong> provenance to <strong>the</strong> consumer.<br />

Jewellers were asked whe<strong>the</strong>r <strong>the</strong>ir customers raise<br />

provenance (pro<strong>of</strong> <strong>of</strong> origin) issues when shopping for<br />

diamond and gemstone jewellery.<br />

More than 200 Australian retailers participated in <strong>the</strong><br />

survey, and startlingly, only three per cent suggested<br />

that provenance is ‘always’ raised by customers.<br />

A fur<strong>the</strong>r 15 per cent suggested that customers<br />

raised <strong>the</strong> topic ‘very frequently’; however, <strong>the</strong><br />

consensus seems to be that jewellery shoppers do<br />

not care about pro<strong>of</strong> <strong>of</strong> origin.<br />

About 15 per cent <strong>of</strong> jewellers said that when<br />

shopping for diamond and gemstone jewellery,<br />

customers never discussed provenance, and more<br />

than one-third <strong>of</strong> responses revealed that customers<br />

‘rarely’ raise <strong>the</strong> topic.<br />

A similar quantitative survey <strong>of</strong> suppliers confirms<br />

this insight.<br />

When asked whe<strong>the</strong>r <strong>the</strong>ir retail customers and<br />

stockists raise provenance (pro<strong>of</strong> <strong>of</strong> origin) issues<br />

when considering <strong>the</strong>ir diamond and gemstone<br />

jewellery orders, fewer than 20 per cent agreed that it<br />

was a topic raised by retailers.<br />

The majority (52 per cent) were indifferent to <strong>the</strong><br />

question, nei<strong>the</strong>r agreeing nor disagreeing that it was<br />

important to retailers.<br />

Given widespread industry sentiment, <strong>the</strong>se<br />

responses may surprise some readers; however,<br />

a clearer picture emerges when considering <strong>the</strong><br />

‘identity’ <strong>of</strong> <strong>the</strong> average jewellery customer.<br />

Eye-opening exercise<br />

What does <strong>the</strong> typical customer shopping for an<br />

engagement ring look like?<br />

Is it mostly likely a woman aged between 21-30? The<br />

younger <strong>the</strong> customer, <strong>the</strong> higher <strong>the</strong> likelihood that<br />

<strong>the</strong>y have a low or modest income.<br />

"How many people know<br />

diamonds come from<br />

Russia or that <strong>the</strong>y are <strong>the</strong><br />

largest producer? From my<br />

interactions - not many."<br />

According to a recent survey conducted by Diamondport<br />

Jewellers, a retailer in Queensland, most people<br />

shopping for an engagement ring had a budget in mind.<br />

Of those with a budget at <strong>the</strong> outset, 77 per cent stuck<br />

to it when buying <strong>the</strong> engagement ring.<br />

Returning to <strong>the</strong> original question, is this hypo<strong>the</strong>tical<br />

engagement ring customer a young man instead <strong>of</strong> a<br />

young woman? If so, <strong>the</strong>y would most likely belong to<br />

<strong>the</strong> same demographic in terms <strong>of</strong> age and income.<br />

According to that same survey, 85 per cent <strong>of</strong><br />

proposals were made by <strong>the</strong> man, 10 per cent by <strong>the</strong><br />

woman, and <strong>the</strong> final five per cent <strong>of</strong> engagements<br />

were a ‘mutual decision’ between a couple.<br />

And what about <strong>the</strong> political beliefs <strong>of</strong> <strong>the</strong>se<br />

hypo<strong>the</strong>tical customers? Younger people tend to<br />

vote ‘progressively’ and have more ‘liberal’ beliefs;<br />

however, conservatives tend to marry earlier than<br />

<strong>the</strong>ir left-leaning counterparts.<br />

Younger people with progressive beliefs are likely to<br />

consider environmentalism and ‘ethical’ concerns<br />

when shopping for an engagement ring; however,<br />

how does this contrast with <strong>the</strong> issue <strong>of</strong> budgets?<br />

It’s well-known that young consumers are looking for<br />

‘bang for <strong>the</strong>ir buck’ above all else – when money is<br />

tight, everyone wants value.<br />

So what wins, value or values? Well, according to a<br />

study by The Harvard Business Review, it’s value.<br />

In a report titled The Elusive Green Consumer, what’s<br />

known as an ‘intention-action gap’ is described at<br />

length.<br />

Of those surveyed, 65 per cent said <strong>the</strong>y desire<br />

‘purpose-driven’ brands that advocate for<br />

sustainability; however, only 26 per cent said <strong>the</strong>y<br />

actually purchase <strong>the</strong>se types <strong>of</strong> products.<br />

“On <strong>the</strong> surface, <strong>the</strong>re has seemingly never been<br />

a better time to launch a sustainable <strong>of</strong>fering.<br />

Consumers — particularly Millennials — increasingly<br />

say <strong>the</strong>y want brands that embrace purpose and<br />

sustainability,” <strong>the</strong> report reads.<br />

“Indeed, one recent report revealed that certain<br />

categories <strong>of</strong> products with sustainability claims<br />

showed twice <strong>the</strong> growth <strong>of</strong> <strong>the</strong>ir traditional<br />

counterparts.<br />

“Yet a frustrating paradox remains at <strong>the</strong> heart <strong>of</strong><br />

green business: Few consumers who report positive<br />

attitudes toward eco-friendly products and services<br />

follow through with <strong>the</strong>ir wallets.”<br />

External threats<br />

So, why does this information matter to <strong>the</strong> diamond<br />

industry and jewellery retailers?<br />

The topic <strong>of</strong> ‘provenance’ has been widely discussed<br />

in <strong>the</strong> diamond industry for many years, and it’s<br />

common for ‘talking heads’ to preach about its<br />

84


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

VALUE OR VALUES?<br />

Only 19 per cent <strong>of</strong> retailers surveyed said that customers were<br />

concerned about provenance issues relating to diamond and<br />

gemstone jewellery, while more than 47 per cent said <strong>the</strong>y were not.<br />

Retailers advised that customers ‘always or ‘very frequently’<br />

raised concerns about eco-friendly and sustainability (seven per<br />

cent) while more than 54 per cent answered ‘never’ or ‘rarely’.<br />

When it came to suppliers, fewer than 20 per cent <strong>of</strong> <strong>the</strong>ir retail<br />

customers raised provenance issues, while 27 per cent were<br />

unconcerned. More than half had no opinion.<br />

importance to consumers.<br />

Pro<strong>of</strong> <strong>of</strong> origin has always been an important topic<br />

for <strong>the</strong> diamond industry for different reasons than<br />

that for consumers; however, it first seeped into <strong>the</strong><br />

public consciousness during <strong>the</strong> ‘Blood Diamond’<br />

movie period.<br />

Due to ethical concerns, suppliers and retailers<br />

feared <strong>the</strong> award-winning 2006 film would drive<br />

customers away from diamond jewellery.<br />

Fortunately, despite <strong>the</strong> increasing public awareness<br />

<strong>of</strong> conflict diamonds, <strong>the</strong>se fears never amounted to<br />

any substantial change.<br />

Indeed, <strong>the</strong> movie came and went, and diamonds<br />

remained as popular as ever.<br />

The provenance discussion resurfaced again as<br />

lab-created diamonds increased in availability and<br />

popularity; however, this time, it was focused on<br />

protecting retailers from mixing.<br />

Earlier this year, De Beers senior vice president<br />

Feriel Zerouki told Jeweller that <strong>the</strong> industry was still<br />

grappling with <strong>the</strong> impact <strong>of</strong> <strong>the</strong>se events.<br />

“At <strong>the</strong> o<strong>the</strong>r end <strong>of</strong> <strong>the</strong> supply chain, where<br />

diamonds once spoke to financial status, end clients<br />

are now focused on making sure <strong>the</strong>ir purchases<br />

reflect <strong>the</strong>ir priorities and show <strong>the</strong>m to have a<br />

consumer conscience. In short, value is increasingly<br />

connected to values,” she said.<br />

“We have made huge strides forward; however,<br />

regrettably, consumer perception <strong>of</strong> <strong>the</strong> industry has<br />

potentially moved in <strong>the</strong> opposite direction.”<br />

She added: “This can be credited in part to <strong>the</strong> legacy<br />

<strong>of</strong> highly visible cultural reference points such as<br />

<strong>the</strong> Blood Diamond film and misrepresentations <strong>of</strong><br />

<strong>the</strong> natural diamond industry by some companies<br />

seeking to boost demand for lab-created diamonds at<br />

<strong>the</strong> expense <strong>of</strong> natural diamonds.”<br />

Following <strong>the</strong> Russian invasion <strong>of</strong> Ukraine in February<br />

<strong>of</strong> <strong>the</strong> past year, <strong>the</strong> provenance ‘frenzy’ reached new<br />

heights.<br />

As Western nations placed sanctions on <strong>the</strong> Russian<br />

diamond industry as punishment for <strong>the</strong> invasion, <strong>the</strong><br />

need for pro<strong>of</strong> <strong>of</strong> origin was clear.<br />

Many said that consumers not only support this<br />

push for provenance - <strong>the</strong>y demand it. It was noted<br />

that younger consumers, in particular, expect clear<br />

evidence <strong>of</strong> ethical practice.<br />

The Responsible Jewellery Council suffered greatly<br />

from <strong>the</strong> invasion <strong>of</strong> Ukraine, losing major members<br />

due to an inability to terminate <strong>the</strong> membership <strong>of</strong><br />

<strong>the</strong> diamond miner Alrosa.<br />

Executive director Iris Van Der Veken resigned and was<br />

replaced in January by Melanie Grant, who said that<br />

‘sustainability’ would be <strong>the</strong> key focus <strong>of</strong> her tenure.<br />

“We are today with sustainability where we were<br />

with digital transformation 20 years ago. Those who<br />

embraced it thrived but also gained new and younger<br />

clients,” Grant says.<br />

“Those who dismissed it in many ways got left<br />

behind. Sustainability is <strong>the</strong> greatest single issue<br />

facing watches and jewellery today, and I want to help<br />

everyone understand what <strong>the</strong>y can do to be part <strong>of</strong><br />

this movement.”<br />

David Kellie, president <strong>of</strong> <strong>the</strong> Natural Diamond<br />

Council, has also discussed <strong>the</strong> importance <strong>of</strong><br />

provenance in <strong>the</strong> relationship between consumers<br />

and retailers.<br />

“Despite <strong>the</strong> transformation and reform that has<br />

occurred in <strong>the</strong> natural diamond industry over recent<br />

decades, many myths surrounding <strong>the</strong> industry’s<br />

operations, its standards, and its ‘players’ continue to<br />

linger,” he told Jeweller.<br />

“Unfortunately, <strong>the</strong>se misconceptions erode trust,<br />

and, in <strong>the</strong> long run, can be harmful, not only to <strong>the</strong><br />

diamond industry but especially to those who most<br />

depend on <strong>the</strong> positive impact <strong>of</strong> natural diamonds:<br />

<strong>the</strong> communities from where <strong>the</strong>y originate.”<br />

He added: “Through <strong>the</strong> influence <strong>of</strong> <strong>the</strong> internet and<br />

social media, today’s consumers are more informed<br />

than ever before. They wish to align <strong>the</strong>ir values with<br />

those <strong>of</strong> <strong>the</strong> products <strong>the</strong>y purchase. It is <strong>the</strong>refore<br />

vital for us all to support <strong>the</strong>se consumers by<br />

providing information transparently.”<br />

Disguised motivations?<br />

There’s been a common <strong>the</strong>me throughout <strong>the</strong>se<br />

repeated pushes for provenance within <strong>the</strong> diamond<br />

industry – <strong>the</strong> suggestion that pro<strong>of</strong> <strong>of</strong> origin is<br />

required to meet <strong>the</strong> demands <strong>of</strong> consumers.<br />

But is this true?<br />

Experiences will differ, <strong>of</strong> course, and many jewellers<br />

would suggest that provenance is important to <strong>the</strong>ir<br />

customers. With that said, many on <strong>the</strong> coalface say<br />

o<strong>the</strong>rwise, as our survey demonstrates.<br />

Fur<strong>the</strong>r, even if consumers say provenance is<br />

important, is it followed through in <strong>the</strong>ir shopping<br />

decisions, or does <strong>the</strong> intention-action gap come into<br />

play?<br />

In o<strong>the</strong>r words, ‘it’s all talk’.<br />

“Provenance is a tricky question because <strong>of</strong> <strong>the</strong><br />

Russia-Ukraine situation. From our perspective, we<br />

probably get one, maybe two customers each month<br />

who ask us where <strong>the</strong> diamonds come from,” Garry<br />

Holloway, owner <strong>of</strong> Holloway Diamonds, tells Jeweller.<br />

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<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

VALUE OR VALUES?<br />

results and subsequent failure suggest a misguided<br />

business model, a ‘solution looking for a problem’.<br />

An administrator's report indicated that over <strong>the</strong><br />

previous five years, only a tiny portion <strong>of</strong> Everledger’s<br />

total revenue ($AU5.3 million) had been generated<br />

from its jewellery industry products or services.<br />

During <strong>the</strong> same period, <strong>the</strong> company incurred losses<br />

in excess <strong>of</strong> $AU8.2 million.<br />

"It doesn't hurt to be<br />

able to show diamonds<br />

with verified provenance."<br />

ROB BATES<br />

JCK ONLINE<br />

“Even <strong>the</strong>n, I don’t think anybody has ever specifically<br />

asked [us] if <strong>the</strong> diamond <strong>the</strong>y were inspecting<br />

came from Russia. Most people don’t know where<br />

diamonds come from. Most people don’t know that<br />

Russia is <strong>the</strong> world’s biggest source <strong>of</strong> diamonds in<br />

terms <strong>of</strong> nations.”<br />

Holloway wasn’t <strong>the</strong> only person consulted for this<br />

story who questioned general consumer knowledge<br />

<strong>of</strong> Russia’s importance in <strong>the</strong> international diamond<br />

industry.<br />

Rod Criddle is a director <strong>of</strong> <strong>the</strong> Independent Diamond<br />

Values International (IDVI), a US-based company that<br />

<strong>of</strong>fers industry consultancy services.<br />

“Provenance is a fascinating topic that will increase in<br />

stature over time. How many people know diamonds<br />

come from Russia or that <strong>the</strong>y are <strong>the</strong> largest<br />

producer? From my interactions - not many,” he says.<br />

“If you were to ask a consumer, ‘would you buy this<br />

diamond if it supports <strong>the</strong> Russian war in Ukraine’ I<br />

would think most people would say <strong>the</strong>y don’t want it.<br />

“Currently, I see few at retail stores differentiating<br />

diamonds, which suggests most retailers are<br />

unaware <strong>of</strong> <strong>the</strong> provenance <strong>of</strong> specific stones. I can<br />

see it potentially being a real selling point in <strong>the</strong><br />

future.”<br />

Political perspective?<br />

During this research, Jeweller <strong>of</strong>fered a simple<br />

hypo<strong>the</strong>tical to several members <strong>of</strong> <strong>the</strong> diamond<br />

industry to consider <strong>the</strong> typical diamond ring<br />

customer, perhaps a younger woman who is recently<br />

engaged.<br />

They were asked: How much do her political views<br />

outweigh her desire for a large diamond ring –<br />

regardless <strong>of</strong> <strong>the</strong> origins <strong>of</strong> <strong>the</strong> stone?<br />

Paul Zimnisky, analyst with PZ Analytics, an<br />

independent diamond industry analyst and consultant<br />

covering <strong>the</strong> diamond industry, says this was a<br />

perspective that needed more consideration within<br />

<strong>the</strong> industry.<br />

“It’s a fair question and one that should probably be<br />

discussed more thoroughly by <strong>the</strong> industry,” he says.<br />

"People gift diamonds<br />

because <strong>the</strong>y make a<br />

statement or communicate<br />

a pr<strong>of</strong>ound message."<br />

PAUL ZIMNISKY<br />

PZ DIAMOND ANALYTICS<br />

“As far as <strong>the</strong> point concerning signalling a political<br />

affiliation, this is something interesting to think<br />

about. The human desire for rare and valuable things<br />

goes deep with humans, though, and I certainly know<br />

people who tend to be quite progressive and still want<br />

a natural diamond.”<br />

Holloway agreed with Zimnisky, suggesting that<br />

political interests far outweigh consumer concerns in<br />

<strong>the</strong> push for provenance.<br />

“In answer to <strong>the</strong> initial question – who cares? –<br />

from a consumer point <strong>of</strong> view, <strong>the</strong>re’s significant<br />

anecdotal evidence that <strong>the</strong> only people in <strong>the</strong> world<br />

who care about diamond provenance live and work in<br />

Washington DC or Canberra,” he explains.<br />

“It’s not just <strong>the</strong> politics; it’s about <strong>the</strong> type <strong>of</strong> person.<br />

I’m not saying that’s wrong; it should be that way.<br />

Everybody should care, but not everybody does.”<br />

Fiery crash<br />

"I still think that until <strong>the</strong> consumer<br />

really insists on knowing where <strong>the</strong>ir<br />

diamonds come from, this focus on<br />

origin will remain internal to <strong>the</strong> trade."<br />

ROBERT BOUQUET<br />

BOTSWANA DIAMONDS<br />

“Indeed, <strong>the</strong> trade<br />

discusses provenance<br />

much more than <strong>the</strong><br />

consumer.”<br />

One <strong>of</strong> <strong>the</strong> most important stories <strong>of</strong> this year was<br />

<strong>the</strong> chaotic collapse <strong>of</strong> Everledger, a Brisbane-based<br />

technology company.<br />

The company preached bold ambitions, claiming<br />

that: “The diamond industry has reached a broad<br />

consensus that greater transparency is <strong>the</strong> right<br />

thing to do, with blockchain diamond tracking one <strong>of</strong><br />

<strong>the</strong> key ways to achieving that end.”<br />

If provenance was, and is, a significant issue for<br />

consumers shopping for diamonds and jewellery,<br />

<strong>the</strong> success <strong>of</strong> Everledger would have been almost<br />

guaranteed.<br />

However, despite attempts to save <strong>the</strong> ‘diamond<br />

tracing’ company, Everledger Australia was placed in<br />

liquidation with unsecured creditors totalling more<br />

than $AU19 million.<br />

At <strong>the</strong> time, industry pundits speculated that an<br />

explanation for <strong>the</strong> collapse was that Everledger’s<br />

business model was flawed. Indeed, <strong>the</strong> financial<br />

In its initial round <strong>of</strong> fund-raising, Everledger raised<br />

more than $AU54 million. Therefore, it seemed<br />

surprising when it was revealed <strong>the</strong> company failed to<br />

generate a second round <strong>of</strong> funding and subsequently<br />

collapsed.<br />

Among <strong>the</strong> company’s most ardent supporters<br />

was Tencent, <strong>the</strong> owner <strong>of</strong> Chinese social media<br />

app WeChat. Tencent has a stockmarket valuation<br />

<strong>of</strong> more than $US400 billion, and it previously led<br />

Everledger’s $US20 million Series A funding round<br />

in 2020.<br />

In June, Jeweller contacted founder Leanne<br />

Kemp, raising this issue, and subsequently asked<br />

if investors withdrew funding - and <strong>the</strong>refore <strong>the</strong><br />

ensuing collapse - because <strong>the</strong>y had no confidence<br />

in <strong>the</strong> company’s management or withdrew because<br />

<strong>the</strong>y had no confidence in <strong>the</strong> future success <strong>of</strong> <strong>the</strong><br />

business model – or both. Kemp never responded.<br />

It stands to reason that, if provenance is such a vital<br />

issue to <strong>the</strong> industry, Everledger would not have been<br />

allowed to collapse.<br />

Despite <strong>the</strong> uncertainty around <strong>the</strong> failure <strong>of</strong> her<br />

company and questions about <strong>the</strong> legitimacy <strong>of</strong><br />

claims about provenance, Kemp has continued to<br />

tour <strong>the</strong> world, attending various industry events to<br />

promote provenance technology.<br />

Hence, <strong>the</strong> point is whe<strong>the</strong>r such services are<br />

products looking to solve a problem or solutions<br />

looking for a problem.<br />

Who are <strong>the</strong> real beneficiaries <strong>of</strong> <strong>the</strong> debate around<br />

provenance? It could be argued that it isn’t <strong>the</strong><br />

consumer, especially if <strong>the</strong>y, ultimately, must pay for it.<br />

Robert Bouquet, director at Botswana Diamonds,<br />

suggested that <strong>the</strong> failure <strong>of</strong> Everledger might<br />

reveal a need for a realignment <strong>of</strong> values within <strong>the</strong><br />

diamond industry.<br />

“The collapse <strong>of</strong> Brisbane-based diamond tracing<br />

company Everledger – entering liquidation with more<br />

than $AU19 million in debt – may support <strong>the</strong> idea<br />

that ‘movement’ around provenance is fleeting ra<strong>the</strong>r<br />

than permanent,” he says.<br />

“Indeed, <strong>the</strong> trade discusses provenance much more<br />

than <strong>the</strong> consumer.”<br />

What do <strong>the</strong> numbers say?<br />

The provenance issue should also be viewed from a<br />

data perspective. There seems to be little evidence to<br />

support <strong>the</strong> notion that provenance is as vital to <strong>the</strong><br />

industry as some believe.<br />

Rob Bates, news director <strong>of</strong> JCK Online, says he’s<br />

unaware <strong>of</strong> any evidence that consumers prioritise<br />

provenance; however, he also suggested that it can’t<br />

hurt to have more information.<br />

“There's no real data, at least that's been shared<br />

with me, on whe<strong>the</strong>r consumers care about diamond<br />

provenance,” he says.<br />

“That said, it's pretty safe to say that <strong>the</strong>y care about<br />

86


<strong>2024</strong> STATE OF THE INDUSTRY REPORT<br />

VALUE OR VALUES?<br />

diamond provenance more than, say, gold provenance,<br />

even though <strong>the</strong>re are plenty <strong>of</strong> issues in <strong>the</strong> gold<br />

supply chain.<br />

“If a consumer is choosing a lab-created diamond<br />

over a natural, it's quite possible that <strong>the</strong> fear <strong>of</strong> ‘blood<br />

diamonds’ is lurking in <strong>the</strong>ir minds, even if it's not<br />

explicitly expressed. It doesn't hurt to be able to show<br />

diamonds with verified provenance.”<br />

Earlier this year, <strong>the</strong> Natural Diamond Council<br />

highlighted a ‘mystery shopper’ study commissioned in<br />

<strong>the</strong> US that demonstrated that education for retailers<br />

is critical to sales.<br />

According to <strong>the</strong> report, 93 per cent <strong>of</strong> customers were<br />

more inclined to purchase natural diamond jewellery<br />

when <strong>the</strong>y felt sufficiently educated by a salesperson.<br />

This was contrasted with 19 per cent <strong>of</strong> consumers<br />

who remained inclined to purchase despite feeling<br />

‘uninformed’.<br />

“This report highlighted <strong>the</strong> value placed on an<br />

understanding <strong>of</strong> <strong>the</strong>ir creation and provenance, as<br />

well as <strong>the</strong> beneficiaries throughout <strong>the</strong> world from<br />

each sale <strong>of</strong> a natural diamond,” Kellie explains.<br />

“This demonstrates that <strong>the</strong> biggest opportunity to<br />

increase sales in <strong>the</strong> industry is to ensure that frontline<br />

sales staff are properly equipped to share <strong>the</strong> true<br />

values and stories <strong>of</strong> natural diamonds.”<br />

This report could be interpreted as highlighting<br />

<strong>the</strong> value <strong>of</strong> provenance for jewellery retailers as a<br />

marketing tool, thus proving its significance beyond a<br />

method to mitigate consumers' fears around conflict<br />

diamonds.<br />

Secret weapon<br />

Many experts contacted during our research<br />

highlighted <strong>the</strong> value <strong>of</strong> provenance in marketing.<br />

“There is an opportunity for marketing and branding<br />

around provenance. Don't forget that diamonds are not<br />

a practical purchase; <strong>the</strong>y are a discretionary item, it's<br />

an emotional purchase, people buy diamonds because<br />

<strong>the</strong>y make <strong>the</strong>m feel good,” Zimnisky says.<br />

“People gift diamonds because <strong>the</strong>y make a statement<br />

or communicate a pr<strong>of</strong>ound message.<br />

So, as with o<strong>the</strong>r luxury items, it's not just about <strong>the</strong><br />

biggest and cheapest, or at least it shouldn't be, as<br />

that flies in <strong>the</strong> face <strong>of</strong> what makes luxury what it is:<br />

something special.<br />

“So, I just see provenance as ano<strong>the</strong>r way for <strong>the</strong><br />

diamond industry to convey that message while at <strong>the</strong><br />

same time providing <strong>the</strong> customer with <strong>the</strong> assurance<br />

that <strong>the</strong>y are buying <strong>the</strong> real thing and it's also not a<br />

conflict or illegally sourced stone.”<br />

Criddle says that marketing that highlights <strong>the</strong><br />

specifics <strong>of</strong> a diamond could prove valuable to both<br />

major and independent retailers.<br />

“It’s about selling <strong>the</strong> story – from where it came from,<br />

both <strong>the</strong> location and formation over billions <strong>of</strong> years<br />

and <strong>the</strong> local communities supported by <strong>the</strong> industry,”<br />

Criddle says.<br />

“Information such as rough shape and weight, as well<br />

as how, who and why <strong>the</strong> diamond was polished and<br />

how it was made into <strong>the</strong> final piece <strong>of</strong> jewellery, is all<br />

valuable.<br />

“This information might be more valuable in relation to<br />

expensive diamonds or exclusive retailers, though I feel<br />

"Through <strong>the</strong> influence <strong>of</strong> <strong>the</strong><br />

internet and social media,<br />

today’s consumers are more<br />

informed than ever before."<br />

DAVID KELLIE<br />

NATURAL DIAMOND COUNCIL<br />

it can certainly filter down to general retailers to some<br />

degree.”<br />

This message was reiterated by De Beers’ Zerouki,<br />

who says that retailers have a crucial role in sharing<br />

<strong>the</strong> entire story behind diamonds.<br />

“The good news is that <strong>the</strong> natural diamond<br />

industry has an amazing story to tell in terms <strong>of</strong><br />

how <strong>the</strong>se miracles <strong>of</strong> nature are supporting <strong>the</strong><br />

lives and livelihoods <strong>of</strong> millions <strong>of</strong> people worldwide,”<br />

Zerouki says.<br />

"It stands to reason that,<br />

if provenance is such a<br />

vital issue to <strong>the</strong> industry,<br />

Everledger would not have<br />

been allowed to collapse."<br />

“Jewellery retailers are at <strong>the</strong> vanguard <strong>of</strong><br />

consumer education, and jewellers need to consider<br />

<strong>the</strong> importance <strong>of</strong> <strong>the</strong>ir long-term futures in<br />

communicating <strong>the</strong>se two positive and complementary<br />

propositions.”<br />

Voice <strong>of</strong> <strong>the</strong> industry<br />

Provenance may have an important role in <strong>the</strong> diamond<br />

industry's future; however, it’s unlikely to be in<br />

response to consumer demand.<br />

A second question in <strong>the</strong> retailer survey sought<br />

comments to clarify <strong>the</strong> following: My customers voice<br />

concerns about eco-friendly and sustainability issues.<br />

More than 16 per cent replied ‘never’ while a fur<strong>the</strong>r<br />

38 per cent responded ‘rarely’. Only a little more than<br />

7 per cent <strong>of</strong> retailers answered ‘always’ or ‘very<br />

frequently’. The results were echoed by wholesalers<br />

and suppliers selling products to retailers.<br />

When asked to respond to <strong>the</strong> statement - my retail<br />

customers and stockists voice concerns about ec<strong>of</strong>riendly<br />

and sustainability issues regarding jewellery<br />

and watch products - only 3.85 per cent answered ‘very<br />

frequently’. Nobody responded to <strong>the</strong> question stating<br />

‘always’.<br />

On <strong>the</strong> o<strong>the</strong>r side, 65 per cent <strong>of</strong> retailers responded<br />

"It’s not just <strong>the</strong> politics; it’s<br />

about <strong>the</strong> type <strong>of</strong> person.<br />

Everybody should care, but<br />

not everybody does.”<br />

GARRY HOLLOWAY<br />

HOLLOWAY DIAMONDS<br />

‘never’ or ‘rarely’.<br />

So, who is pushing <strong>the</strong> issue <strong>of</strong> provenance if it isn’t<br />

consumers or retailers? Indeed, pro<strong>of</strong> <strong>of</strong> origin may<br />

well be a solution to a problem that doesn’t exist.<br />

What did we learn?<br />

"We have made huge strides<br />

forward; however, regrettably,<br />

consumer perception <strong>of</strong> <strong>the</strong><br />

industry has potentially moved in<br />

<strong>the</strong> opposite direction."<br />

FERIEL ZEROUKI<br />

DE BEERS GROUP<br />

Provenance may prove to be a powerful tool for <strong>the</strong><br />

jewellery industry as far as marketing is concerned.<br />

That said, <strong>the</strong>re’s no reason to pretend that provenance<br />

is vital because consumers require it.<br />

As Bouquet explains, <strong>the</strong>re’s little evidence to suggest<br />

it’s a factor that weighs heavily on consumers during<br />

<strong>the</strong> decision-making process.<br />

“I still think that until <strong>the</strong> consumer really insists on<br />

knowing where <strong>the</strong>ir diamonds come from, this focus<br />

on origin will remain internal to <strong>the</strong> trade. We always<br />

hear consumers rarely ask where <strong>the</strong>ir diamond<br />

originates from,” he explains.<br />

“That said, this will change over time - and it makes<br />

sense. Our natural diamond industry has some<br />

compelling stories to tell regarding <strong>the</strong> positives <strong>of</strong> our<br />

business worldwide.”<br />

He added: “Indeed, <strong>the</strong> industry promoting information<br />

about natural diamond provenance could set <strong>the</strong><br />

standard and almost drive <strong>the</strong> consumer to expect this<br />

information. Some vertically integrated retailers are<br />

already doing this.”<br />

The industry feared <strong>the</strong> worst when Blood Diamond<br />

was released nearly two decades ago; however, <strong>the</strong><br />

trade was largely unaffected when all was said and<br />

done.<br />

It would seem reasonable to assume that by <strong>the</strong><br />

time <strong>the</strong> conflict in Ukraine is resolved – whe<strong>the</strong>r in<br />

six months or six years – <strong>the</strong> reputation <strong>of</strong> natural<br />

diamond jewellery with consumers will be largely<br />

unaffected. Those who understand this relationship<br />

– diamond producers, suppliers, and <strong>the</strong> political<br />

class – have a vested interest in expanded provenance<br />

capabilities.<br />

It’s hard to find fault with a desire for more information,<br />

and retailers may well benefit from marketing created<br />

using improved provenance technology.<br />

With that said, <strong>the</strong>re’s no reason to misrepresent<br />

this need for data as being consumer-driven if it<br />

simply isn’t. And if <strong>the</strong> industry continues to do so, it<br />

could result in more spectacular collapses such as<br />

Everledger.<br />

88


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