IP263-N14YG IP263-B14YG IP264-E14YG 46 LUXURY PEARL & OPAL JEWELLERY 02 9266 0636 • ENQUIRIES@IKECHO.COM.AU WHOLESALE.IKECHO.COM.AU
Chain Stores: Full steam ahead The fine jewellery chain stores have fared well over <strong>the</strong> past decade but consolidation could be on <strong>the</strong> horizon as <strong>the</strong> 'big fish' look for new customers via brand differentiation. 1,252 Fine and fashion jewellery chain stores in Australia as <strong>of</strong> November 2023. Scale is vital to <strong>the</strong> success <strong>of</strong> jewellery chain stores. Marketing and promotional activities impact all stores equally. KEY FINDINGS: AT A GLANCE Jewellery chain stores are able to negotitate from a position <strong>of</strong> strength with shopping centre landlords. 278 Prouds stores in Australia as <strong>of</strong> November 2023. Prouds is <strong>the</strong> largest chain in <strong>the</strong> country, accounting for eight per cent <strong>of</strong> all jewellery stores. The trials and tribulations facing <strong>the</strong> general retail sector are hardly a secret. Yet, somehow, fine jewellery chain stores appear to be resistant to many <strong>of</strong> <strong>the</strong>se external pressures. The 2010 edition <strong>of</strong> <strong>the</strong> <strong>State</strong> <strong>of</strong> <strong>the</strong> <strong>Industry</strong> <strong>Report</strong> (SOIR) documented <strong>the</strong> surprising resilience chain stores appeared to have in <strong>the</strong> fallout <strong>of</strong> <strong>the</strong> 2008 Global Financial Crisis. Despite stiff competition for <strong>the</strong> consumer dollar, fine jewellery chains performed exceedingly well as <strong>the</strong>y consolidated considerably over three years. At <strong>the</strong> time, <strong>the</strong>re were 1,355 fine and fashion chain stores in Australia, occupying 32 per cent <strong>of</strong> <strong>the</strong> overall jewellery market. Of that figure, 977 were fine jewellery chain stores, with <strong>the</strong>se figures not accounting for Pandora (41 stores). There were 378 fashion chain stores. Fast forward to 2023, and <strong>the</strong> landscape has shifted dramatically. While <strong>the</strong> store count <strong>of</strong> Australia's fine and fashion jewellery chains accounts for 1,252, <strong>the</strong> makeup has changed significantly. That is, 13 years later, <strong>the</strong> fine chain store count has changed by five compared with 2010 (972) contrasted with only 265 fashion. This means that fashion chain stores hold just 21.3 per cent <strong>of</strong> <strong>the</strong> market, a stark contrast to <strong>the</strong> 27 per cent share held a little more than a decade ago. While <strong>the</strong> decline <strong>of</strong> fashion chains is explained in detail on Page 46, in short, six <strong>of</strong> <strong>the</strong> seven major chains that existed in 2010 collapsed within a decade, with Lovisa <strong>the</strong> sole survivor. While Lovisa held a modest store count <strong>of</strong> 35 in 2010, that figure has expanded to 175 stores – occupying 84 per cent <strong>of</strong> <strong>the</strong> total fashion chain market. "Ano<strong>the</strong>r essential matter to consider is that chain stores now dominate retail space in <strong>the</strong> major shopping centres." What is most curious about this data is that while Australia’s overall jewellery store count (fine and fashion chains, brand-only and independents) has consistently declined in <strong>the</strong> past decade (18 per cent), fine chain stores have stood tall and wea<strong>the</strong>red <strong>the</strong> storm. What is it that makes <strong>the</strong>se chain stores so resilient to <strong>the</strong> kinds economic pressures that force o<strong>the</strong>r retailers to close? Papa Bear To understand <strong>the</strong> factors that have made fine jewellery stores so resistant to economic pressure, it’s worth closely examining <strong>the</strong> changes in <strong>the</strong> industry’s major players on a case-by-case basis. Unsurprisingly, <strong>the</strong> James Pascoe Group (JPG) remains <strong>the</strong> dominant force in Australia. It has been relatively stable for <strong>the</strong> past decade (469 stores in 2010), with a decline in Goldmark locations (63 stores from 119 stores) outweighed by a focus on Prouds (278 stores from 217 stores). Today, <strong>the</strong> New Zealand-based retailer operates 460 locations, only nine less than in 2010. However, it is JPG’s recent past that is most interesting. Since 2020, and following <strong>the</strong> COVID pandemic, its Prouds stores have expanded to 17 new locations (278 stores from 261 stores). At <strong>the</strong> same time, JPG’s Angus & Coote brand decreased by three stores (119 from 122), and Goldmark also declined - by 13 stores (63 stores from 76). This leaves JPG with 460 stores, an increase <strong>of</strong> one store from our pre-COVID study in 2020 (459 stores). Michael Hill International (MHI) - ano<strong>the</strong>r Kiwifounded jeweller - has been busy. Earlier this year, <strong>the</strong> company shocked <strong>the</strong> jewellery industry by acquiring Bevilles, <strong>the</strong> Victorian-based jeweller founded in 1934. MHI operated 144 stores in Australia in 2010 and, over TABLE 1: AUSTRALIAN JEWELLERY CHAIN STORE COMPARISON 2010 V 2023 CHAIN STORES NSW VIC QLD WA SA TAS ACT NT TOTAL All Chains 2010 417 305 316 167 91 20 27 12 1,355 All Chains 2023 370 272 309 162 77 18 30 14 1,252 Variance -47 -33 -7 -5 -14 -2 3 2 -103 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 have suffered significant collapses in <strong>the</strong> past decade. 47
Change language