Jeweller - July, Edition I 2020

More documents

Recommendations

Info

STATE OF THE INDUSTRY | Chains through the decade 2020 STORE COUNT Top 5 Largest Fine Jewellery Chains due to a non-compete clause in the sale of Diva to BB Retail Capital, Colette Hayman launched a new fashion jewellery and accessories store, eponymously named Colette Accessories. The first Colette Accessories store opened in Sydney’s CBD and, at the time, Hayman boasted that they would have 120 stores within three years. By 2014, the store count had reached 102 across Australia, with a further 18 overseas. In contrast, of the seven fashion jewellery chains listed in the State of the Industry Report (SOIR) 10 years ago, only one remains – six closed their physical stores... The ‘downfall’ of the six fashion jewellery chains means that of the 378 stores that were operating in 2010, 343 no longer exist. However in February, the company – which had been renamed Colette By Colette Hayman – was placed into administration. At the time of publication, its 99 Australian stores, along with 41 New Zealand stores, remained in the hands of Deloitte Restructuring Services as the administrators attempted to re-capitalise or sell the business. Diva and Colette are not the only large fashion jewellery chains to have found the going tough over the past decade. Other closures Butterfly Silver, a fashion jewellery business established in 2002, operated 20 stores in 2010. It collapsed in March 2018 closing all locations. However, Hoskings subsequently acquired the e-commerce business butterflysilver.com.au. Equip Accessories, which featured in the 2010 SOIR with 104 stores, was liquidated in 2017. It had expanded to 110 Australian stores, all of which were closed. The other three fashion chains that didn’t survive the decade with bricks and mortar locations were Magnolia Silver, Bijoux, and Myka. In total, and along with Butterfly Silver, they represented 63 store closures. Magnolia Silver and Bijoux now operate as online-only businesses. On the other hand, Silvershop, which was founded in 1999, has now expanded to seven stores in Queensland making it a small chain. This collapse of 343 fashion jewellery stores, along with Colette’s 99 stores currently being in the hands of administrators, leads to the question: why has the retail landscape changed so drastically over the past decade for the lower end of the market? The answer likely lies in more strenuous competition from online incumbents and new entrants, given that low-margin, high-volume fashion jewellery is more suited to internet sales than higher-value, low-volume fine jewellery. Further, and more importantly, the 44 additional stores since 2010 12 additional stores since 2010 11 fewer stores since 2010 43 fewer stores since 2010 19 fewer stores since 2010 TABLE 2: FINE JEWELLERY CHAINS’ STORE COUNT 2020 VS 2010 Chain 2010 2020 Variance Prouds 217 261 44 Michael Hill 144 156 12 Angus & Coote 133 122 -11 Goldmark 119 76 -43 Wallace Bishop 57 38 -19 Zamels 100 37 -63 Shiels 31 36 5 Mazzucchelli's 25 30 5 Bevilles 29 24 -5 Salera’s 21 20 -1 Hoskings 17 16 -1 Gregory 16 15 -1 Graham's 7 6 -1 Regency 6 6 0 Anthonys 8 5 -3 Hardy Brothers 7 5 -2 Pascoe* 9 3 -6 Goldsmith* 9 2 -7 Dia Oro* 7 1 -6 Blue Spirit # 6 0 -6 Thomas # 9 0 -9 TOTAL 977 859 -118 On a like-for-like basis there has been 12% reduction in store numbers the past 10 years * No longer chain. # Stores closed CHART 1: CHAIN DOMINANCE BETWEEN 2003 - 2020 2003 2003 2007 2007 2010 2010 2020 2020 0 250 500 750 1000 1250 0 250 500 750 1000 125 34 | July 2020
Chains through the decade | STATE OF THE INDUSTRY 2020 STORE COUNT Top 5 Resilient Chains continual increase in shopping centre tenancy costs – particularly persquare-metre rents – has resulted in an unsustainable business model, especially when ‘rent’ includes a percentage of sales. This structure further reduces the margin on already low-margin items. The collapse of 343 fashion jewellery stores, along with Colette’s 99 stores currently being in the hands of administrators, leads to the question: why has the retail landscape changed so drastically over the past decade for the lower end of the market? Fine jewellery chains’ resilience If one considers the long list of apparel and accessories chains that have collapsed over the past five years – including Roger David, Marcs, Ed Harry, Rhodes & Beckett, Bardot, and Jeanswest, among others – as well as international chains which have withdrawn from the Australian market, such as Topshop, Esprit, Jigsaw, and Karen Millen, fine chains have been surprisingly resilient. Michael Hill Australia has expanded throughout the past decade, with 12 more stores in 2020 (156) than it had in 2010 (144). However, those figures belie the fact that the company went through major upheaval when it exited the US market in 2018, closing nine stores. 5 additional stores since 2010 5 additional stores since 2010 No store closures since 2010 Only one fewer store since 2010 Only one fewer store since 2010 At that time, the Australian store count had reached 172, which means that since 2010, when its store count was 144, it opened as many as 28 stores to February 2018 – yet in the ensuing period it has closed 16 stores (see chart page 40). Michael Hill experienced a number of other ups and downs. The ASX-listed company decided to expand its ‘brand’ offering by establishing a new retail chain in 2014 called Emma & Roe – named after founder Sir Michael Hill’s daughter Emma and his wife’s maiden name, Roe. The new stores attempted to specialise in ‘demi-fine’ charms, bracelets, necklaces, earrings and stackable rings. The concept was trialled for 18 months, beginning in five Queensland stores in 2013 under the Captured Moments brand. After receiving “encouraging results”, the company opened its first Emma & Roe concept store in Mackay, Queensland, in April 2014. Even though the number of Emma & Roe stores quickly increased, the venture ultimately proved unsuccessful. By June 2018 then-CEO Phil Taylor announced the closure of all 36 stores. The ‘big boy’ of the Australian jewellery industry, James Pascoe Ltd (JPL), the owner of Prouds, Goldmark and Angus & Coote, remains the largest group, as it was in 2010. Since then it has had a net loss of only 10 stores, or 2 per cent, declining from 469 to 459. While the result is impressive, like Michael Hill, the company has rationalised its store mix and footprint TABLE 3: FINE & FASHION JEWELLERY CHAINS’ STORE COUNT 2020 Chain Stores Prouds 261 Michael Hill 156 Lovisa 140 Pandora # 125 Angus & Coote 122 Colette* 99 Goldmark 76 Wallace Bishop 38 Zamels 37 Shiels 36 Mazzucchelli's 30 Bevilles 24 Salera’s 20 Hoskings 16 Gregory 15 Silver Shop 7 Graham's 6 Regency 6 Anthonys 5 Hardy Brothers 5 TOTAL 1224 # Pandora was not included on the Chain Store list in 2010 as it was defined as a ‘brand-only’ store while * Colette did not exist as a chain in 2010 however, it is now under administration Prouds Angus & Coote CHART 2: PROUDS, ANGUS & COOTE AND GOLDMARK STORE GROWTH SINCE 2003 Goldmark PROUDS STORES Stores 300 200 100 0 2003 2007 2010 2020 ANGUS & COOTE STORES Stores 150 100 50 0 2003 2007 2010 2020 Stores 150 100 50 0 2003 2007 2010 2020 The above charts show the growth of the three James Pascoe Ltd (JPL) chains stores. It should be noted that Angus & Coote and Goldmark were not part of JPL in 2003, which acquired the ASX-listed Angus & Coote in a reverse takeover deal for $76 million in 2007. GOLDMARK STORES July 2020 | 35
Page 1 and 2: VOICE OF THE AUSTRALIAN JEWELLERY I
Page 4 and 5: Looking for new product ideas? Mayb
Page 6 and 7: S A MS GR O UP A U STRA L I A WE’
Page 8: Upfront #Instagram hashtags to foll
Page 11 and 12: Let’s Talk It’s always importan
Page 13 and 14: News NSW government approves Jewell
Page 15: New buying group reaches membership
Page 18 and 19: News In Brief LVMH reiterates commi
Page 20 and 21: LUXURY pearl AND opal JEWELLERY LUX
Page 23 and 24: Defendant in Melbourne Gold Company
Page 25 and 26: From our inventory, to yours... BEC
Page 27 and 28: INSIDE My Store Erik Runyan Jeweler
Page 29 and 30: REVIEW Gems The green fire of Perid
Page 31 and 32: STATE OF THE INDUSTRY Chains throug
Page 33: Chains through the decade | STATE O
Page 37 and 38: 300 200 Chains through the decade |
Page 39 and 40: Chains through the decade | STATE O
Page 41 and 42: HILLS AND VALLEYS KEY MOMENTS FOR M
Page 43 and 44: Chains through the decade | STATE O
Page 45: BEST OF BUSINESS Feature Five metho
Page 48 and 49: BEST OF BUSINESS Selling Blind spot
Page 50 and 51: BUSINESS Management Tips for keepin
Page 52 and 53: BEST OF BUSINESS Marketing & PR A g
Page 54 and 55: BEST OF BUSINESS Logged On How to c
Page 56: My Bench Matthew Alexander Crooks M
Page 59 and 60: Love isn’t cancelled, it’s stro
Page 61: Access one of the largest inventori

Jeweller - July, Edition I 2020

Create successful ePaper yourself

Delete template?

Save as template?