Jeweller - August 2020

VOICE OF THE AUSTRALIAN JEWELLERY INDUSTRY AUGUST 2020
Tech’s appeal
UNDERSTANDING YOUR CUSTOMERS’
E-COMMERCE EXPECTATIONS
Balance of power
REVIEW OF RETAIL LEASES AND NEGOTIATION
IN THE POST-COVID ENVIRONMENT
Market update
NEW AND BESTSELLING PRODUCTS
FROM LEADING SUPPLIERS

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I N T E R N A T I O N A L
J E W E L L E R Y & W A T C H F A I R
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YOUR SAFETY IS OUR PRIORITY
Safety plans in place to protect visitors, exhibitors and staff
at the event.
Social Distancing will be encouraged and monitored
throughout the event for your safety and the safety of others.
To minimise queuing and contact all visitors are required to
pre-register for entry tickets.
The teams have been trained to deliver new cleaning procedures.
As a condition of entry, everyone will be assessed and those
with COVID-19 related symptoms will be refused entry.
For details and updates on the International Jewellery & Watch Fair
please visit jewelleryfair.com.au
Organised by
Est. 1990

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Price in
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Yehuda
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Holmes 2.0
100% $6,495
De Beers Group SYNTHdetect 100% $18,500
NGTC GV5000 99.00% $43,200
DRC Techno J-Smart 89.40% $22,499
Arotek/GII QChKAdC 88.90% $7,700
DRC Techno D-Secure+ 85.90% $11,999
DRC Techno J Detect 9000 85.40% $9,999
Gemometrics GemPen 84.90% $2,300
DRC Techno J.Mini 84.40% $6,499
Massive Tech Lab G-certain 82.40% $9,999
Massive Tech Lab J-Certain 80.40% $13,999
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AUGUST 2020
Contents
This Month
Industry Facets
10 Upfront
24
10 YEARS AGO
Time Machine: August 2010
12
FACTS & FIGURES
COVID-19 Update
26
MY STORE
The Collective
14 Monthly Showcase
17 News
29
52
54
LEARN ABOUT GEMS: BACK IN TIME
Colour change gemstones
MY BENCH
Laurie Moffatt
SOAPBOX
Darren Roberts
Features
30
COVID-19 IMPACT – PART II
Seeing eye to eye: Retail rent review
30 RENT REVIEW FEATURE
New lease on life
Jeweller explores how the COVID-19 pandemic
has tipped the balance of power between retail
landlords and tenants.
Better Your Business
41
CUSTOMER STRATEGY
STEVEN VAN BELLEGHEM reveals how technology is shaping customer relationships.
44
46
48
50
SELLING
To increase sales and satisfaction, listen up, advises RICHARD SHAPIRO.
MANAGEMENT
Make employee performance reviews count, writes BARBARA CROWHURST.
MARKETING & PR
BARRY URQUHART discusses the best ways to cut through the marketing ‘noise’.
LOGGED ON
DAVID BROWN explains how to audit your business’ online presence.
29 LEARN ABOUT GEMS
Colour change gems
4Discover the captivating
qualities of chameleonic
gemstones across the
colour spectrum.
FRONT COVER The Thomas
Sabo Magic Garden collection
continues to inspire and
delight, with delicate pieces
evoking the beauty of nature.
August 2020 | 7

S A MS GR O UP
A U STRA L I A
WE’LL RISE ABOVE THE STORM
These are unsettling times, with COVID-19 impacting our
professional lives and those close to us. We understand it
is challenging to operate under current restrictions, however
we’re getting through this together one day at a time and
there is a light at the end of this tunnel.
Despite the circumstances, take care and make time to
do the things you love with the people you love; it’s
never been more important to support one another, remain
positive and keep smiling.
Wishing you a safe passage through this difficult period.
We’ll rise above the storm.
Steve Der Bedrossian
CHIEF EXECUTIVE OFFICER
ARGYLE PINK
DIAMONDS
Semi Precious Jewellery
T: 02 9290 2199 F: 02 9262 1630 E: Pink@samsgroup.com.au W: Samsgroup.com.au

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Upfront
#Instagram hashtags to follow
Alpha Order
#chainbracelet
#jewelleryblog
Stranger Things
44,251+ POSTS
#chunkyjewelry
145,628+ POSTS
#menswatches
Weird, wacky and wonderful
jewellery news from around the world
42,899+ POSTS
486,930+ POSTS
Crashed up
#diamond
15.8 MILLION POSTS
#estatejewelry
215,639+ POSTS
#goldnecklace
492,008+ POSTS
HISTORIC GEMSTONE
The Black
Orlov
The Black Orlov, set
in a diamond brooch
and necklace
The 67.5-carat Black Orlov diamond is
famous for its alleged ‘curse’. It was
once part of a much larger stone called
the Eye of Brahma, which – legend has
it – was stolen from an Indian temple
before surfacing in Russia in the early 20th Century.
#rosegoldjewelry
98,500+ POSTS
#sustainablejewelry
125,835+ POSTS
#vermeil
65,625+ POSTS
Two of its owners – Princess Nadia Vygin-Orlov and US jeweller
JW Parris – committed suicide before the diamond was cut into
three pieces in an attempt to break the curse. Renamed the
Black Orlov in the princess’ memory, the stone was set in a
brooch of 108 diamonds, suspended from a diamond necklace.
It was purchased by jeweller J Dennis Petimezas in 2004 and has
been displayed in several museums since.
Celebrity Style
4 US actress Joey King has modelled
a beautiful range of jewellery during the
digital press tour for her latest Netflix
film. Her stylist Jared Eng selected a
particularly eye-catching set of hoop
earrings by Alexander McQueen for the
LA online premiere.
Image credit: Instagram/jaredeng
4Talk about turning ‘crash’ into
treasure! US brand Crash Jewelry
creates jewellery from parts of
wrecked luxury vehicles. Jeweller
Christi Schimpke crafts necklaces,
earrings, cufflinks, and bracelets
using metal sourced from her
husband’s LA car repair workshop,
combined with precious gemstones.
Pieces made from Porsche,
Ferrari, and BMW cars are
her bestsellers.
Million-dollar mask
4An Israeli jewellerhas been
commissioned to create a
COVID-19 protective face mask
valued at $US1.5 million. Isaac
Levy, jewellery designer of the
brand Yvel, says the 18-carat white
gold mask will be fitted with an
N99 filter, and be covered in 3,600
white and black diamonds.
“I am happy that this mask gave us
enough work for our employees to
be able to [keep] their jobs in very
challenging times,” Levy said.
Digital Brainwave
An Instagram
spokesperson said
the company is
exploring options
to monetise Reels
for businesses,
though details are
yet to be finalised.
4Instagram has introduced a new feature,
Reels, which enables business and personal
accounts to create short-form videos. The
15-second clips mimic the format of the
popular social media app TikTok. The clips
can be annotated with captions and and
edited with fun visual effects.
While advertising is yet to be integrated into
the Reels feature, it is still useful for brands
to create engaging and entertaining content
for followers. However, business accounts
are currently unable to use music or branded
content tags, and cannot pay to have their
Reels promoted.
Jewel Watch
4Louis Vuitton presents a new
unisex jewellery collection, LV Volt
(as modelled by French artist Sharon
Alexie, above), which reshapes the
fashion house’s signature letter logo as
a recurring motif.
Bite the dust
4New York City publication
Brooklyn Paper reports that a
mugger stole a man’s gold teeth
after ambushing him in his car
earlier this month. The victim told
police that his assailant held him
at gunpoint and stole a ring and
cash as well as the false teeth.
While unusual, the crime is not
unprecedented; in 2016, a man
was assaulted on the street in
San Francisco’s Financial District
before two robbers stole his gold
teeth and mobile phone.
VOICE OF THE AUSTRALIAN JEWELLERY INDUSTRY
Published by Befindan Media Pty Ltd
Locked Bag 26, South Melbourne, VIC 3205 AUSTRALIA | ABN 66 638 077 648 | Phone: +61 3 9696 7200 | info@jewellermagazine.com
Publisher & Managing Editor Angela Han angela.han@jewellermagazine.com • Assistant Editor Arabella Roden arabella.roden@jewellermagazine.com
Advertising Toli Podolak toli.podolak@jewellermagazine.com • Accounts Paul Blewitt finance@befindanmedia.com • Subscriptions info@jewellermagazine.com
Copyright All material appearing in Jeweller is subject to copyright. Reproduction in whole or in part is strictly forbidden without prior written consent of the publisher. Befindan Media Pty Ltd
strives to report accurately and fairly and it is our policy to correct significant errors of fact and misleading statements in the next available issue. All statements made, although based on information
believed to be reliable and accurate at the time, cannot be guaranteed and no fault or liability can be accepted for error or omission. Any comment relating to subjective opinions should be addressed
to the editor. Advertising The publisher reserves the right to omit or alter any advertisement to comply with Australian law and the advertiser agrees to indemnify the publisher for all damages or
liabilities arising from the published material.

With the recent announcements of
government restrictions starting to be
rolled back, jewellers now have the
opportunity to get customers back
into the store.
Effectively communicate the
changes that have taken
place without spending
all their time on the phone.
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COVID-19 Update
9.5%
decline in the Westpac-
Melbourne Institute Index
of Consumer Sentiment
between July and August
* Westpac Consumer Sentiment Survey highlights, 12 August
6 October
Commonwealth Budget to be
announced, including decisions on
further stimulus payments, business
support, and tax reform
$5,000
additional grant available to Victorian
small businesses – both metropolitan
and regional – from the State
Government’s Business Support Fund
due to the impact of stage-four lockdown
To qualify for the extended
JobKeeper scheme, employers
now need to show a 30 per
cent decline in revenue for
the September and December
quarters; employees hired
from 1 July are now eligible
DR PHILIP LOWE
GOVERNOR, RESERVE BANK
OF AUSTRALIA
“The economy is not going to
recover until we get on top of
this virus. From the outset there
was a very strong sense that
we needed to build a bridge to
the other side when the virus is
contained. That bridge has had
to be longer than we might have
hoped to be necessary, even so,
it’s been the right strategy.”
DANIEL ANDREWS
PREMIER OF VICTORIA
“We want businesses
to survive this pandemic. We want
people healthy and back at work.
We want to begin the process of
rebuilding our economy and our
community and setting us up for
the future. We can’t get to that
point unless we all play a part
in making this strategy work,
but we will continue to support
businesses to the other side.”
DR ELOISE ZOPPOS
RESEARCH FELLOW,
AUSTRALIAN CONSUMER
RETAIL STUDIES UNIT –
MONASH UNIVERSITY
“Victorians are well placed to
adjust to the ‘new normal’... While
we can’t know exactly what the next
few weeks will bring in Victoria,
we do know that consumer and
shopping behaviours were already
changing, and we can only expect
these changes to continue.”
48,000
Australians applied to
access up to $10,000 of
their superannuation in
the week to 2 August *
* Australian Prudential Regulation Authority
60%
of surveyed
Australians who received
government stimulus
payments said they spent it,
rather than saving
* ‘Australian Financial Review’, 10 August 2020
$101.3bn
estimated total cost
of the JobKeeper
scheme until
March 2021
Australian
Financial Review
Gemfind Digital
Solutions
World Diamond
Congress
Pip Marlow, CEO
Salesforce ANZ,
Charles Coorey,
partner Gilbert +
Tobin, and Dr Billy
Sung of Curtin
University will take
part in the event.
4The Australian Financial
Review will host the third
instalment of its Future
Briefing virtual event series
on 29 September. The webcast
will explore the new reality
of consumer behaviour and
demand of online shopping.
Topics covered will include
e-commerce opportunities
and trends, and how to create
strong brand engagement and
personalised experiences.
Gemfind’s Alex
Fetanat and
Anthony Arechiga
will explore
digital marketing
strategy and
website best
practices.
4US jewellery-focused
digital marketing firm
Gemfind Digital Solutions
continues its ongoing
webinar series for retailers
on 19 August.
The session, held in
partnership with the
Independent Jewelers
Organization, is entitled,
‘The Road Map to Successful
Online Selling for Jewelers’.
The biennial
Congress was
scheduled to be
held in Hong Kong
in November, but
has been moved
online due to
COVID-19.
4The next World Diamond
Congress will be held digitally
from 14–15 September 2020,
the World Federation of
Diamond Bourses (WFDB)
has announced. Yoram Dvash,
acting president WFDB, said,
“This is the first time that
we will be holding the entire
Congress in this format,”
adding that the event was
coming at a “critical time” for
the diamond industry.
12 | August 2020

Let’s Talk
It’s always important to talk, but right now – in the middle
of a worldwide economic crisis – it’s more important than
ever to talk and work together.
As we emerge from COVID-19 we want to ensure Duraflex Group
is listening and adapting to your needs as a true business partner.
Duraflex Group is here to support you during this recovery
period, and to help you succeed in 2020 and beyond. We are
open to discussing anything you need to assist your business
during this challenging time.
Phil Edwards
MANAGING DIRECTOR, DGA
We are here to listen and provide support for your business.
Duraflex Group is here to help you succeed.
For more details please call (02) 9417 0177 and talk to your Sales Executive to discuss.

Bestsellers
1
2
3
4
AUGUST
Monthly
Showcase
Jeweller’s compiled snapshot
of bestselling pieces from
leading suppliers.
5
6 7
8
1 QUDO | Timesupply The Tondo and Tondo Deluxe tops from Qudo are a perennial favourite, while the new Eternity Spacer rings are proving equally popular with customers who love the exciting and
personalised Qudo range. 2 STOW LOCKETS | Link Wholesale Stow Lockets are handcrafted from the finest materials. Each locket can be carefully stylised by adding meaningful charms, creating a
sentimental heirloom jewellery piece. 3 PIERRE LANNIER | Heart & Grace The Pierre Lannier Capital Chronograph is a stylish and sophisticated addition to any watch collection. 4 IKECHO AUSTRALIA
The Keshi Freshwater Pearl Hook Earrings combine simplicity with elegance. Crafted in sterling silver with 14–16mm Keshi pearls. 5 GEORGINI | West End Collection The Sonutosa range – part of
the Luxe Collection – is a refined take on geometric shapes. The bold squares and rectangles are accentuated with Georgini’s signature sparkle to make a style statement. 6 THOMAS SABO | Duraflex
Group Australia The Colourful Lucky Symbols necklace, made from 925 sterling silver plated in 18-carat yellow gold, features glass-ceramic decoration as well as synthetic ruby, and pink and white
zirconia. 7 Baume & Mercier | Duraflex Group Australia The Hampton Collection features a unique style emblematic of the Art Deco era and is immediately distinctive for its rectangular design. 8 PINK
KIMBERLEY | SAMS Group Australia The Kimberley Rae Ring features a trinity of emerald-cut white diamonds set in 18-carat rose and white gold and adorned with beautiful Argyle pink diamonds.

News
Sydney Jewellery Fair postponed to October
The International Jewellery & Watch Fair is now scheduld to take place in October.
The organiser of the International Jewellery &
Watch Fair (IJWF), Expertise Events, has postponed
the show by four weeks, from 12–14 September to
10–12 October 2020.
Gary Fitz-Roy, managing director Expertise Events,
told Jeweller that the decision to move the show
date was made earlier this week, prior to the
announcement of new border restrictions between
NSW and Queensland, and increasing COVID-19
case numbers in Victoria.
“We’re making our decisions based on what’s best
for the industry, rather than a particular state. We
haven’t reacted to Victoria, we haven’t reacted to
Queensland. No-one knew the announcement
[from the Queensland Premier] was coming – we
certainly didn’t.
“We made a commitment to the industry that we
would give an update on the show at the end of
July, and we’ve been transparent in our
communication and shared the good, the bad,
and the ugly,” Fitz-Roy said.
In an email to exhibitors, Fitz-Roy confirmed that
the mid-October dates had only recently been
made available by International Convention Centre
Sydney, adding that the extra four weeks would
give “more time for state border restrictions to
be reviewed, especially given most states have
resumed to near-normal business operations”.
He added, “If we’d made this decision two weeks
ago, we would have been jumping the gun. We
are making the next decisive move that is in the
best interest of the industry. Will everyone like it?
Possibly not. But if we’re going to have any industry
to come back to, and if retailers are going to survive,
it’s got to start with something.
“It’s our desire and hope that the October new
dates will give us an opportunity to reconnect, do
everything we’ve talked about, and move forward.”
The Spring Gift & Lifestyle show, which was
scheduled to run concurrently with the IJWF at the
ICC Sydney exhibition centre, will also take place on
the new October dates.
The exhibitor email states that the later schedule
“provides more time for State border restrictions
to be reviewed, especially given most states have
resumed to near normal business operations. It will
also allow buyers a little more time to gauge their
stock levels in time for Christmas, and although we
do know this could mean some suppliers will need
to review their own supply levels and timing we
believe it’s the ‘greater good theory’.”
Fitz-Roy told Jeweller he also believes the new
dates are more suitable because “there are no
international shows, so the sourcing and supply of
stock for the busiest period, being Christmas, is
still important. Sooner or later, retailers are going
to need stock. And significantly, not many retailers
have had visits from suppliers [this year],” he
explained.
Expertise Events previously announced several
initiatives aimed at reducing costs for exhibitors,
including new modular stands and the Expertise
Mate discount program.
Addressing safety concerns, Fitz-Roy said delaying
the show was “realistic” and would provide enough
time for case numbers to stabilise in Victoria.
“We have to accept that we will have COVID-19
among us for some time. So I think what [moving
the dates] means is that it gives all states a bit
more time to get things under control and they are
obviously ramping that up,” he explained.
Expertise Events will provide a further update on
the Sydney shows on 4 September. The Gold Coast
Gift & Lifestyle fair will proceed as planned on
26–28 September.

News
In Brief
David Allen returns to lead Pandora
Australia; Phil McNutt steps down
Gold price reaches
record high
4 Amid an investor surge, the gold price
has broken its previous record high.
Gold reached $US2,075 per ounce on
7 August – exceeding the previous record of
$US1,917, which was set in August
2011. However, the price has since dropped
back below $US2,000. The gold price
has seen an upward trend throughout
2020 as a result of uncertainty in other
areas of the world economy.
Record-breaking colour
diamond found in Russia
4Russian mining giant Alrosa has
confirmed that it has unearthed the
largest natural colour diamond ever
found in Russia. The 236-carat rough
– which displays a yellowish orange
colour – was mined at the Ebelyakh site in
Yakutia. Pavel Vinikhin, head of polishing
Alrosa, said the stone was being evaluated
to determine if it would be cut in-house at
Alrosa or sold as rough.
Apprentice competition
revamped for 2020
4Nationwide Jewellers has launched its
2020 Apprentice of the Year Competition,
with key changes. This year, apprentices
have been given a customer brief
including thoughts, ideas, and budget to
reflect the market demand for custommade
jewellery. Entry forms have been
snt to Nationwide members in Australia
and New Zealand. The winner will be
announced in November.
GIA embraces artificial
intelligence
4The Gemological Institute of America
(GIA) is developing an artificial
intelligence (AI) system for diamond
clarity grading, alongside IBM. Pritesh
Patel, chief operating officer GIA, said
AI clarity grading works by feeding
data gathered from GIA’s thousands of
reference stones into a program, which
then is used to ‘train’ algorithms on
how to grade for clarity. The system is
currently being trialled at two GIA US labs.
David Allen – who previously led Pandora Australia from 2012–2015 – has returned to take over management of
the new Pacific regional division, which includes Australia, New Zealand, and Fiji.
As part of Pandora Jewelry’s global
restructuring, David Allen – who led Pandora
Australia between 2012–2015 – will return to
head up the new Pacific regional division, with
current managing director Phil McNutt leaving
the company.
Allen had been based at Pandora’s global
headquarters in Copenhagen, Denmark for the
past five years, where he oversaw its Europe,
Middle East and Africa operations.
Speaking to exclusively to Jeweller about his
return, Allen said, “It is wonderful to be back,
Australia is home, and we all missed her very
much. My family and I have had an incredible
life and professional experience abroad and I
will always be truly grateful for the opportunity
that was given to us.”
He added, “One of the first things we did when
we got back was to have a barbecue – not that
we didn’t have barbecues in Denmark, but
there is nothing quite like an Aussie barbecue
on a Saturday afternoon with a cold beer!”
When the restructuring was initially announced
in March 2020, Allen was confirmed to be
staying with the company in an unspecified role.
Internationally, 180 redundancies were
expected, with Kenneth Madsen, president
Pandora Asia-Pacific, among those leaving
the company.
At the time, a spokesperson for Pandora
Australia told Jeweller that McNutt – who was
appointed managing director in January 2019
– would take over as general manager of the
new Pacific regional division, which includes
Australia, New Zealand and Fiji.
Jeweller also previously contacted McNutt
regarding potential job losses and staffing
changes at Pandora Australia’s head office in
Sydney, but those questions went unanswered.
Pandora Australia’s revenue has declined each
year since 2017. Throughout 2019, revenue
fell by double digits each quarter; the most
significant drop was in the three months to
November 2019, when it fell by 23 per cent.
“It is wonderful to be back, Australia
is home, and we all missed her very
much. My family and I have had an
incredible life and professional
experience abroad”
– David Allen, Pandora Jewelry
It has also undergone something of a
management merry-go-round, having been led
by three different executives: Brien Winther,
who was transferred to Pandora British Isles
after 13 months, Mikael Kruse Jensen, who left
to manage Pandora Northern Europe following
less than two years in the role, and Phil McNutt,
who joined the company from Sunglass Hut in
January 2019.
When asked about the differences between the
Australian and EMEA markets and the changes
in Australia over the past five years, Allen
said, “It is of course very important for me to
understand if and how the market has changed
– as I am sure that it has – and I will invest time
in understanding this. This will in turn help the
team and I understand the role that Pandora
will play moving forward.”
Some industry commentators have noted
that Pandora’s local problems may have
CONTINUED ON PAGE 20
18 | August 2020

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News
Indian jewellery body to host international digital trading event
India as well as buyers from across the world an
opportunity to interact and make decisions in a
similar way as they used to do at a
physical show”.
Dilip Shah, convener international GJEPC, added,
“The VBSMs will help our buyers to check out
new product developments without travelling,
explore new sourcing opportunities, compare
and analyse products and services of exhibitors
without any distraction.”
The Gem & Jewellery Export Promotion Council has announced the first in a series of Virtual Buyer and Seller Meets.
The Gem & Jewellery Export Promotion
Council (GJEPC) has announced it will hold
a Virtual Buyer and Seller Meet (VBSM) on
27–28 August to allow Indian manufacturers to
showcase diamond jewellery and loose stones to
international buyers.
Products will be displayed on a dedicated secure
GJEPC website with a user-friendly search
function. Registered buyers and sellers will then
be matched through the site and have video
meetings scheduled and managed by the GJEPC,
alongside a team of international coordinators.
The GJEPC postponed the India International
Jewellery Show (IIJS) Premiere – the country’s
largest jewellery trade fair – earlier this year
due to the COVID-19 pandemic; it had been
scheduled to take place from 6–10 August.
Another major Indian diamond trade event,
Bharat Diamond Week, was held digitally last
week.
Colin Shah, chairman GJEPC, said, “The demand
for gems and jewellery is slowly recovering in
markets like the US, China and other parts of
the world. We need to make sure that we reach
out to these buyers and meet their requirements.
“This is the time to explore the digital world,
and make the best use of it to showcase our
products through virtual medium and help
buyers make informed decisions.”
Vipul Shah, vice-chairman GJEPC, explained
that the VBSM would “give our exhibitors in
“The demand for gems and jewellery
is slowly recovering in markets like
the US, China and other parts of the
world. We need to make sure that we
reach out to these buyers and meet
their requirements. This is the time to
explore the digital world”
– Colin Shah, GJEPC
He added, “I am glad that we have been able to
create an advanced user-friendly set-up which
would give our buyers an experience better than
the real one.
“A series of VBSMs are organised over the next
few months, which would help our buyers across
the world to source gems and jewellery from the
comfort of their homes or offices.”
The diamond VBSM is intended to be the first of
many, with future digital trading events focused
on other categories within the jewellery market,
such as gold, colour gemstones, and platinum.
Jail likely for gold
buyers linked to 2017
store robberies
Judge Scott Johns has indicated Alejandro Mendieta
Blanco (left) will face a custodial sentence for
handling stolen jewellery and watches.
A Melbourne judge has indicated a custodial
sentence is likely for three gold dealers who have
pleaded guilty to receiving stolen goods, which
were taken from jewellery stores during a spate
of armed robberies three years ago.
Alejandro Mendieta Blanco, 34, his brother Julio
Mendieta Blanco, 37, and their associate Chey
Tenenboim, 39, were initially charged with more than
400 offences each following a raid on their business,
Gold Buyers Melbourne, in October 2017.
Police reportedly collected more than 1,900 hours
of surveillance footage, while undercover officers
were able to sell gold jewellery and watches
to Gold Buyers Melbourne for “off the books”
payments without showing identification, as is
required by law.
Earlier this year, all three pleaded guilty to single
charges of receiving stolen goods as part of a
deal with prosecutors and paid back $165,000.
The Mendieta Blanco brothers are currently free on
bail, while Tenenboim’s bail was revoked in mid-July.
At a hearing at the County Court on 31 July, Judge
Scott Johns described the actions of the three men
as “very dishonest, it’s brazen, it’s audacious. There
is no moral compass being applied.”
He added that they were “acting as a customer
for the thief” by running a “particularly lucrative
business”; The Age and The Sydney Morning
Herald report that Gold Buyers Melbourne turned
over $66 million in the 2015-16 financial year.
Judge Johns dismissed a suggestion for a
community correction order for Alejandro
Mendieta Blanco and told his legal representative,
Justin Hannebery QC, that his client should
prepare to serve a prison term.
Prosecutors are seeking a harsher sentence
for Tenenboim as the scale of offending was
larger. Last month David Grace QC, acting for
Tenenboim, requested a community correction
order or a prison term short enough to allow
him to return home for his son’s bar mitzvah
in November. However, Judge Johns said that
Tenenboim was unlikely to be freed before then.
All three men will be sentenced this month.
August 2020 | 21

LUXURY pearl AND opal JEWELLERY
LUXURY pearl AND opal JEWELLERY
LUXURY pearl AND opal JEWELLERY
David Allen returns to lead Pandora Australia
CONTINUED FROM PAGE 18
been compounded by its shift toward company-owned ‘Concept’ stores
while simultaneously alienating retail stockists.
A recent analysis by Jeweller revealed that the number of Pandora
points of sale in Australia has declined by more than 60 per cent
since 2010.
Addressing Pandora’s strategy in Australia, Allen said, “I cannot
comment on the more recent decisions that have been made in the
Australian market regarding network distribution. I do know that
the organisation values the contributions that all of our distribution
channels make to our brand.
“I also know that the shape and structure of this distribution varies
across our Pandora markets globally, and this differentiation can be
based on particular local market conditions and on how established the
brand is,” he added.
“I’m grateful to have David take on a new responsibility
and that we can continue to pull on his strength and
business know-how”
– Alexander Lacik, Pandora Jewelry
e are in a situation we never thought we
ould be in. COVID-19 has turned our lives
ide down but there’s always a silver lining
We We are are in in a a situation we never thought we we
would would be be in. in. COVID-19 has turned our our lives lives
upside We upside are down in down a situation but
but there’s we always never a thought silver
a silver
lining we lining
to would to this
this be crisis.
crisis. in. COVID-19 The industry
The industry has and
and turned our community
our our community lives
another. coming together We are to connected encourage and in support isolation. one
coming pside down together but there’s to encourage always a and silver support lining
another. We are connected in isolation. one
o this
another.
crisis. The
We
industry
are connected
and our
in
community
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oming We will together see each to other encourage after this and all support has passed. one
another. We are connected in isolation.
e will see each other after this all has passed.
his crisis. The industry and our community
ing together to encourage and support one
will see each other after this all has passed.
Stay Stay strong and safe!
e will see each other after this all has passed.
Stay strong and safe!
www.ikecho.com.au | enquiries@ikecho.com.au
Tel: (02) 9266 0636 | Fax: (02) 9266 0969
www.ikecho.com.au | enquiries@ikecho.com.au
Stay strong and safe!
Tel: www.ikecho.com.au (02) 9266 0636 | | enquiries@ikecho.com.au
Fax: (02) 9266 0969
Tel: (02) 9266 0636 | Fax: (02) 9266 0969
www.ikecho.com.au | enquiries@ikecho.com.au
When questioned over Pandora Australia’s treatment of retail
stockists, including being forced to take unsuitable pack sizes, Allen
was diplomatic: “Clearly the topic of inventory quality and quantity is
critically important to us as well as our partners. That is understood
and is of course something that the team and I are very focused on.
“The distribution and the performance of our product is critical to
strengthening the connection that our consumers have with our
brand, and we will continue to work on investing in and enhancing
our inventory lifecycle and management processes both locally and
internationally,” he added.
In his new role as general manager of the Pacific division, Allen
will report to Pandora Jewelry’s new chief commercial officer,
Martino Pessina.
Alexander Lacik, CEO Pandora Jewelry, said, “I’m grateful to have
David take on a new responsibility and that we can continue to pull
on his strength and business know-how.“With David’s long standing
experience with headquarter decisions and operations, the move
is yet another step in us shortening the distance between headquarters
and markets.”
The restructuring program is estimated to cost DKK1.3 billion
($AU288.3 million) and is designed to “reduce organisational
complexity” and “ensure that feedback from consumers can more
quickly fuel new concept creations”, according to Lacik.

10 Years Ago
Time Machine: August 2010
A snapshot of the industry events making headlines this time 10 years ago in Jeweller.
Historic Headlines
4 Jewellers expand WA retail presence
4 Fake gemmologist to pay for crimes
4 Sydney set for biggest fair
4 All eyes watching Pandora launch
4 Online scammers target jewellers
Aussie websites openly
selling counterfeits
Jeweller has found Australian websites openly
selilng counterfeit watches and jewellery from
well-known brands, including Tag Heuer, Omega,
Breitling, and Rolex under the guide of ‘replicas’.
When contacted by Jeweller, the director of one
such website, SwissReplicaWatches.com.au,
claimed his actions did not breach any Australian
or international laws and described his business
as necessary due to consumer demand.
However, intellectual property expert Lisa
Egan, a senior associate at law firm Middleton,
confirmed that the term ‘replica’ was incorrect
– copies carrying a brand’s logo are classified as
‘counterfdeit’ goods. Egan said the only way the
site could remain online was if none of the affected
brands had taken action.
Egan said brands could protect their intellectual
property by sending a letter to the website operator
and contacting Google to have the site excluded
from search results.
All eyes watching
Pandora launch
The much-anticipated Pandora watch collection
is on track to launch in Australia in early
September 2010. It will initially be introduced
to consumers in 30 Pandora concept stores and
more than 110 Pandora shop-in-shop retailers.
The collection consists of men’s and women’s
models and features 10 styles with four to five
options available in each style. Prices start at
$295, ranging up to $2,495. One of the selling
points is that the range is Swiss-made and the
watches feature Rhonda movements, sapphire
glass, and a diamond on every winder.
August 2010
ON THE COVER Maxum
Editors’ Desk
4Pay Up: “Some years ago a salesman
offered me the following advice: if you
think education is expensive, you should
try ignorance! [However] there are
many forms of learning, and often the
most valuable are the least costly.
Business education and the ability to
recognise opportunities are perhaps the
most important; staying one step ahead
of your competitors is imperative.”
Soapbox
4Turning Over A New Leaf: “We are
living in a world where design is
highly appreciated, and luxury goods
are attainable for a great number
of consumers.
Why is it then that jewellery designers,
a group who should be at the forefront
of fashion, are content to churn out
the same designs year after year?
To enable the jewellery industry to
flourish, we need more unique design
that comes direct from the heart.”
– Victoria Buckley, owner, Victoria
Buckley Jewellery
STILL RELEVANT 10 YEARS ON
Shining Silver:
With a brilliant polish, flexible
workability and low price, silver’s unique
allure continues to work its magic
in the jewellery world... Propping up
silver’s profile is the wave of economic
uncertainty that is washing over
luxury consumers, dissuading them
from paying huge premiums for gold
Facebook ‘nipplegate’
A Sydney jeweller found herself at the centre
of a global media frenzy last month after
launching a battle against Facebook.
High-end jeweller Victoria Buckley lashed out
as ‘Midwest American puritanism’ on Facebook
after the social networking site threatened
action against her for having pictures of nude
porcelain dolls posing with her jewellery
products on her fan page.
After a week of global media coverage,
Facebook eventually apologised for censoring
the images and said Buckley could re-upload
them, which she did.
Global tribute to ‘Mr Swatch’
Politicians, business people and celebrities
were among the thousand people who flocked
to Switzerland for a public ceremony to pay
tribute to Swiss watch legend Nicolas Hayek,
who died unexpectedly on Monday 28 June.
Hayek, who was still Swatch chairman when he
died aged 82, founded the company in the early
1980s and is widely credited with breathing life
into the declining Swiss watchmaking industry..
His death sent shockwaves through the
Swiss business community, even prompting
the country’s president, Doris Leuthard, to
release a statement. “With his commitment
and courageous actions, Nicolas Hayek for
decades gave big and important boosts to
entrepreneurship,” Leuthard said. “We owe Mr
Hayek a lot.”
READ ALL HEADLINES IN FULL ON
JEWELLERMAGAZINE.COM
24 | August 2020

Peter W Beck has been passionately committed to the
jewellery industry for 45 years.
Please be assured that we are still here and we will continue to provide
you with the world class products and services that you rely on.
We stand beside you through this tough time and beyond.
OUR TEAM IS HERE TO SUPPORT YOU:
Toll Free 1800 888 585 | Email customerservice@pwbeck.com.au
14 Duncan Court, Ottoway Park, SA, 5013 Australia
Toll Free 1800 888 585 | Email customerservice@pwbeck.com.au | Web www.pwbeck.com.au

INSIDE
My Store
The Collective
DUBLIN, IRELAND with Emma Counihan, lead interior designer and assistant to the director • SPACE COMPLETED October 2019
4Who is the target market?
We are proud to reveal that clients from every walk
of life come through our doors and so for us, it
was pivotal that our store was a safe place where
everyone felt welcome.
Nestled in the heart of Dublin’s renowned Creative
Quarter, The Collective is a two-storey treasure
trove, featuring stunning designs from more than 30
independent jewellery designers, the overwhelming
majority of which call Ireland home.
Our goal has always been to support the craft
and embrace the incredible unique style of each
of our artists by creating the perfect backdrop to
showcases their designs.
Drury Street, and the building itself, is steeped in
history and charm and our intention was to create
“Each of the 100-year-old
alcoves that make up the
space have been lovingly
tailored with bespoke polished
brass and glass shelving,
illuminated to illustrate
a glittering display for
each jewellery designer’s
collection.”
–Emma Counihan
the perfect storm. For us, that meant a marrying of
the past and the future.
As an homage to the building’s past, we uncovered
the natural beauty of the space, showcasing
the exposed brick, embracing the quirky layout
and exhibiting original features such as the two
charming chimney breasts.
Simultaneously, as a toast to the future, we added
in unexpected surprises, like the crittal-style sliding
door and accompanying half-window. The blackframed,
New York-style door leads to our stateof-the-art
studio which hosts our silversmithing
workshops and jewellery courses all year round.
Which features encourage sales?
Often our new clients visit us after a
recommendation from a friend or because
26 | August 2020

something in our window has caught their eye. From
the outset, our priority was for our clients to have an
experience when they visit us and so every element
has been carefully thought out, in order to provide
them with the best possible service.
As our clients step through The Collective doors onto
the restored wooden planked floors, they are greeted
by the scent of ‘Dublin Dusk’ a woody, fresh yet
relaxing fragrance burning in the periphery.
As Dublin is home to Rathbornes, the world’s
oldest candle company, it felt fitting as a nod to the
city’s history.
Each of the 100-year-old alcoves that make up the
space have been lovingly tailored with bespoke
polished brass and glass shelving, illuminated to
illustrate a glittering display for each jewellery
designer’s collection.
Drawing the eye up, the ceiling comprises glass birds
floating from hanging plants, giving a magical and
whimsical feel against the dark, moody backdrop
above. An old restored railway sleeper rests above
one of the chimney breasts, framing a collection of
large, circular golden plinths, inviting your eyes for
a feast of the newest collections.
The counter – the backbone of the store – waits for
you at the end of your journey while also acting as
a gateway to the workshop beyond. The crittal-style
windows behind offer a peak into where the magic
happens!
4What is the store design’s ‘wow factor’?
I think the store’s wow factor is the combination and
flow of all of the separate entities. No one aspect
demands your attention – it is rather like a collection
of little surprises that draw you in!
August 2020 | 27

Ready
Get
Polish your gemstone
knowledge online
From lapis lazuli and coloured diamonds to
synthetic moissanite and zebra rock, brush up
on your gemstone knowledge in the downtime.
The GAA has over 14 years of gemmology
articles freely available to read online
on Jewellermagazine.com.
Learn About Gemstones with
the GAA on Jewellermagazine.com
ADELAIDE BRISBANE HOBART MELBOURNE PERTH SYDNEY
Passionately educating the industry, gem enthusiasts
and consumers about gemstones
learn@gem.org.au | 1300 436 338 | www.gem.org.au

REVIEW
Gems
CANDLELIGHT
MIXED LIGHT
DAYLIGHT
L to R: Omi Privé alexandrite rings; Rubius loose Alexandrite; Alexandrites under different light
The exotics: colour change gemstones
Magicians have used the illusionary power of
light for centuries, but consider a gemstone
that could harness this power to create a
different kind of magic show.
Introducing colour change gemstones: the
perfect illusionists to take centre stage
upon any wrist, finger or neck.
Colour change gemstones are
commanding a growing audience, and
the price of admission ranges from the
surprisingly affordable to the seriously
stratospheric.
These rarities are chameleons of the
gemstone world, coveted for their ability to
change colours in different light.
The human eye perceives light in the visible
spectrum, comprised of red, orange,
yellow, green, blue and violet wavelengths.
Colour change gemstones have two
transmission windows in the visible
spectrum of roughly equal size, and the
nature of the illumination dictates the
perceived colour.
For example, alexandrite is coloured by
the trace element chromium that produces
transmission windows in red and blue
wavelengths.
As candlelight is rich in red wavelengths
and daylight is rich in green/blue
wavelengths, alexandrite looks red when
viewed in candle light and green when
viewed in daylight.
This effect is applied to any gemstone with
an ability to transmit two (or more) different
ranges of wavelengths and is known as
“the alexandrite effect”.
The value of these extraordinary gemstones
is primarily based on the strength of the
colour change (weak, moderate or strong),
followed by the actual colours of the stone.
Factors such as size, cut and clarity are
less important due to the rarity of the
colour change phenomenon.
Locations like Madagascar, Sri Lanka,
Burma, east Africa, Russia and Turkey
are rich sources of these gemstones.
Top billing in any colour change
performance is alexandrite, a rare variety
of chrysoberyl originally found in the Ural
Mountains and named after Czar Alexander
II of Russia.
The finest specimens display a vivid
bluish-green in daylight and a purplishred
in incandescent light. Fine quality
Russian alexandrites larger than one carat
command a premium.
For an exotic twist on a conventional stone,
there is colour change sapphire, a variety
Alexandrite
Named for Czar
Alexander II of Russia
Colour: Deep green
when viewed in
daylight, purplish-red
in candle light
Found in: Russia, Sri
Lanka, Zimbabwe,
Burma, Tanzania,
Madagascar, India
and Brazil
Mohs Hardness: 8.5
Class: Chrysoberyl
Lustre: Vitreous
Formula: BeAl 2
O 4
of corundum. The most popular type
changes from blue or violet in daylight to
violetish purple or strong reddish purple in
incandescent light.
Another very rare variety changes from
green to reddish-brown.
A well-kept secret is Australian colour
change sapphires from the central
Queensland gemstone fields that display
some unusual colour changes – brown to
green, yellow to pink, or golden orange to
orangey-green.
Another twist on a favourite is colour
change garnet, either pyrope type or a
mixture of pyrope and spessartite varieties.
These gemstones change from a deep
green or blue-green in daylight to red or
purple in incandescent light.
Rivalling alexandrite and sapphire for
hardness and durability is colour change
spinel. This chameleon can change from
blue to purple or from light bluish-violet
to light pink, resembling colour change
sapphire without the hefty price tag.
The captivating magic of colour change
gemstones will far outlive any show, and
as prices of conventional gemstones in fine
qualities are rising, these exotics present
alternatives for those who demand unique,
collectible gemstones.
August 2020 | 29

STRATEGY FEATURE
Retail Rent Review
SEEING
EYE to EYE
RETAIL RENT REVIEW
The COVID-19 pandemic has caused the bubbling tension between
retailers and landlords to boil over – but the crisis has cleared the way
for a new paradigm, writes ARABELLA RODEN.

BY THE NUMBERS
Retail Reality
Leasing premises is one of the highest
fixed costs associated with traditional
retail, alongside staff. Yet unlike staff
contracts, lease agreements are largely inflexible
– often with fixed minimum terms of five years
– and can increase beyond inflation for years
at a time regardless of trading conditions,
demanding tenants sacrifice margin or
constantly increase sales.
During good economic times, these fixed terms were
somewhat tolerable for businesses. However, the retail
environment has become increasingly challenging in
recent years; changing consumer habits, shrinking
margins, and increased competition have all served to
erode profitability.
Simon Fonteyn, managing director of retail leasing data
firm LeaseInfo Group, says, “Over the past five years, there
has been an increasing amount of capital required for
retailers to do business. In terms of leasing structures,
rents have generally been outstripping sales. Typically,
rents have escalated between 4–5 per cent per annum,
whereas retail sales have increased by, on average, 2 per
cent per year.”
Fonteyn says there was already a “shake-out” occurring
in the sector prior to the COVID-19 pandemic, pointing to
the high-profile collapse of several fashion and footwear
retailers – such as Bardot, Ed Harry, and Ziera – in 2019.
The arrival of the virus in January 2020 “accelerated
and amplified cracks that were already visible” in the
retail sector, according to the KPMG white paper Beyond
COVID-19: The Shifting Foundations in Retail Property,
which was published in June 2020.
“Retail precinct footfall had been in decline for years as
e-commerce penetration grew – recording 8.1 percent in
cumulative footfall losses over the three years to 2020.
Retailer profit margins and retail landlord yields were
being squeezed since 2017 and consumer confidence had
been in decline for most of 2019,” the paper’s authors note.
By mid-year, the Australian economy was in recession for
the first time in nearly three decades, and the effective
unemployment rate had reached 13 per cent, according to
Federal Treasurer Josh Frydenberg.
Consumer spending see-sawed, with the Australian
-8.1%
overal retail precinct
footfall decline,
2017–2020
KPMG, Beyond COVID-19:
The Shifting Foundations of
Retail Property
4–5%
average yearly
increase in retail
rental cost
Simon Fonteyn
analysis
1,338
shopping centres
in Australia
The Retail
Doctor Group
5.1%
vacancy rate in
shopping centres,
June 2020 – a
20-year peak
JLL Australia
12%
proportion of
Australian retail
sales that took
place online in
March 2020
Australia Post, 2020
eCommerce Industry Report
Bureau of Statistics (ABS) recording the most precipitous
fall and meteoric rise in retail trade figures consecutively
in April and May. At the same time, foot traffic at shopping
centres and retail precincts collapsed by up to 80 per cent,
leaving businesses out in the cold.
In the midst of the unforeseen and turbulent conditions
precipitated by the virus, Paul Zahra, CEO of the Australian
Retailers Association, notes that some landlords have
been unwilling to accept this new reality.
“The challenges endured by retailers over the course of
the pandemic have put a spotlight on the high cost of
rents,” he explains.
“Unsustainable annual increases to rent have been
a persistent problem for some time now, with rents
far outpacing revenue growth amid a changing retail
environment. We expect many stores will require ongoing
rent relief to help them recover – and when retailers win,
landlords win.
“Unsustainable annual increases to rent have
been a persistent problem for some time now,
with rents far outpacing revenue growth amid
a changing retail environment.”
Paul Zahra, Australian Retailers Association
“Landlords need to remember that we are in a recession.
It’s a false economy for landlords to try to extract rent from
retailers that need cash reserves to survive,” he adds.
Peter Ryan, director of retail strategy firm Red
Communication, predicts that retailers will be in ‘survival
mode’ for at least the next two years as a result of the
pandemic. “Foot traffic is down, there has been a ‘forced’
shift to online retail, and sales and margin are under
enormous pressure,” he says.
“As household disposable incomes succumb to economic
pressure, stores will be subjected to intense pressure –
some of it appropriate, a lot of it unwarranted. Lease costs
and inclusions must be reduced or they run the risk of
becoming uneconomic.
“No retailer will be able to support high rents any longer
and therefore renegotiating terms is a critical success
factor both in terms of survival and growth,” Ryan says.
August 2020 | 31

RE A L ESTATE GI A NTS
Australia’s
Largest
Retail Property
Groups by Gross
Lettable Area
It’s a conclusion supported by the KPMG paper, which
notes, “Even if COVID-19 is quickly resolved, retailers
and landlords will need to ‘lean in’ to create a new and
more sustainable retail business model, which in turn will
require adaptations to the property model.”
Given the impact of the pandemic, the questions to
be answered remain: what will the retailer-landlord
relationship look like, post-COVID, and how can retailers
shift the balance toward more favourable terms?
Examining the retail landscape
According to analysis by the Retail Doctor Group’s Brian
Walker, Australia has 1,338 shopping centres, which
comprise 85 per cent of stores and attract 85 per cent of
overall shopping visitation.
These shopping centres are, in the main, owned and
operated by real estate companies including Scentre
Group, Vicinity Centres, and Stockland, many of which are
publicly traded.
ASX: SCG
37 shopping centres in
Australia and 5 in NZ
Approximately
3.8 million sqm
lettable retail space
ASX: VCX
64 shopping centres
Approximately
2.5 million sqm
lettable retail space
officer of large chain The Jewellery Group (TJG), which
operates 67 stores under the Mazzuchelli’s and Zamels
brands. Notably, TJG’s store count has decreased dramatically
since 2010, when it operated more than 120 stores.
When asked about the challenges of negotiating leasing
agreements, he said, “Landlords were unilaterally
considering only their property valuation and returns, with
less scope to look at the retailer’s commercial viability of
operating the store.”
He added, “There was lots of pushback in negotiating the
multiple stores as one portfolio, as they were stating that
each store has different cost dynamics and the owners’
expectations were different.”
When negotiating the terms of a lease, the retailer has
historically been at a disadvantage, with Ryan noting that
retailers have often had to supply trading information
to landlords “only for them to turn around and use that
information to negotiate onerous terms based on a
percent-of-sales formula”.
85%
OF RETAIL VISITATION TAKES
PLACE IN SHOPPING CENTRES
Ideally, the relationship between retailer and landlord
is one of mutual benefit; while the latter collects rental
income, the former is meant to enjoy increased and highquality
footfall as well as reduced occupancy cost.
Yet it is not always so. Frank Salera, director Salera’s –
a jewellery chain which has been dealing with landlords
since 1953 and operates 20 stores across Victoria
and Queensland – observes, “The key challenge is
that landlords seek to maximise the returns to their
shareholders, who expect year-upon-year increases –
and this objective is irrespective of the challenges of
increasing retail performance, which is often declining.
“This results in a situation where now, more than ever,
retailers are required to ‘throw the keys on the table’ [threaten
to vacate] before the landlords will consider a rent that affords
the retailer a minimum return on investment.”
It’s a perspective shared by Balaji Sambasivam, chief financial
ASX: SGP
35 shopping centres
Approximately
1.02 million sqm
lettable retail space
QIC Global Real Estate
Government-owned
13 shopping centres
ASX: GPT
12 shopping centres
Approximately
960,800 sqm
lettable retail space
“The key challenge is that landlords seek to
maximise the returns to their shareholders,
who expect year-upon-year increases –
and this objective is irrespective of the
challenges of increasing retail performance,
which is often declining.”
Frank Salera, Salera’s
Zahra also describes another “information imbalance”:
“Smaller retailers, in particular, don’t fully know their rights
and what they can ask for. Landlords are in the business of
collecting rent, whereas for retailers, rent is just one of many
parts of the business they need to manage.”
Additionally, many Australian states and territories have
required a minimum five-year term for commercial leases.
While providing stability for retailers and security for
landlords, these terms have made it more challenging for
retailers to respond to downturns.
As a result, several states have taken steps to amend the
legislation governing commercial leases.
“In NSW, which accounts for about a third of all Australian
retail, there used to be a requirement of minimum five-
32 | August 2020

Retail Rent Review | STRATEGY FEATURE
NO RESOLUTION OUTCOME
ALTERNATIVE FUTURE: THE RETAIL LANDSCAPE
If current trends continue unabated, without
a flexible and reasonable response from
landlords, the retail landscape in Australia
could look dramatically different in the
coming years.
Overall, retail footfall has been in decline
since at least 2017 and at an accelerating
rate – which will likely continue as
e-commerce penetration increases.
Yet over the same period, rents have
increased, on average, by 4–5 per cent
per year, according to LeaseInfo Group
managing director Simon Fonteyn.
Tellingly, the vacancy rate across Australian
shopping centres reached its highest rate in
more than 20 years – 5.1 per cent – in June
2020, according to data from commercial
real estate firm JLL Australia.
For CBD-based shopping centres, the
vacancy rate is at more than 10 per cent.
Shopping precincts and strips have fared
even worse; an analysis by real estate
advisory firm Plan1 Project Management
found that Melbourne’s Chapel Street had
a vacancy rate exceeding 20 per cent
in June 2020.
Across the city’s 11 major retail strips, the
vacancy rate was 12.3 per cent, an increase
of more than 4 per cent when compared
with 2018.
Speaking at the Australian Financial
Review’s Virtual Retail Summit earlier this
year, Julia Forrest, a portfolio manager at
investment firm Pendal Group, speculated
that vacancy rates would likely increase
further, and that more retailers would opt
for holdovers – month-to-month contracts –
rather than long-term leases.
Peter Ryan, director of retail consultancy
RED Communication, says “The economic
reality is that we face an extended period
of poor market conditions with some
economists suggesting the impacts could
last a decade or more and that we have not
seen the worst of it yet.”
“The economic reality is that we
face an extended period of poor
market conditions with some
economists suggesting the impacts
could last a decade or more and
that we have not seen the worst
of it yet.”
Peter Ryan, RED Communication
However, Ryan believes “online is only part
of the solution” and that stores will “regain
their position as the centre of the customer
relationship – [but] when that happens
though is the critical question.”
Without a sustainable reduction in rent,
Ryan says retailers will face increasing
pressure to exit tenancies.
Meanwhile, Fonteyn argues that shopping
centres will not disappear from the
Australian landscape – but that they will be
“forced to change”: “Their model is getting
shoppers in, getting them to spend, and
getting them to stay as long as possible.
“After
COVID-19,
that has to be readjusted.
There will
be another iteration of
different types of use within
shopping centres.”
He adds that shopping centre
owners are constrained by strict
planning laws. “It’s not that easy to
introduce new shopping centres.
“There have been a couple of new centres
built [in the past 10 years], but the majority
have been there for decades and have
simply expanded their trading area.”
However, the shift toward mixed-use,
including residential, offices, services, and
lifestyle, may be hampered as consumers
increasingly opt to avoid crowded spaces
due to safety concerns.
Additionally, the KPMG white paper Beyond
COVID-19: The Shifting Foundation of Retail
Property notes that ‘destination shopping’
at large-scale centres is in decline, with
consumers increasingly preferring to spend
locally in what is referred to as ‘village
shopping’.
At the same time, replacing tenants has
become “increasingly difficult”, with
landlords “having to work much harder to
attract new tenants and repurpose their
centres to make them relevant to their
communities.”
In order to justify rental costs, the report’s
authors suggest that landlords provide
“supporting infrastructure” for retailers
who are moving toward omni-channel
sales, such as “kerb-side pick-up zones,
dark stores/floors, shared click and collect
counters, or parcel lockers”.
If these changes do not occur, the value
of shopping centre assets will continue to
decline – as will the Australian retail sector.
August 2020 | 33

1
0%
0% Investments by retailers and landlords in
Australian retail footfall had been in decline for years - 1%
1
before COVID-19
the shopping Investments experience Australian by retailers had been and consumer landlords in confidence
- 1% working to the reduce shopping the experience rate of footfall had been decline
12 month rolling average YoY growth rate
- 2%
Index (>100 = positive outlook)
1
STRATEGY FEATURE | Retail Rent Review
working to reduce the rate of footfall decline
Jan 2017 – Mar 2020
- 2%
Jan 2017 – Apr 2020
- 3%
1
- 3%
- 4%
150
1
0%
- 4%
Australian retail
Investments by retailers and landlords in
- 1%
- 5%
140
1
footfall had been
the shopping experience had been
- 5%
working to reduce the rate of footfall decline
in decline for years
- 6%
- 2%
- 6%
130
before COVID-19
- 7%
- 3%
- 7%
120
12 month rolling average
2017 2017 2018 2018 2019 2019 2020 2020
YoY growth rates from - 4%
110
January 2017 – March 2020
2017 2017 2018 2018 Positive 2019outlook
2020 2020
- 5%
-3.9% -3.9% -6.7% 100-6.7% -8.1% -8.1% -11.7% -11.7%
Source: KPMG report,
Negative outlook
using ShopperTrak data,
- 6%
90
Jan 2017-March 2020
. .
- 7%
80
Consumer confiden
2017 2018 2019
2020
Cumulative Cumulative % growth % in growth footfall in footfall since 2016 since 2016
70
deteriorating prior t
2017 2018 2019 2020
Notes: (1) Based on ShopperTrak 60 data, ShopperTrak uses in-store foot traffic counters to collate foot traffic data;
-3.9% -6.7% -8.1% -11.7%
Notes: (1) Based on ShopperTrak data, ShopperTrak uses in-store foot traffic counters to collate foot traffic data; (2) G
Sources: Livewire Markets, Chart of the day: foot traffic for Australian retailers; AFR, Weak retail spending an un
Sources: Livewire Markets, Chart of the day: foot traffic for Australian retailers; AFR, Weak retail spending an uninten
year terms, but that has now changed [with in penalties for parties “not providing
2019; ANZ - Roy Morgan Australian consumer confidence; KPMG analysis (2020)
2019; the ANZ right - Roy Morgan different Australian types consumer of confidence; shoppers KPMG throughout analysis (2020) the day.”
10
legislation passed in 2017],” Fonteyn explains. information or doing the right thing, or seeking
. It’s a trend Salera has also observed: “With
information they are not required to,” according
In South Australia, amendments to the Retail
or without COVID,
Cumulative % growth in footfall since 2016
2017
the centres have spent
2018
the
to Chapman. These penalties had not been
2019
And Commercial Leases Act came into force
last few years in considering how to maintain
updated since 1995.
in June and have streamlined the process for
centres as a hub of consumer activity. In the
acquiring a certified exclusionary Notes: clause (1) Based to on ShopperTrak In the data, past ShopperTrak five years, uses Fonteyn in-store notes foot traffic that counters shopping to collate foot past, traffic specialty data; (2) Growth retailers rate from and previous department to current year’s stores 12-month average (e.g. Jul 16
shorten a lease term.
Sources: Livewire Markets,
centre
Chart of
landlords
the day: foot
have
traffic
also
for Australian
made
retailers;
significant
AFR,
efforts
Weak retail spending formed an unintended the basis consequence of attracting of the shoppers banking royal to commission; Savills Research Qua
2019; ANZ - Roy Morgan Australian consumer confidence; KPMG analysis (2020)
The changes also provide added protection and
to improve footfall, namely by shifting the retail mix centres, which then created a demand for food
reduce confusion for small and medium retail toward services and lifestyle.
and lifestyle – such as cinemas.
tenants. John Chapman, South Australian Small
“The apparent trend is that now landlord owners
Business Commissioner, explains that the
are focusing on food and lifestyle as the primary
amendments resulted from a lengthy period of
attraction for consumers, who will then frequent
consultation and an independent judicial review.
the specialty stores.”
“Some of the changes that have flowed through
include that landlords will be required to provide
prospective tenants with a disclosure statement
and a draft lease as soon as negotiations
commence,” Chapman says.
“What that is aiming to do is make sure people
have as much information up front so they can
go away and think about it early. That provides
transparency around the stages of negotiation.”
Additionally, the South Australian Small
Business Commission has produced a Retail
Commercial Leasing Guide, which is now
required to be provided to prospective tenants.
“This document is very much aimed at helping
tenants understand their obligations and what
a lease may contain, with frequently-askedquestions
and indeed tips on what to look out
for,” Chapman says.
Other changes include a “significant increase”
“Shopping centres have tried, generally,
to change the mix to ‘experiential’
retailing – lifestyle precincts, casual
dining precincts, gyms – and away
from more traditional retail...
Unfortunately that has backfired
during COVID-19 because experiential
retail has been hardest hit.”
Brian Fonteyn, LeaseInfo Group
“Shopping centres have tried, generally, to
change the mix to ‘experiential’ retailing –
lifestyle precincts, casual dining precincts,
gyms – and away from more traditional retail
like apparel and footwear. Unfortunately that has
backfired during COVID-19 because experiential
retail has been hardest hit,” he explains.
“Centres have also become more ‘all hours’ –
opening early and closing late – and they appeal to
As Fonteyn notes, the viability of the lifestyledriven
strategy has been significantly hampered
by COVID-19, at least in the short-term. Whether
footfall will recover to previous levels remains
to be seen, given that COVID-19 has also
accelerated another major retail trend of the
past five years: e-commerce.
Facing the headwinds
COVID-19 dealt a devastating blow to the
Australian economy, plunging it into recession
and increasing the official unemployment rate to
7.5 per cent, its highest level in 22 years.
At the same time, shopping centre footfall
declined by more than 80 per cent in 2020, when
compared with 2019, during the nationwide
lockdown. It remains about 20 per cent lower
in states that have emerged from restrictions,
according to data from ShopperTrak.
“The higher the footfall, the more time consumers
7.5%
AUSTRALIAN
UNEMPLOYMENT
RATE, JUL ‘20
82.5%
INCREASE IN
E-COMMERCE
SALES FOR ALL
RETAILERS, APR ‘20
80%
DECLINE IN
SHOPPING CENTRE
FOOTFALL, Q1 2020
34 | August 2020

Retail Rent Review | STRATEGY FEATURE
dwell and the more confident consumers are in
their financial wellbeing, the more money they
spend with retailers, who can then pay rent to
landlords and make a profit.
“The COVID-19 physical distancing measures
and the resulting recession work against all
three of these value drivers – footfall, dwell times
and consumer confidence,” notes the KPMG
white paper.
For practical reasons, consumers increasingly
turned to e-commerce while under lockdown and
have adapted to its convenience. The Australian
Financial Review reported that in August 2020,
e-commerce sales increased 56 per cent for
omni-channel retailers when compared with
April 2019. For online-only retailers, the figure
was 109 per cent.
The shift – however temporary – away from bricksand-mortar
shopping has placed significant pressure
on retailers and landlords alike.
Vicinity Centres – which operates 60 shopping
centres across Australia, including Melbourne’s
Chadstone and Chatswood Chase in Sydney
– was recently forced to launch a $1.4 billion
capital raising to mitigate the decline in rental
income, while its overall real estate portfolio
declined in value by $1.8 billion for the first half
of the year.
While retail sales fell a record 17.7 per cent in
April due to widespread lockdowns, the figure
rebounded 16.3 per cent in May as government
stimulus flowed through to consumers and
businesses, before stabilising in June.
TRENDS OVER TIME
CENTRE OF
CHANGE: RETAIL
EVOLUTION
Since 2015, several major trends have
been noted in shopping centres. These
have occurred as a result of changing
consumer behaviour as well as external
pressures on specific categories within
the retail sector.
Foot traffic has been driven by different
factors: The number of department
stores and discount department
stores in shopping centres has been
shrinking, but grocery stores – such
as Woolworths – and lifestyle
businesses, such as gyms, as well
as cinemas have been making up
some of that lost foot traffic.
Shopping centres have become
more ‘all hours’: Early opening and
late closing has increased in order to
appeal to different types of shoppers
throughout the day.
A move toward mixed-use
development: Shopping centre
landlords have shifted their model
to include a combination of retail,
residential, and offices. In the future,
this mixed-use model could also
include hotels.
Instability in the discretionary retail
sector leading to changing tenancy
mix: Retailers, particularly in fashion
and footwear, have been vulnerable due
to a combination of factors, in particular
increased competition from large
international entrants to the market, as
well as online-only fast retailers. This
has led to a ‘shake out’ of such tenants.
However, the spending was largely concentrated
in necessities such as groceries, hardware, and
homewares. Fonteyn said the jewellery category
had been “heavily impacted”, though urban
areas had again borne most of the brunt.
With bricks-and-mortar retailers across
discretionary categories in dire straits, the
necessity of rent reductions, waivers, and
deferrals became clear.
“Meeting rental obligations is a significant
concern for retailers, with many stores still
suffering diminished revenue, particularly
discretionary retailers and stores in CBD or
tourist-dependent locations,” Zahra says, adding
that retailers would also incur costs due to
COVID-19 safety requirements.
On 7 April, the National Cabinet released a
Commercial Tenancy Code of Conduct to guide
good-faith rent renegotiations between retailers
and landlords.
At the time, Peter Allen, CEO of Westfield owner
Scentre Group and chairman of the Shopping
Centre Council of Australia (SCCA), said, “We
all accept that retail leases are legal obligations
and enshrined in the laws of the states and
territories, yet we are also commercial people
and we understand there needs to be many
factors taken into consideration as we come to
an agreement on temporary arrangements.
“Our aim is, in a proportionate and measured
way, to share the financial risk and cash flow
impact during the COVID-19 [pandemic] with the
interests of all our stakeholders.”
17.7%
FALL IN RETAIL
SALES, APR ‘20
12.3%
16.3% 2%
VACANCY RATE
INCREASE IN RETAIL
SALES, MAY ‘20
OF MAJOR
MELBOURNE
RETAIL STRIPS
AVERAGE YEARLY
INCREASE IN TOTAL
RETAIL SALES
August 2020 | 35

STRATEGY FEATURE | Retail Rent Review
INSIGHTS
The Response
to COVID-19
When it comes to
assessing the impact
of COVID-19 on
shopping centres,
Simon Fonteyn,
managing director
of retail data firm
LeaseInfo Group,
argues that the
figures paint a
nuanced picture.
“[The impact is]
location-specific,
sector-specific,
geographically
specific – and within
shopping centres,
certain categories
are doing better than
others. Generally
speaking, the
smaller shopping
centres – what we
IMPACT ON SHOPPING CENTRES
PAIN AND GAIN
% change
by precinct
format
Sm all shopping
centres
Large format
stores 2
Medium
shopping c entres
Major
retail strips
Large shopping
centres
Me lbourne
CBD
Outlet
precincts
Reference periods
A vs. BA vs. C
27/01 –1 6/03 27/01 –2 7/04
-20%
-10%
-19%
-30%
39%
-47%
14%
-32%
-39%
-45%
-59%
-66%
-87%
-87%
Impact of COVID-19 on shopping centre
footfall by type. Source: KPMG/GapMaps.
term Neighbourhood centres – have been the least impacted
because customers are tending to spend and shop locally,
particularly for groceries. The most impacted have been
CBD shopping centres, for obvious reasons: the lack of office
workers and no international tourists,” he explains.
“In between those, in general the bigger the shopping centre,
the more impact has been felt, usually because of what their
mix entails. The exception to that rule would be shopping
centres in regional areas, which have not been impacted to
the extent of metro areas.” Fonteyn’s analysis is supported by
data from KPMG and GapMaps (see chart, above).
In terms of shopping strips or precincts, Fonteyn says the data
point to even more of a “mixed bag”.
“Some have been devastated by COVID-19. As an example, I
was recently at a strip mall in northwest Sydney which used to
be very busy, and the number of vacancies astounded me. Strip
malls have been affected because a lot of the businesses that
tend to go there are SMEs [small and medium enterprises] and
they have been hit really hard.”
“There are also high vacancy rates in Oxford Street in Sydney
and Chapel Street in Melbourne – the fashion districts – and
that gives you an idea that it’s really a mosaic.”
This information should be taken into account when predicting
how centres may recover in the medium- and long-term.
Paul Zahra
Australian Retailers
Association
“Many landlords are treating
the Code’s minimum
provisions for rent relief as
their maximum requirement,
and are unwilling to offer
rent abatement higher than
50 per cent of the total rent
relief. However, it is unfair to
be entirely critical, as we’ve
also received a lot of positive
feedback.”
Peter Allen
Scentre Group & Shopping
Centre Council of Australia
“We all accept that
retail leases are legal
obligations and enshrined
in the laws of the states and
territories, yet we are also
commercial people and we
understand there needs to
be many factors taken into
consideration as we come to
an agreement.”
John Chapman
South Australian Small
Business Commissioner
“The vast majority of the
[mediations have been]
successful with the parties
in agreement. We don’t
expect a lot to go to court.
What we are finding is that
a lot of people, once we go
to the other party, come to a
resolution. They go away and
start talking again, and that’s
a great outcome.”
Between March and May, SCCA members were able to complete
more than 6,400 revised rent agreements with small and
medium-sized retailers, representing approximately 45 per cent
of those who had requested relief.
As of 14 August, the SCCA’s assistance extended to retail tenants
totalled $1.6 billion.
Angus Nardi, executive director SCCA, said, “Our industry has
provided substantial rental assistance to both SME [small-andmedium
enterprise] and non-SME retailers... We have strived
to strike a balance between helping those who need it while
at the same time confronting our own financial pressures in
the face of ongoing disruptions to regular trading to protect
public health.”
He added that SCCA members would continue “working closely
and co-operatively” with SMEs, saying, “It is in our commerical
interests as well as the broader economy that SMEs have
longevity within our centres as they provide products and
services our customers want and support local jobs.”
“It is in our commercial interests as well as the broader
economy that SMEs have longevity within our centres
as they provide products and services our customers
want and support local jobs.”
Angus Nardi, Shopping Centre Council of Australia
Meanwhile, Grant Kelley, CEO Vicinity Centres, has drawn ire for
suggesting that lease agreements could include base rent plus
a variable component based on retailers’ e-commerce sales,
justified by bricks-and-mortar stores acting as ‘showroom and
fulfilment channel’.
Across the retail spectrum, the ARA’s Zahra reveals that
renegotiation results have been moderately successful: “We have
heard from retailers that the majority of landlords are sticking
strictly to the provisions specified by the National Cabinet’s Code
of Conduct, however some landlords are extending better offers
than the code requires which is welcome feedback.
“Disappointingly, we have heard that many landlords are doing
as little as possible under the law. Many landlords are treating
the Code’s minimum provisions for rent relief as their maximum
requirement, and are unwilling to offer rent abatement higher
than 50 per cent of the total rent relief,” he says.
“However, it is unfair to be entirely critical, as we’ve also
received a lot of positive feedback. One medium-sized landlord
36 | August 2020

Retail Rent Review | STRATEGY FEATURE
Top 3 retail categories offered
rental assistance
26%
21%
14%
CAFES, FOOD CATERING & TAKEAWAY
RETAIL SERVICES (I.E HAIRDRESSERS,
KEY-CUTTING & SHOE REPAIR)
CLOTHING, FOOTWEAR &
ACCESSORIES
AT THE TA BLE
Approaching
Negotiation
wrote to all tenants to advise them of a six-month holiday for
rental payments to affected tenants.”
The most potent and visible example of the conflict between
retailers and landlords has been the public campaign of Premier
Investments, Australia’s largest retail tenant and the owner of
brands such as Peter Alexander, Just Jeans and Smiggle.
Led by chairman Solomon Lew and CEO Mark McInnes,
Premier refused to pay rent during a six-week shutdown in
the first wave of the pandemic, and has since advocated for a
percentage-of-sales-only model.
Prominent chains, such as jeweller Michael Hill and fashion
retailer City Chic, chose to rationalise their store network and
close locations due to the intransigence of landlords.
In the jewellery category, Salera said his business was offered
the opportunity to renegotiate with landlords, but the terms
were “not acceptable”.
In contrast, Sambasivam said The Jewellery Group’s
landlords were “by and large more than willing to discuss the
opportunities to defer, renegotiate or waive rent”.
On the state level, support has been extended by various
governments to assist retailers. The Victorian Government
launched the Commercial Tenancy Relief Scheme in March,
which included a six-month moratorium on evictions for SME
tenants who had applied for rent relief and were participating
in the JobKeeper scheme.
Judy O’Connell, Victorian Small Business Commissioner, told
Jeweller, “We want to help tenants and landlords negotiate
the best possible rental outcomes, so they have one less
thing to worry about and can focus on coming out of this
pandemic in good shape. We’re confident the new reforms to
commercial tenancy laws will give tenants and their landlords
the much-needed support and security they need during
these incredibly tough times.”
By July, O’Connell’s office – the Victorian Small Business
Commission – had received 825 applications to resolve rent
disputes; of those that were finalised, 96 per cent resulted in
rent relief for the tenant.
Meanwhile, Chapman said the South Australian Small Business
Commission had seen a doubling of lease-related work in the three
months to June, including almost 80 disputes.
“The vast majority of the [mediations have been] successful with
the parties in agreement. We don’t expect a lot to go to court. What
we are finding is that a lot of people, once we go to the other party,
come to a resolution. They go away and start talking again, and
that’s a great outcome,” Chapman said.
Judy O’Connell
Victorian Small Business
Commissioner
“We want to help tenants and
landlords negotiate the best
possible rental outcomes, so
they have one less thing to
worry about and can focus on
coming out of this pandemic
in good shape. We’re
confident the new reforms
to commercial tenancy laws
will give tenants and their
landlords the much-needed
support and security they
need during these incredibly
tough times.”
Jane Cohen
KPMG
“I don’t necessarily think
retailers will be able to get
more out of the landlords,
but both will be able to
create more value if they
shift to a more collaborative
approach.”
Peter Ryan
RED Communication
“The problem about
renegotiating rent is one of
fairness to both parties. A
landlord must get a return on
investment or the asset will
become starved of capital
and operational expenditure
– and that includes
promotions which attract
customers.”
RENT READY
NEGOTIATION CHECKLIST
FOR RETAILERS
Assessment
Examine your business model and decide whether it is
viable
for the long-term: what is the existing occupancy
cost, and what is a sustainable rent going forward? How
expensive is the store fit-out and how long will it take to
amortise the cost?
Analyse market trends and uncertainty to determine
whether a short, flexible lease is preferable to a longer term
Analyse the performance of your store and the shopping
centre or precinct: is it in the best possible location in terms
of the centre’s retail mix, and delivery of quality foot traffic?
Would it be better suited to another area, or even moving to a
shopping strip?
Given the changes in consumer behaviour, how is the
shopping centre management planning to support retailers
and drive foot traffic over the next two to five years?
Education
Seek advice from your buying group or industry
organisation, such as the Australian Retailers Association:
inform yourself about the landlord’s obligations, what you are
entitled to as a tenant under legislation, and what you are not
required to provide – such as cash flow projections or financial
statements
Refer to the relevant retail tenancy legislation in your state
– several have been updated in recent years with increased
protections and flexibility for tenants
Check your relevant Small Business Commissioner’s
website for guidelines and frequently asked questions
regarding commercial tenancies
Negotiation
Bring an attitude of fairness and good faith to the
conversation, but recognise that the survival of your business
is paramount
Be honest with the landlord about what you can afford
The Australian Retailers Association recommends retailers
avoid signing a non-disclosure agreement, as this limits
their options for collective bargaining
If you are unable to come to an agreement, seek support
from your state or territory’s relevant Small Business
Commissioner, as many are equipped to provide mediation
services at low or no cost
August 2020 | 37

STRATEGY FEATURE | Retail Rent Review
KEY
TRENDS
FOR
RETAILERS
He added, “There will be those periods for
businesses who were shut down and a lot
of them have already come to agreements
with their landlords.
“There will be others that haven’t. There will
be those that open up and landlords saying,
‘Well, you’re open now, I want all my rent.’
That is not realistic in some cases and there
will be a lot subject to negotiation.”
Indeed, the need for negotiation and
managed expectations – on the part of
both retailers and landlords – is critical
in the post-COVID period.
Bridging the gap
For retailers, the COVID-19 pandemic
dramatically rebalanced the value
equation with landlords, most notably
by the decrease in footfall, the increase
in e-commerce trading, and the rising
number of store vacancies.
“Since the early 2000s at least, supply has
always exceeded demand for shopping
centre space. As a result of COVID-19, with
the number of retailers that have gone out of
business, you are seeing a situation where
demand exceeds supply,” Fonteyn explains.
“Retailers can’t afford now to hold any
space that is not making money. Large
groups may have one or two stores that
they are prepared to take a loss on, but
the majority will have to be profitable
or breakeven. The pandemic has simply
created a seismic shift in supply and
demand – and hence, rent.”
Indeed, at the Australian Financial
Review’s Virtual Retail Summit, held on
25 June, Ian Bailey, managing director
Kmart Group, confirmed that 10–20 year
leases and yearly increasing rents would
no longer be acceptable to large anchor
retailers, which are still responsible for
driving a substantial portion of foot traffic
to shopping centres.
“None of us are going to be signing
anything like that in the future because
what this period of time has told us is
things can happen where sales decline
completely outside of the control of the
retailer – and rents do not,” he said.
Jane Cohen, a partner at KPMG Australia
and co-author of the white paper, observes
that consumer behaviour has been drastically
changed by the virus and those trends are
likely to continue, placing more pressure on
both landlords and retailers to create a more
sustainable framework.
“There will be [consumers] who
jump straight back to the way
they were, but even if just a
small percentage move [their
shopping patterns], it makes such
a difference on these fixed-cost
businesses – both the landlords
and the retailers.”
Jane Cohen, KPMG
“There will be people who jump straight back
to the way they were, but even if just a small
percentage move, it makes such a difference
on these fixed-cost businesses – both the
landlords and the retailers,” she says.
It’s a conclusion supported by Fonteyn,
who says, “Post-COVID, it’s a whole new
world. People are preferring to work
from home, at least part of the time,
because they don’t have to bother with the
commute and it’s convenient for them.
”That means the consumer behaviour will
change; they might shop more locally, so
there will be less demand in the CBD.”
Salera notes, “Landlord’s expectations
of achievable rent will need to change. In
the short run, the only way that landlords
will accept the possibility that they will
generate less rent from sites is when they
get an increased level of vacancy.
Higher
vacancy
rates means
there is less
competition
for retail
space, both in
centres and
precincts
Economic
uncertainty
creates a good
environment
for negotiating
a new, better
deal as
landlords look
for repeat
income
Large
shopping
centres
are still
beholden to
shareholders,
putting
upward
pressure
on rents
The consumer
shift to
‘village
shopping’
makes smaller
centres more
appealing for
retailers
As
e-commerce
grows,
shopping
centres must
adapt to offer
infrastructure
for omnichannel
retailing
“This may well escalate in the years
immediately after the end of the COVID
financial support as more businesses
are very likely to close their doors due to
unsustainable rent levels.”
Zahra adds, “If retailers fall over due to rental
costs, landlords may not be able to replace them
– it’s better to have a tenant with reduced rent
than an empty store. It would make more sense
to come to an arrangement that allows that
tenant to continue to trade profitably.”
For retailers, the balance of power has tipped
slightly in their favour. In addition to further
regulatory protections and free state-based
mediation services, the Australian Competition
and Consumer Commission (ACCC) recently
issued a draft determination granting new
collective bargaining powers to the ARA and its
members.
“The ACCC’s draft determination will help
our members exchange information and
collectively bargain with landlords to achieve
more productive outcomes during this
uncertain time,” Zahra says.
“I am sure the relationship will be
more amicable with more mutual
benefits, rather than it being a ‘my
way or highway’ approach.”
Balaji Sambasivam, The Jewellery Group
“The provision is time-bound, and is
scheduled to elapse on 1 September
2021, which will provide retailers with a
crucial opportunity to inform themselves
and understand what is going on in the
marketplace. This will help press the reset
button on future lease agreements.”
Meanwhile, Sambasivam predicts that “the
valuations and cost structure of operating the
stores will come to realistic levels, and landlords’
objective at this point in time is ensuring that
more stores are open for trading.”
38 | August 2020

Retail Rent Review | STRATEGY FEATURE
When it comes to the timing of a negotiation,
Fonteyn observes that landlords have been
“very accommodating” for his clients and
have presented the most favourable terms in
10 years.
“Landlords are desperate for certainty or
repeat income, so the next year or two is a
great time to negotiate if you are due for a
lease renewal,” he says, adding the caveat
that with so much uncertainty, particularly
the potential for further lockdowns and
closures, retailers may instead take a ‘waitand-see’
approach.
Indeed, he notes that many commercial tenants
are “on holdover” – paying rent month-bymonth:
“They are dealing with all the COVID-19
legislation and paperwork, so most are not
even thinking of renewals at the moment, they
are just getting through to September.”
In the long-term, Fonteyn predicts rents will
adjust in line with the retailer’s sales: “Retailers
can’t continue to run businesses that are not
profitable. It’s going to be much more about
what’s sustainable for that business – and if
the business is profitable, then the rent should
align more broadly with the average for that
sort of category,” he explains.
While jewellery stores have previously been
“in the crosshairs of shopping centres” to pay
a higher rate per square metre for premium
sites, Fonteyn advises that jewellers will be less
receptive, as the vulnerabilities of the category
have been laid bare.
“If retailers
fall over due
to rental costs,
landlords may
not be able to
replace them
– it’s better to
have a tenant
with reduced
rent than an
empty store.
It would make
more sense
to come to an
arrangement
that allows
that tenant
to continue
to trade
profitably.”
Paul Zahra,
Australian
Retailers
Association
Speaking at the Virtual Retail Summit,
Julia Forrest, a portfolio manager at
investment firm Pendal Group, said,
“We’re looking at it as an opportunity for
rents to be reset to sustainable levels
and once they’re at sustainable levels it
will give us the confidence to put a high
multiple on those earnings as retailers
and sales improve.” She rejected a Premier
Investments-style model as unacceptable
to shareholders.
Salera views the future of retailerlandlord
negotiations through a
pragmatic lens: “There are certain lease
parameters that landlords have considered
to be non-negotiable, and I doubt that we
will see a situation where small to medium
retailers will be able to vary these core
terms.
“However, I believe that landlords will
be inclined to be more lenient in areas
where they have greater latitude to
negotiate, rent being one such area.”
Those sentiments were echoed by
KPMG’s Cohen, who said: “I don’t
necessarily think retailers will be able to
get more out of the landlords, but both
will be able to create more value if they
shift to a more collaborative approach.”
Sambasivam reached a similar
conclusion, saying, “I am sure the
relationship will be more amicable with
more mutual benefits, rather than it
being a ‘my way or highway’ approach.”
Meanwhile, Ryan cautions retailers against
dismissing landlords’ requirements – yet
insists landlords must also manage their
obligations to tenants.
“The problem about renegotiating rent
is one of fairness to both parties.
“A landlord must get a return on
investment or the asset will become
starved of capital and operational
expenditure – and that includes
promotions which attract customers.
A retailer needs the lowest rent possible
to survive,” he explains.
“It is not landlords’ job to subsidise a retail
business, but lease costs should reflect
what is being delivered to the retailer. If it is
the wrong type of foot traffic or a low level
of foot traffic, then the onus falls to the
landlord to either improve the outcome or
reduce the rent.”
Ultimately, the onus is on both retailers and
landlords to negotiate leases that benefit
both parties. Without sustainable rents,
more retailers will fail – and landlords will
lose tenants and therefore income.
However, with realistic and flexible
terms in place, retailers can thrive in
the new trading environment while
landlords can expect stable profits that
perform over the long-term. The result
is mutually assured success, rather
than destruction.
USEFUL LINKS & RESOURCES
Victorian Small Business Commission
13 87 22
NSW Small Business Commissioner
South Australian Small Business
Commissioner
Small Business Development Corp. (WA)
13 31 40
Queensland Small Business
Commissioner
1300 312 344
Business Tasmania
1800 440 026
Tenancy Unit, Consumer Affairs (NT)
1800 019 319
ADDITIONAL RESOURCES
Australian Retailers Association (ARA)
1300 368 041
National Cabinet Mandatory Code of Conduct
Australian Treasury
KPMG Beyond COVID-19: The Shifting
Foundations in Retail Property
August 2020 | 39

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BEST OF BUSINESS
Feature
Navigate the future of customer relationships
by embracing technology
As online shopping increases, STEVEN VAN BELLEGHEM says that customer relationship remains an important
driver of loyalty – and retailers can boost it by understanding consumers’ digital expectations.
Customer relations are in transformation
and pre-sales, sales and after-sales
are changing at high speed. Companies
need to figure out the current customer
journey, the role of self-service, their
data strategy and much more.
A few years ago, this author conducted
a global study on the future of customer
relationships in collaboration with datacollection
company SSI and translation
agency No Problem!
The study investigated all aspects of a
modern customer relationship and the
highlights were as follows:
Adoption of new technologies
Rogers’ Adoption Curve is a concept by a
communications studies professor named
Everett Rogers that seeks to explain
how, why and at what rate new ideas and
technologies spread.
Rogers first published the concept in 1962
in his book The Diffusion of Innovations
and the curve is well-known – every
manager, marketer and entrepreneur
refers to this body of thought from time
to time. He divides adopters into five
categories: innovators, early adopters,
early majority, late majority and laggards.
People are more aware than ever before of
the newest products and models as soon
as they hit the market, and never has the
public been so awake to the possibilities
that are coming their way.
Furthermore, the intention to buy these
new products is high, a position that
sharply contrasts consumers’ approach to
new technology a few decades ago.
In studies from the early 1990s in which
respondents were asked about their
intention to buy a mobile phone someday,
the most popular answer was a firm ‘No!’
Some 25 years later, that sentiment has
changed completely.
This is how it usually went with new
concepts: the ‘average Joe’ or Rogers’
so-called ‘early majority’ failed to see the
point of most new technology.
Yet reactions today are very different.
For instance, 66 per cent of people say
they are interested in buying a smart TV
one day, one in two are actually looking
forward to the introduction of smart cars,
Never
underestimate
the impact of
real people.
Human contact
is crucial in
most customer
relationships,
even in the
digital world
smart shoes and refrigerators are slightly
lower down on the wish list but the idea of
a smart thermostat is very popular.
Today, a mobile phone has become just
another fast-moving consumer good
(FMCG) and the average consumer
replaces their smartphone every 18
months – one wouldn’t have to travel back
in time too far to find a generation who had
the same home phone for 18 years!
Things are moving quickly indeed. The
classic Rogers’ Adoption Curve probably
still exists, although its upward or
downward tilt is probably slightly more
pronounced than before.
Life is faster nowadays, not only in the
introduction of new technologies but the
obsolescence of outdated ones.
The rise of digital offline
Traditional retailers are afraid of
‘showroomers’, the shoppers who look
around their stores and ask staff for expert
advice only to go home and order the
product online.
This fear is justified: a study has shown
that 46 per cent of Americans have been
August 2020 | 41

Best of Business | NAVIGATE THE FUTURE OF CUSTOMER RELATIONSHIPS
known to ‘showroom’.
However, the same study also revealed
that ‘reverse showrooming’ is an even
bigger trend – 69 per cent of consumers
research products online and then visit an
offline store to order the product of their
choice.
In the SSI/No Problem! study mentioned
earlier, one of the aspects under
investigation was how consumer
expectations are changing with regard
to the offline (bricks-and-mortar) shopping
experience.
The results were clear: consumers
expected the online and offline worlds to
integrate in the near future. In many cases,
that’s exactly what is happening.
The study showed that consumers expect
an increasing level of interaction and
digitisation in the offline sales outlets.
For example, 63 per cent expected stores
to install interactive screens enabling
consumers to look up details on specific
products during their visit, and 64 per cent
wanted the option of ordering a product
online right away if it was not on stock.
The latter figure illustrates the evolution
of offline toward online and back again.
What’s more, 73 per cent of consumers
feel it’s a plus when an online store also
has an offline sales outlet.
Flexible pickup and delivery options will
also become an increasingly crucial part of
any retailer’s online strategy.
Know the customers
Consumers exhibit a growing aversion
to repeating themselves so the key issue
for consumers is to be recognised as a
customer across all channels.
Currently one in three people expect sales
personnel to know that they searched
online and browsed a product prior to their
visit; they want to hear the right answers
right away without having to tell the same
story over and over.
Strikingly enough, this phenomenon is
roughly the same across the world.
Data benefits all
A large portion of the public is still clueless
as to how companies can use their data.
The SSI/No Problem! report showed very
little opposition to the possible use of
consumer data for specific purposes but
only a limited number of consumers are in
favour of such practices – most consumers
are indifferent and have adopted a ‘wait
and see’ attitude.
If consumers had their way, retailers
would primarily use their data to send
them personalised information, something
that 46 per cent of respondents would
welcome.
It’s striking to note that the Dutch, who
are traditionally frontrunners in the field
of digitisation, are the most sceptical of
corporate use of personal data – just 30
per cent of Dutch consumers are okay with
companies using their data.
Countries such as Belgium, Spain, Italy
and also Singapore are much more open
to such strategies, and more than 50
per cent of consumers in those nations
expect better service through the use of
consumer data.
The personal digital world
Several years ago, Peter Hinssen wrote
The New Normal, where he argued that
businesses would need to address a
society without digital limits, where they
are increasingly faced with customers
and consumers who no longer tolerate
limitations in terms of pricing, timing,
patience, depth, privacy, convenience
and intelligence.
This is now a reality. Still, it would be
premature to write-off everything situated
in the human and offline realm just
because the digital society has become
the norm.
On the contrary, consumers all over the
world share the same basic concern for
wanting to build a digital relationship
without losing the interpersonal, human
contact of face-to-face relationships.
Only a handful of companies can do
without but, as always, there are
DIGITAL
CUSTOMER
SERVICE
Upgrade
technology
Consumers are
increasingly
oriented to
new channels
and products
– don’t get left
behind
Embrace the
showroomer
Integrate online
and offline
sales to take
advantage of
showrooming
and ‘reverse
showrooming’
Use data
wisely
Shopper
data can be
leveraged
responsibly
to improve
service and
increase
satisfaction
Retain the
human touch
Consumers
still prefer a
human option,
so be wary of
full automation
when it comes
to customer
service
exceptions to the rule – companies like
Amazon and Booking.com are hugely
successful despite minimal human
intervention.
Google is another case in point, but how
many companies can do what these
leading companies are doing?
The answer lies in their excellent track
record when it comes to customer
interaction. Consider these and it’s easy
to see why they are the exceptions.
In contrast, a company like Dutch
e-commerce business Coolblue has
made a conscious choice to cultivate
human contact.
When an online player opens offline
stores and records videos of employees
recommending their services, it is a wellconsidered
and very intelligent strategy.
Closing thoughts
Never underestimate the impact of real
people. Human contact is crucial in
most customer relationships, even in the
digital world.
Nearly three quarters of consumers like to
have the option of talking to a flesh-andblood
person, even when digital channels
are working perfectly.
The simple fact that this possibility exists
creates peace of mind that many people
still value.
The personal touch is in the little things
– one in two consumers like it when a
business addresses them by name, for
example. Retailers must get to know their
customers so they can personalise the
customer experience.
Of course, the great thing about all this is
that jewellery retailing is one business that
still thrives on human contact, excellent
advice and emotional purchasing.
STEVEN VAN BELLEGHEM is a keynote
speaker and author focusing on customer
relationships and marketing in a digital
world. Visit: stevenvanbelleghem.com
42 | August 2020

BEST OF BUSINESS
Selling
Shut up and listen to your customers
Listening is central to the selling process and is also at the core of good customer service practices.
RICHARD SHAPIRO explains the true meaning and benefits of this crucial sales tactic.
When staff listen patiently, it gives
customers a feeling of control.
Customers want to know they are
uniquely important and that their
specific needs are being addressed.
They don’t want to feel trapped because
you are trying to sell them something.
After all, selling is not about offering
customers a long list of items but
discovering what the customer wants and
matching a product to it.
What is the best way to achieve that
goal? By engaging the customer in a
meaningful and personal dialogue.
If staff spend their time listening, they
will give the customer that special feeling
of priority.
Listening pays big rewards
Joe Girard is the world record-holder
for selling cars. He began in 1963 at
a Chevrolet dealership in Detroit, US
and retired in 1977 with an average
sell-through rate of six automobiles (or
trucks) a day over the length of his career.
To put that in perspective, the average car
salesperson sells seven cars a month!
In fact, Girard exceeded his own lofty
expectations when he sold a whopping
18 cars in a single day!
Girard gave so much attention to each
customer that word spread and it wasn’t
long before there was a line outside his
office with people waiting to exclusively
see him.
He started making appointments to
ensure each customer would get his
undivided attention.
He also did this because he knew his
attention was worth the wait and he
advised others of this, saying, “People
may have had to wait for an appointment
but when I was with them, I was with
them body and soul.”
Listening to emails
Recently, one of my clients wanted to
know how their service and support for
email responses compared with those
of 20 other companies, each of whom
were customer service leaders in their
respective fields.
You never
know where a
conversation
may lead! Listen
with your
ears and your
heart before
responding.
Make the
customer feel
respected and
important
To achieve this, 10 different email
enquiries were developed to send to
target companies so we could measure
the speed and type of responses.
In one scenario, the test email began,
“I just had a baby and have a question
about your product.” Only one of the
companies acknowledged the news in its
response: “Congratulations on the birth
of your child.”
Obviously the other respondents ignored
the underlying emotion even though it is
easier to pay attention to an email than
to a conversation.
For example, you have an opportunity to
re-read the email, which is considerably
easier than asking a customer to repeat
what they have just said.
Another test email went like this:
“My dog accidentally chewed and
digested part of your packaging. Do
I need to worry?”
Several of the companies answered
almost instantly with the reply, “Please
take your dog to a veterinarian.”
44 | August 2020

EARS THE
THING
Give
your full
attention
Focus on your
customer and
engage with
their needs
Keep emails
personal and
relevant
Reply to queries
in a timely
manner and
address the
specifics of
each one
Start a
dialogue
Listen for
key phrases
and create a
conversation
Good reply. The only problem was that a couple
of the companies didn’t send that message
until two weeks later!
Listening is not just listening; it’s also acting
upon what you have heard. In this case, offering
such a slow response to a potential emergency
might actually communicate less care on
the company’s part than if there had been no
response at all.
Missing the signal
Do you remember the great comedian and
TV personality Groucho Marx? He had a show
called You Bet Your Life where any contestant
that mentioned the magic word of the day
would be rewarded with a prize, and a rubber
duck would fall from the ceiling to celebrate
the moment.
When I was doing research for my first book,
I would frequently make a statement, a ‘magic
phrase’ to determine if a sales associate was
a good listener. It’s intended as an opening to
engage the customer.
For example, I would start the conversation
by saying one of the following:
• This is my first time in your store;
• I just moved into the neighbourhood;
• My friend suggested I might like your
merchandise;
• I’ve never used your website before;
• This is the first time I have called your
contact centre;
• I have been buying this since I was
a teenager.
A representative who answers with just “Okay”,
“That’s nice” or says nothing at all has missed
a golden opportunity to start a dialogue critical
to securing repeat business. You never know
where a conversation may lead!
Listen with your ears and your heart before
responding. Make the customer feel respected
and important.
When you pay attention, you can hear the
underlying emotion and then establish a
human-to-human connection that has the
potential to last a long time.
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RICHARD SHAPIRO is founder of The
Center For Client Retention, offering
research, training and consulting services,
and author of The Endangered Customer:
Eight Steps to Guarantee Repeat Business.
Visit: tcfcr.com
Contact (02) 9417 0177
Contact (02) 9417 0177
Contact (02) 9417 0177
Contact (02) 9417 0177

BUSINESS
Management
“Jeff, you’re great with
customers but we can
tell that you’re not yet
confident in jewellery
knowledge. I think a few
days with Lisa at the
bench and sorting gems
with me might be helpful.
We’ve also noticed that
you like working with
pearls, so maybe we can
give you a pearl sales
quota this month. What
do you think?”
Top performance review tips for managers
Striking a balance between praise and constructive criticism can make performance reviews more productive
and satisfying for all parties. BARBARA CROWHURST outlines ways to get the most out of the process.
Performance reviews are a lot like
walking a tightrope: withholding
positive feedback can discourage and
demoralise employees, while failing
to discuss problem areas can mean
employees never improve.
Staff appraisals must be recurring
events. In addition to providing ongoing
feedback during the year, managers
also must let staff know what time of
year reviews take place.
To ensure reviews are useful, managers
should follow these tips.
Allow enough time to prepare
Performance reviews are only valuable
if managers and employees are given
the time and resources they need to
prepare for them.
Give staff the opportunity to identify
their achievements from the past
year and areas where they would like
to improve.
Keep files on employees
When hiring a new staff member, create
a file that contains performance review
notes. This serves to document the good
and bad aspects of that employee’s job
performance and work habits.
Use the file to catalogue their
accomplishments and also to track
performance-related issues such as
tardiness. The file will act as a record of
items to be discussed at the next review.
Solicit third-party feedback
Managers shouldn’t rely solely on
their own perceptions of an employee,
particularly if interactions with the
individual have been limited. Seek
feedback and comments from
colleagues and others who work closely
day-to-day with the employee.
Enquire about his or her strengths and
weaknesses, as well as areas that have
improved over time and special abilities.
Ask specific questions, such as how
does he or she handle challenges
and overcome obstacles and what
contributions have they made to
team-based projects?
Employees
may need time
to digest the
feedback from
a review so
encourage them
to come back
afterward if they
have questions
or concerns
Does the staff member seem
committed to continuing professional
education and skills development?
Compare the feedback.
Allow enough time for assessment
Don’t wait until the day before a review
to start tracking and critiquing a staff
member’s performance – this is unfair
to the individual and will not give an
accurate, comprehensive picture of his
or her abilities and achievements.
Instead, try to observe the employee
in a variety of situations over an
extended period. Assess how well he
or she manages both independent and
collaborative assignments.
Create a conducive setting
Choose a quiet, private place for
the review and schedule it at a time
when interruptions can be kept at
a minimum. When structuring the
session, incorporate time for a two-way
dialogue so that the employee can
respond to feedback and offer input of
his or her own.
46 | August 2020

Treat the
session as
a two-way
conversation
To prepare for the meeting, organise all
documentation – previous evaluations,
comments gleaned from colleagues and
other notes.
Give the employee sufficient notice to
prepare also.
Set the appropriate tone
The review should be handled in a
professional manner and treated as a
conversation, not a lecture.
Open the discussion by talking about
the employee’s accomplishments and
positive attributes. When it’s time to shift to
negative or problematic areas, focus not on
mistakes but on ways to improve.
Most employees will not be surprised
by anything they hear during a review;
however, if there’s a gap between an
employee’s perceived performance
versus actual performance, be sure to
explain the difference and suggest ways
performance goals might be met.
During the discussion, invite comments
on any observations. Talk about future
expectations and clarify job requirements
and responsibilities. Enquire about the
employee’s professional-development
goals and discuss how to work towards
meeting them.
Be courteous and tactful and focus on
behaviour rather than personality when
being critical.
Maintain an open door
Employees may need time to digest the
feedback from a review, so encourage
them to come back afterward if they have
questions or concerns.
If managers show that performance is
REVIEW
CHECKLIST
Give the
employee ample
notice and time
to prepare
Seek feedback
on performance
from others and
study previous
evaluations
Treat the session
as a two-way
conversation
Focus on
goals and
achievements as
well as areas for
improvement
not a once-a-year issue but a matter of
ongoing importance, staff will focus less
on the formal review itself and more on the
feedback and guidance they receive.
They’ll be motivated to see feedback as a
way to help them with their performance.
By preparing well in advance for
performance reviews and developing a
systematic, consistent appraisal process,
managers can turn what could be an
uncomfortable time into a chance to
chat with team members and set goals
for the future.
Who knows? Both parties may even start
to look forward to these feedback sessions
and the business will benefit as a result.
BARBARA CROWHURST is CEO
of Retail Makeover as well as an
internationally-recognised retail
consultant. Visit: retailmakeover.ca
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BEST OF BUSINESS
Marketing & PR
Grab your customers’ attention!
In an age of instant communication, impersonal communications fail to impress consumers – instead, business
owners must grab and hold shoppers’ attention, writes BARRY URQUHART.
It is so difficult to get a message
across nowadays. Nobody seems
to be listening, reading or valuing
relationships – consumers are failing
to recognise brands, exhibit loyalty
or refer services.
Everyone seems distracted and
uncommitted, more inclined to hit
delete than reply because it’s easier
to pretend that the communication
was never received.
The ubiquity of social and digital
media means messages are no
longer resonating with their intended
audiences.
A universal lowering of costs in digital
channels has been instrumental in
increasing the affordability and volume
of mass communications – but it’s all
for little to no avail.
Even personalised greetings are
marginally effective at best.
Doing so much, so often is becoming
a common practice that is only
contributing to the problem. Attention
has become a goal; however, it is
commonly out of reach for many.
Content is another tactic – yet, in
many instances, it is poorly structured
and delivered.
Marketing practitioners are
recalibrating the long-held maxim that
50 per cent of their advertising works
and 50 per cent doesn’t, they just don’t
know which 50 per cent works.
Today, there is an 85–90 per cent
rate of ineffective, non-responsive
advertising, marketing and promotion.
It is a daunting set of statistics and
implications.
Deliver the promise
Targeted consumers and existing
clients are increasingly informed,
discerning, price-sensitive and highly
expectant of both great quality and
value.
They seek out, utilise and regularly
return to sources which they find
credible, verifiable, transparent and,
above all, authentic.
High expectations are believed to
be the cause of considerable harm.
Webinars are trying to address them;
An interesting
allure is to
offer realtime
personal
responses. This
is something
that around
80 per cent
of business
clients and
64 per cent
of consumers
welcome
and value
however, the delivery skills of an
overwhelming majority of speakers are
poor – sometimes appalling – and this
reflects badly on companies and their
products.
Personal presentation skills are
only partial measures for increasing
relevance and impact. Sadly,
reincarnations of the late Steve
Jobs seem everywhere but lack his
immaculate delivery.
Conference stages are regularly
inhabited with storytellers dressed
in black roll-neck skivvies and black
trousers. Talk about commoditisation!
Step up, stand up
The filtering or blocking of much
communication is a consequence of
stereotypical perceptions and resultant
generalisations. Don’t take it personally.
In many instances, intended recipients
don’t filter or reject individual
communications.
Rather, they just apply a blanket cover
to every email, blog or text that comes
their way. It’s a coping mechanism
48 | August 2020

ATTENTION
RETENTION
Keep marketing
communication
targeted and
precise
Short, enticing
subject lines
and texts
appeal to busy
consumers
Ensure
long-form
communication
is authentic and
entertaining
Respond to
customers in
real time and
with sincerity
rather than discrimination, and it seems
necessary in a world swamped with advertising
messages.
To achieve human connection and elicit positive
engagement, more focus and effort is needed
on attracting attention.
Short attention spans dictate the need to
formulate and implement snappy headlines,
limited to concise, enticing and compelling
three-to-five-word phrases.
Overcoming filters
Consumer indifference pervades. Enthusing
and motivating unmotivated and disconnected
minds is a difficult challenge.
Endeavouring to change people may be futile.
In the words of Leo Tolstoy: “Everyone thinks
of changing the world but no-one thinks of
changing himself.”
An interesting allure is to offer real-time
personal responses. This is something that
around 80 per cent of business clients and 64
per cent of consumers welcome and value.
Increasingly, recipients of countless
communications recognise and are offended by
impersonal, mass-distributed missives. In this
form, personal salutations are conspicuous
and often deemed to be offensively insincere.
Accordingly, they do not counter those
widely-held negative generalisations about
promotional emails, blogs and texts.
Remember that the loss of a customer is
only one bad experience away. Many potential
relationships are never established because
the first exchange between business and
consumer is a communication that lacks the
vital ingredients to attract attention.
It is an art form
Disturbingly, many supposed digital and
online-marketing experts are deficient in their
ability to attract attention for clients; they are
good at registering with algorithms, which lack
dimensions of emotion.
By ensuring concise headlines, respecting the
power of brevity and providing credible and
authentic personal advantages, businesses
can reap benefits when targeting their
promotional messages.
BARRY URQUHART is managing
director of Marketing Focus. He has
been a consultant to the retail industry
around the world since 1980. Visit:
marketingfocus.net.au
Offer:
FREE SHIPPING
on orders over AUD$300 until 31 st July
As we continue to face uncertain times, we want to reach out
with wishes of love, hope and strength and remind you that Stow
Lockets remains committed to supporting our valued retailers.
Stow Lockets can be carefully stylised, creating a sentimental
heirloom jewellery piece for your customers.
One which will be cherished forever.
sales@stowlockets.co.nz | +64 7 281 1509
stowlockets | #preciousstories | stowlockets.com

BEST OF BUSINESS
Logged On
Find yourself: reviewing your online presence
There are multiple factors contributing to how customers see you in the digital realm – many of which you can
control. DAVID BROWN asks if it’s time to conduct an online audit of your website, listings and social media.
I was chatting with a friend recently
about the ‘good old days’, back before
the Internet was a part of our lives. We
didn’t have data in our pockets and if we
needed directions, we’d use a map.
Our spare time was spent reading or
watching television rather than looking at
videos or surfing through Facebook.
Words like Google didn’t exist in our
vocabulary and swiping was something
you reserved for flies and insects that
bothered you!
Now the Internet is a part of our lives,
yet some of us are still of a generation
where we occasionally forget it is
there and the impact it carries as our
ambassador to others.
For many customers, the first experience
they have of your business is online,
often when searching for you in Google
or Facebook.
So, how does your profile stack up?
The online audit
A quick online search for your company
should show your business appearing on
various platforms – some of which you can
control, such as your website, and some of
which you can influence, like social media.
There could be several other platforms
you may not even be aware of, such as
review sites or blogs.
This is your online profile and it’s
important you are aware of it and manage
its impact, as it can be just as important to
your business and its brand image as your
store windows.
Fix your digital presence
Here are the elements you need to review
to get your online profile in great shape:
Your website – How close to the top does
your website appear in Google’s search
results? If customers have to go to page
two of Google to find it, or even further,
then that’s an issue.
This should be your main online presence
and customers can’t find you if you are
buried at the bottom of the list.
Business social media – The key socialmedia
apps are Facebook, Instagram and
Twitter. If you post images to Pinterest
Positive
coverage is great
but if there are
unfavourable
reviews or
articles, you
should take
action to deal
with them –
show that you
are listening
and that you are
ready to fix the
issue
or your customers have shared images
of your products there, you can add it to
the list too.
You may also publish videos for your
business on YouTube or Vimeo.
The good news is you can influence how
you appear in any of these areas of the
Internet. Are you managing your socialmedia
pages? If so, when did you last post
any updates?
Are you interacting with followers,
including responding to questions or
complaints in a timely manner?
If your social-media accounts have turned
into ghost towns then it doesn’t reflect well
on your business. Customers might even
think you’re no longer trading!
Update your pages regularly with engaging
and informative content about your
products and services including updating
your opening hours.
Be creative but remember to comply with
the terms of use. Big companies control
the space – Facebook owns Instagram and
Google owns YouTube – and they can shut
down profiles that don’t play by their rules.
50 50 | | August August 2020 2020

ONLINE
EVALUATION
1. Check your SEO
to ensure potential
customers can
find you when
they search on
Google
2. Make sure
your social
media channels
– Facebook,
Instagram, Twitter,
and Pinterest
– are regularly
updated and
engaging
3. Manage
online reviews
and ensure any
questions or
complaints are
swiftly addressed
4. Keep tabs on
external coverage
such as press
articles and blog
posts – re-share
the positive
and address the
negative in a
constructive way
5. Don’t neglect
your personal
accounts, such
as LinkedIn,
which can be
helpful in hiring
employees as well
as promoting your
business
Private social media – As a business
owner, you may be well-known to people
in your area and some of your customers
may even be friends with you on socialmedia.
Remember that your online actions
can always be seen by others.
This means last Friday’s drunken photos
may be seen by your customers as well as
your friends!
Your LinkedIn profile is another important
personal profile that can have a positive
impact on your business.
Make sure you have a good-quality
professional picture, an up-to-date profile
and a description of yourself.
Build a wide network of contacts too, as
this could make life easier when it comes
time to hire new employees.
Other sites – Where else do you appear
online? You might be in a local directory
listing like TrueLocal or you might appear
on review sites such as Review.com.au.
Perhaps an article has been written about
you or your business is mentioned in an
influencer’s blog post.
Think about how you appear on these
pages and the impression potential
customers might get of your business if
they were browsing these sites.
Positive coverage is great but if there
are unfavourable reviews or articles, you
should take action to deal with them. If
there is a customer complaint, give that
customer the courtesy of a reply. Show that
you are listening and that you are ready to
fix the issue.
Customers know there will sometimes be
problems and misunderstandings; it’s how
you deal with it that defines your business.
Reviewing your online presence is a task
you should complete regularly and it pays
to keep a constant eye on your social
media platforms at all times.
Many of your new customers will discover
you via these mediums, so be aware of
what they see and the impact it can have
on your business.
We Are
Your Workshop
Your local service for all of your
manufacturing needs
FREE RHODIUM PLATING ON ALL
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DAVID BROWN is co-founder
and business mentor with Retail
Edge Consultants. Learn more:
retailedgeconsultants.com.au

My Bench
Laurie Moffatt
Laurence Moffatt Manufacturing Jewellers, Sydney NSW
Age 64 • Years in Trade 47 • Training 4-year apprenticeship • First job Bernard Lowry Jewellers, 1973 Other Qualifications Diploma in Gemmology
SIGNATURE PIECE
GOLD HOLLOW BANGLE
PRIVATE COMMISSION
This 18-carat gold bangle was commissioned by a client to
celebrate her 30th wedding anniversary. The design was
based on a costume jewellery bangle she owned. I love outof-the-box
commissions and also restoring Australian antique
pieces. These have included gold brooches presented to the
famous Spanish dancer Lola Montes, to silver emu-topped claret
jugs, emu eggs and centrepieces made by notable Australian
silversmiths of the 19th Century.
4FAVOURITE GEMSTONE Sapphire because of
the variety of colour, durability, and that Australia
is a great natural source of it.
4FAVOURITE METAL 18-carat yellow gold
because of its malleability, depth of colour and
hue, and it is a pleasure to deal with!
4FAVOURITE TOOL An Italian saw bought at the
start of my apprenticeship, which allows you to cut
out a baguette setting or more intricate designs.
4BEST NEW TOOL DISCOVERY My coffee
machine! Otherwise, it would be the best linear
engine turning lathe.
It was manufactured by George Plant & Son in
England and has been unsurpassed for hundreds
of years.
4BEST PART OF THE JOB Simply sitting
and creating.
4WORST PART OF THE JOB Polishing!
4BEST TIP FROM A JEWELLER Simplistic designs
often work out the best.
4BEST TIP TO A JEWELLER One of the most
important elements of the job is communication
and understanding between you and your clients.
4BIGGEST HEALTH CONCERN ON THE BENCH
The back – definitely the back!
4LOVE JEWELLERY BECAUSE Of its challenges
and the way it helps you to discover your abilities.
52 | August 2020

OPINION
Soapbox
Learning from the past,
looking to the future
It is all too easy to fall into despair during tough times, but jewellery retailers and suppliers alike
shouldn’t lose sight of opportunities or be afraid to adapt, writes DARREN ROBERTS.
When Neil McCammon and I acquired
Cudworth Enterprises almost exactly 18
years ago, we had the goal to become the
market leader for men’s fashion jewellery
in Australia. It was a huge undertaking to
grow the Cudworth brand both here and
then later, internationally.
We were taking over a business that had
been established in 1921 – just three
years after the end of World War I.
At that point it was known by the company
name Norman P Joseph, and it had gone
through several other changes of name,
and management, in that time.
The name Cudworth Enterprises was
adopted in 1979, when Dennis and Leslie
Cudworth took over.
To put that into perspective, our business
had been through the Great Depression,
World War II, and various other recessions
and downturns all before it fell into
our hands.
However, standing the test of time doesn’t
mean standing still.
It is about agility, the ability to move with
the times while still maintaining the
qualities that makes your business and
your product special.
It is about never being complacent and
remaining positive and hopeful during the
down times.
We were the first company to introduce
stainless steel jewellery into Australia,
and three years after we bought the
business, we expanded into our first
international market: New Zealand.
expanded internationally again – this
time into the UK and Europe. Shortly
afterwards, in 2013, there was another
downturn and this time our business did
feel the effects.
However, again we pushed through, and
began 2020 having achieved our goal to be
the market leader in Australia for men’s
cufflinks, jewellery and accessories.
In addition, we also formed another
division of Cudworth for the distribution
of luxury European brands such as Hugo
Boss writing instruments, Tateossian,
Hoxton and Lanvin.
Then came the biggest challenge any of
us have faced: COVID-19.
Those previous setbacks – which many
other businesses in the jewellery industry,
and beyond, have experienced alongside
us – simply pale in comparison.
Yet we have found that the lessons we
learnt from the past still apply.
With a proactive mindset, we have used
this time to communicate with retailers to
build an even closer working relationship,
as well as speaking to other suppliers.
We have maintained our high level of
service by taking a look at our best-selling
lines and ensuring they are
always in stock.
We have improved our website and
even assisted retailers with theirs, and
have worked with buying groups on
Father’s Day and Christmas catalogues
to ensure our products are properly
promoted to retailers.
Our business
had been
through
the Great
Depression,
World War II,
and various
other recessions
and downturns
all before it
fell into our
hands. However,
standing the
test of time
doesn’t mean
standing still
resilience throughout 2020. Overall, I
have observed strength and positivity
from most retailers I have encountered
during the pandemic – and even seen new
blood coming into the industry, which is
refreshing.
One example was a young retailer in a
northwest suburb of Sydney who had
taken over the family jewellery business.
He moved the store to a new location
and began trading in April! It was a risky
decision, of course, but the store is
doing well.
The reason for that is because the
retailer could call upon the experience
of the past and the established strengths
of the business, while combining it
with an ambitious, adaptable, and
optimistic vision.
It is a neat metaphor for the approach
that’s needed in business – not just during
crisis periods, but at all times.
In this most difficult of years, we have
called upon Cudworth’s nearly a century
of heritage to guide us: we are sticking
to what we know best – men’s jewellery
and accessories – and we aren’t trying
to develop products that don’t fit under
our umbrella.
At the same time, we are proactively
developing our distribution side for the
luxury European brands.
And finally, we are remaining positive,
remembering that our business has
survived for 99 years. The future will
be new and different, and it’s time to
embrace it.
However, a few short years after that
– when we were on the road to achieving
our ambitious goal – the Global Financial
Crisis hit.
Fortunately, we were able to withstand its
impacts for a time, and in 2011 Cudworth
These steps have served us well in what
has been an incredibly difficult year –
and they are all steps that retailers can
take too.
When it comes to maintaining a hopeful
attitude, retailers have shown their
Name: Darren Roberts
Company: Cudworth Enterprises
Position: CEO
Location: Sydney, NSW
Years in Industry: 18
54 | August 2020

Love isn’t cancelled,
it’s stronger than ever.
Our new ‘Momentum’ partnership provides
the necessary tools to help steer our jewellers
through this crisis with grace and gusto.
We stand together, and hold our community
close to our hearts.
The time is now… we choose love!
Discover the difference today.
Sound like we are made for you?
That’s because we are…
Josh Zarb - CEO
0448 416 070
josh@jewellerscollective.com
jewellerscollective.com
#independentjewellerscollective

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