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Is Fine Jewellery Set for a Branding Revolution?

The market for fine jewellery, worth $263 billion last year, remains largely unbranded. But the branding revolution that transformed fashion may soon be coming to fine jewellery.
Delfina Delettrez 'Gold Vein' A/W 2014 collection film | Source: Delfina Delettrez
By
  • Lauren Sherman

NEW YORK, United States — Just imagine if the vast majority of fashion were unbranded, sold by generic retailers and small-time traders instead of globally recognised giants. In the market for fine jewellery — which includes anything made from precious metals and gemstones — this is the norm. According to a February 2014 report released by McKinsey & Company, 80 percent of the $263 billion worth of fine jewellery sold annually remains unbranded, bought at a range of national retailers, mid-sized single-branch enterprises and small mom-and-pop stores. "The 10 biggest jewellery groups capture a mere 12 percent of the worldwide market and only two — Cartier and Tiffany & Co — are in Interbrand's ranking of the top 100 global brands," noted the report.

But while, today, branded jewellery accounts for a mere 20 percent of the overall fine jewellery market, the segment has doubled since 2003 and is expected to comprise 30 to 40 percent of the fine jewellery market by 2020, according to McKinsey. “Some industry observers project that the ten largest houses will double their market share by 2020, primarily by acquiring local players,” continued the report. “And if the apparel industry does indeed hold any lessons for the jewellery industry, incumbent jewellery houses will soon be fighting bidding wars against private equity players with deep pockets.”

Momentum has been building for several years. In the 1980s, David Yurman and Pandora joined international jewellery stalwarts like Cartier and Tiffany. Then, in the 1990s and early 2000s, traditional luxury fashion houses including Chanel, Louis Vuitton and Dior launched — or revived — their own fine jewellery ranges. After launching its first high-jewellery collection in 2010, Hermès opened its first stand-alone store dedicated to fine jewellery and watches in 2013.

This summer, Maison Martin Margiela, owned by Renzo Rosso's Only The Brave (OTB) group, launched its first-ever fine jewellery collection. "Future growth in branded jewellery is likely to come from non-jewellery players in adjacent categories such as high-end apparel or leather goods," notes McKinsey, though fashionable fine jeweller brands like 89-year-old Repossi, led by artistic director Gaia Repossi, are also tapping the growth of the fine jewellery market. (In January 2014, Repossi told BoF that year-over-year sales were up 27 percent, while points of sale had almost tripped from 31 to 85 over a two year period.)

Delfina Delettrez, the Fendi heir known for her surrealist pieces, and Bibi van der Velden, currently making waves for her sculptural pieces made out of ancient wooly mammoth tusks, have also made strides. Others cropping up include Alison Lou and Monique Péan, as well as Fernando Jorge and Sabine G. "It's really lovely to be able to showcase small designers that would otherwise not have a platform into the world," said Net-a-Porter's buying manager Sasha Sarokin, who picked up Bibi van der Velden this season.

In the past three years, the world's largest luxury conglomerates have also invested heavily in fine jewellery makers. Back in 2011, LVMH bought Bulgari for $5.2 billion in an all-share deal that was said to be the highest amount the group had paid for any company. In 2013, Kering acquired a majority stake in Italian jeweller Pomellato. Meanwhile Richemont — which already owned Van Cleef & Arpels and Cartier — launched a new fine jewellery brand Giampiero Bodino.

Costume jewellery designers — many of which emerged during the recession as a fashion-forward, price-conscious alternative — are also betting on the growth of fine jewellery. In 2013, Alexis Bittar introduced a full range of fine jewellery, while Eddie Borgo designed a pair of 18-carat gold cuffs that retailed at Neiman Marcus for $65,000. “I want to address the collector who is seeking highly specialised, one-of-a-kind pieces,” said Borgo. “High jewellery is a logical next step for us. We have customers who love our work but prefer their pieces in fine. I always make it a point to listen to our collectors.”

Bittar shared a similar story. “A wide and varied base of customers — from consumers to retail partners — were asking for me to design fine jewellery. Of course, it’s been a learning curve, because it is a different industry than the fashion jewellery business.” While he declined to reveal figures, Bittar, who was recently nominated for a 2015 Gem Award, said his customers were “thrilled.”

“In our first year, our fine jewellery sell-through was so strong that it raised our average single ticket purchase price three-fold in the period between Thanksgiving and New Years,” revealed Kate Davidson Hudson, a former editor at Elle (US) who, along with Stefania Allen, founded Editorialist, a luxury accessories e-tailer, in 2013. Fine jewellery now makes up half of the site’s sales.

The growth of the fine jewellery market is rooted, in large part, in evolving consumer behaviour. No longer are fine jewels reserved for special occiasons and typically gifted from men to women. “I first noticed it around 2009 or 2010,” said fine jewellery designer Anita Ko. “Women were buying more jewellery on their own and not waiting for the occasion. The retailers I was working with — Net-a-Porter, Neiman Marcus, Jeffrey, Maxfield — started to really pay attention, giving fine jewellery designers top placement in their stores.” In fact, Ko was the first fine jewellery designer ever featured on Net-a-Porter. “Our customers were so overwhelmingly enthusiastic about it, it grew naturally from there,” said Sarokin. From 2008 to present, the number of fine jewellery brands carried by Net-a-Porter jumped from one to 40. In 2013, the e-tailer’s fine jewellery sales more than doubled from the previous year.

“Designers are starting to see the importance of branding and being associated with the best of the best,” said Gannon Brousseau, director of the Couture Show, a trade show for the fine jewellery industry held annually in Las Vegas. “We’re actively seeking a different buyer, such as those from Moda Operandi, Net-a-Porter or specialty stores where the vast majority of their sales are done in a dressing room,” he added, referring to fashion and apparel. “Our goal is to reach out to the fashion store that’s dipping into jewellery.”

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