strikes - Savor Silver

S I LV E R J E W E L L E R Y
Silver
STONES & SILVER
GOLD
strikes
SILVER JEWELLERY HAS A FIRM FOOTING IN THE MARKETPLACE BUT
COULD REDUCED MARGINS, INCREASING AMOUNTS OF AGED-STOCK
AND A STABILISATION IN GOLD PRICE HAVE ANY IMPACT ON THE
METAL’S FUTURE SUCCESS? EMILY MOBBS INVESTIGATES.
ccording to the most-recently-published World Silver Survey, physical
silver demand has reached an all-time high. The report, conducted
in 2014 by Thomson Reuters on behalf of The Silver Institute, found
that total global demand for the metal had increased 13 per cent
to 1.08 billion ounces and that a “sturdy recovery” in silver jewellery
and silverware fabrication were key contributing factors.
The 2015 edition of the annual report had not been released at the time of
publication; however, Michael Barlerin, director of The Silver Institute’s Silver
Promotion Service, cites a 4.4 per cent decline in jewellery demand in the
Interim Silver Market Report released by Thomson Reuters in November 2014.
Barlerin is not discouraged and says the result is a reflection of the previous
record-breaking year as opposed to any indication that consumers are moving
away from silver jewellery purchases.
It’s certainly a sentiment that rings true for the local market as the silver
category maintains its importance in stores across Australia and New Zealand.
May 2015 Jeweller 17
JULIE SANDLAU
BUTTERFLY SILVER
Showcase Jewellers general manager
Carson Webb says there’s no doubt sales in
silver have increased for the buying group’s
approximately 270 member stores.
to purchase silver. “When we first started in
2002, there were two very distinct consumer
groups: it was either ‘I wear gold’ or ‘I wear
silver’. That idea has definitely morphed over
the last 10 years with people choosing to
now wear both,” he says, adding, “I don’t think
falling gold prices are going to impact on us
at all.”
Webb notes that silver product excluding
Pandora makes up for 16 per cent of the
group’s overall sales while gold sales have
dropped consistently over the last five years
to around 9 per cent. Webb adds that the
decrease in gold does seem to have settled.
Nationwide Jewellers managing director
Colin Pocklington also confirms that silver
is a “very strong” category for Nationwide’s
500 member stores across Australia and
New Zealand.
“The question is at what point will gold make
a resurgence,” he says, predicting, “With the
lower gold price, this cannot be too far away.”
Pocklington isn’t necessarily stating that
the cost of gold has a direct impact on the
popularity of silver jewellery but one has to
wonder whether any effect will be felt as
prices for gold remain well below the peak
prices the metal experienced following the
global financial crisis.
Barlerin believes the relationship between
the gold price and demand for silver
jewellery is complex. “My top-line opinion is,
at least in the developed world’s adornment
markets, that it would take a dramatic
decline in the gold price – 20–30 per cent
– to reduce consumer purchases of silver,”
he explains. “Fabrication ‘demand’ of gold
jewellery could grow based on a more
modest decline but consumer demand
for silver jewellery is driven by many more
variables than the price of gold.”
Michael Granshaw is the director of Butterfly
Silver, a 23-store retail business specialising
in silver jewellery. He says, in his experience,
price-point no longer plays such an
important role in a consumer’s motivation
Uberkate founder Kate Sutton offers a similar
sentiment: “I don’t believe the change in
gold prices will see customers switch from
silver to gold, I believe that customers will
still buy both.”
Sutton says the “old rule” of someone opting
to wear silver or gold jewellery but never
both together is long gone.
“Mixing the metals is very on-trend,” she adds,
“and we are seeing more and more of our
customers loving the creativity of being able
to wear a combination of silver, yellow gold
and rose gold.
“There is always going to be a very special
place for a gold purchase but I believe
fashion and trends and what we as designers
are providing the marketplace will direct a
customer’s decision-making more so than
comparing the price between silver
and gold.”
Andrew Cochineas is managing director of
Pallion, the parent company for a number of
precious metal businesses, including Palloys,
AGS/PJW and ABC Bullion. He offers a slightly
different view.
“We believe that the gold and silver jewellery
markets are very different. People who are
looking for gold jewellery are generally not
the same people who are looking for silver
jewellery,” Cochineas explains. “We feel that
the rise in silver jewellery sales over the last
few years is more closely correlated to the
rise in the power of fast-fashion. Traditionally
fashion jewellery was made out of base metal
PALLION
DANIEL BENTLEY
but, as part of a general worldwide trend to ‘masstige’, we have witnessed
that fashion labels are moving that production to sterling silver.”
Masstige, a portmanteau of the words ‘mass’ and ‘prestige’, was coined in the
early 2000s to describe prestige for the masses and Cochineas says, “We don’t
expect that trend to stop. If anything, we are witnessing a further masstige
movement to quality as evidenced by the rise in Argentium silver sales.”
Argentium, which was introduced to the local market in mid-2014, has a
minimum silver content of 93.5 per cent compared to the 92.5 per cent
found in sterling silver.
STYLE FILE
Local suppliers specialising in the fair-coloured metal are unanimous in
the idea that the consumer group favouring silver jewellery are a fashionconscious breed, increasingly drawn to branded product.
With that in mind, it’s worth taking note of some of the trends and styles
set to take centre-stage this year.
According to Daniel Bentley, co-founder and designer of his namesake
business, pieces in the 2015 ranges will maintain the brand’s signature clean
lines and sculptural forms but also incorporate a newfound pop of colour.
“Geometric shapes and forms of the metal will feature strongest with
coloured gemstones adding a bright focus point,” he explains, adding that
silver is a “wonderful metal to form and has an amazing natural warmth to it”.
Najo managing director Jo Tory, who has been working with silver jewellery
for more than 25 years, says the current focus for her is on creating “classic,
high-polished designs that are both sophisticated and fashionable”.
Although yellow and rose goldplated silver jewellery
has been making
headlines both
internationally
and locally for
a while, is it a
trend that is
translating into
sales?
HOMAGE
PERSONALISED
JEWELLERY
UBERKATE
“Rose gold-plated silver jewellery has grown
in popularity but it is still only a very small
proportion of our sales and of our seasonal
collections,” Tory explains.
“High-polished silver, oxidised silver and twotone – that is, silver with elements of gold –
are still by far the most popular.”
Meanwhile, Cheryl Roberts of Stones & Silver
states the trend is definitely something that
the supplier is planning to capitalise on.
“We are continuing to introduce a touch of
gold into many of our Stones & Silver designs,
which is proving to be very popular, in
particular the rose gold,” she says.
Rather than ‘following’ the plating trend, Julie
Sandlau Australia brand and sales manager
Helen Hagerty explains that the brand has
“always been about” this type of finish.
“In contrast to most other brands, the
majority of the Julie Sandlau collection is
‘satin finished’ 22-carat gold-plated sterling
silver,” she explains, adding, “Sterling silver and
gold-plated designs are now of a quality that
has allowed a new and respected segment
of jewellery to be well and truly established
in its own right. Customers now know they
are not having to compromise on quality and
design when looking for fashion-forward
styles at affordable prices.”
NAJO
Be that as it may, Webb has a word of caution
for retailers considering their silver jewellery
strategy. He says that while silver continues
to perform well, other elements need to be
considered such as “the time and number of
staff required to make enough sales in order
to pay bills”.
What’s more, Webb states that the margin
on silver has continued to drop over the
last four years according to figures for
Showcase members and that aged-stock
in silver has increased to more than double
the percentage of aged-stock holding from
four years ago.
To control these issues, Webb highlights the
importance of managing fast-selling stock
and also for jewellers to not only choose a
well-fitting brand but to “do it” well.
“Own it and be great with it,” he urges. “Do
not just throw it in the store to stop another
jeweller getting the brand. That strategy
doesn’t work for anyone, including suppliers.
“Also be mindful that what’s hot today in
fashion isn’t necessarily going to be hot
tomorrow. Fashion stores have very different
KPI metrics to jewellery stores so this needs
to be carefully managed within the jeweller’s
own store.”
Jewellers should also bear in mind this
difference when developing merchandising
displays. There’s undoubtedly a
delicate balance to be found when
marketing silver jewellery as both a
fashion-focused product as well as
one that deserves pride of place –
and a price tag to match – in a
jewellery store.
Bentley says one mustn’t forget
to place a few stunning pieces
HOMAGE PERSONALISED JEWELLERY
S I LV E R J E W E L L E R Y
NAJO
“IT WOULD TAKE A DRAMATIC
DECLINE IN THE GOLD PRICE
TO REDUCE CONSUMER
PURCHASES OF SILVER.”
MICHAEL BARLERIN
in a window display: “You may not sell them every day but never
underestimate their pulling power and their ability to sell the
supporting pieces around them.”
Hagerty also points to window displays as being a powerful tool for
increasing sales and promoting silver as a high-end product.
“A beautiful, clean and uncluttered window display will always be the
strongest tool to convey luxury and quality to a potential customer,”
she explains.
Tory’s top piece of advice is to include higher-priced items in displays,
followed by ensuring that jewellery is always clean and polished.
Roberts on the other hand believes that increasing sales comes
down to ensuring the right information is conveyed to consumers
via point-of-sale material and staff product knowledge: “It needs to
be highlighted that it is 925 sterling silver, so as not to confuse it with
much cheaper costume jewellery.”
Homage Personalised Jewellery director Adam Young believes
jewellers can make a difference with photography and presentation.
“Highly polished pieces of silver are notoriously difficult to
photograph and pictures often need a lot of touch-up work to make
them look appealing,” he says. “Manufacturers and jewellers need to
spend the time and money to get the presentation right.”
Looking ahead, Sutton has high hopes for the metal’s future: “Silver
will always be a popular choice. As long as designers are providing
quality, originality and not just same, same pieces then the consumers
will hold it in the regard that it deserves.”
By all accounts, it seems the silver jewellery sector will continue to
surge without even really batting an eyelid at its gold counterpart. i