Fashion Jewellery

Written May 2009 for a jewellery trade publication

They’ve been heralded as original, cool must-haves. Young and fashion-savvy customers can’t get enough of them. Its fans include trend-setting American celebrity Paris Hilton and Chelsea WAG Cheryl Cole. Yet despite the costume jewellers’ luxury clients, her price tags are anything but exclusive to the rich and famous.

Punky Allsorts’ designs do not feature diamonds or any precious metals. Instead, the company draws on the popularity of another girls’ best friend- sweets.

Modern in its creativity but retro in its inspiration, the company’s creations started life on the wrists and neck of singer-songwriter Alayna Salter. Her liquorice and dolly mixture-themed pieces became an instant hit with fans. Many enquired where the one-off collections could be purchased. Sensing a great opportunity, she established Punky Allsorts in January 2008.

Whilst keeping costs to a minimum, the finished articles do not compromise originality and beauty. Each of her necklaces, earrings and bracelets is made from clay beads. These are baked, formed and later coloured. They are later strung by hand with elastic thread. The results are colourful, eye-catching and unique jewellery.

Wholesalers are buying the pieces as quickly as they leave the kitchen. Adored by Los Angeles’ A-listers, upmarket boutique Kitson regularly snaps up the latest selections. In turn, Punky Jewellery has become a worldwide success story.

The latest addition is Seven Cities. Each design represents a popular destination such as London or Paris. With retail prices of £12.50 for bracelets to £50 for a necklace, these are eye-catching creations that are inexpensive.

In the current economic climate, it’s this value for money customers seek. Lower disposable incomes mean that the jewellery industry must explore new opportunities. As some purchasers explore alternatives to gold, fashion jewellery is leading the way.

You don’t have to be a music artist with craze-spotting fans to be profitable. Explore any department store and you’ll find an array of glass, wooden and acrylic jewellery at pocket money prices. These aren’t once in a lifetime purchases. Regulars won’t buy one pair of ear-rings. They’ll buy ear-rings and a bracelet. While they’re at it, they’ll probably buy that necklace they have their eye on.

Why? Costume jewellery is adaptable. It’s designed to be worn with a number of clothes and for everyday occasions. Think about it: we wear a wedding ring for life. We wear our watches for years. When it comes to fashion jewellery, the wearer takes their pick from their personal collection to suit the mood and occasion.

Juli Miller of Jules Jules explains. “Costume jewellery suits today’s market for change” We change our wardrobe frequently and like to do the same with our jewellery”. She adds that purchasers “can be up to date” without having to look to more luxury pieces in a recession. “Big statement pieces that are currently popular can be found equally in costume jewellery”, she says.

Juli began designing her contemporary fused glass jewellery in 2005. Her pendants, cufflinks and ear rings are individually hand-cut from layers of art glass. These layers are layered and then fused together to create a truly one-off piece. Highly wearable, Juli’s work appeals to a wide range of customers. Her best-selling gorgeous glass pendants retail at around £25.

Equally desirable examples stem from the highly-popular children’s costume jewellery sector. Launched in 2006, Molly Brown London’s collections retail in major department stores including Harrods, Selfridges and Fortnum and Masons. Furthermore, the brand is stocked in more than 50 other outlets. These include seven Premier Fraser Hart stores.

Molly Brown London’s best-selling product, the Jelly Bean collection, has become something of a cult. Beautifully finished in solid silver dipped in enamel, International Jewellery London 2007 awarded the range ‘new product of the year’.

Eleven ‘flavours’ are available. Admirers of these well-loved classics whose sweet-tooth is on strike can indulge in colours including strawberry and grape. Also available are silver ‘signature’ jelly beans. Single jelly beans start at a trade price of £14.60.

Founder Erica Illingworth pulls no punches as to its success. “Within two weeks of the jelly beans being introduced at Harrods, we became the best-selling children’s jewellery in the store within two weeks”, she proudly says. Three years later and there is no sign of a lack of demand. “Even in the recession”, Erica reflects, “the products remain the best selling children’s accessory constantly”.

Another ideal complement to your range of beads or children’s jewellery is S.R. Kidz by SilverRado. A sterling silver bead collection for children from five to thirteen years, they feature bright colours and appealing designs.

Vivid and intense designs are not only noticeable, Erica Illingworth says, but hugely popular. “You have to offer something special. Our products are colourful and above all, fun”.

At the same time, purchases can be highly personal. “Our jelly Bean signature range is often purchased as a sentimental keepsake”, Erica says. “I had one customer who bought a signature bean for his wife, who had just lost a baby. They used to call the baby ‘bean’ due to its shape. For the couple, this was a special way to remember their child”.

Fat Lip’s Sarah Watmore agrees. After leaving her job in PR and marketing, she travelled extensively with her husband sourcing new ideas for designs. In 2004, Fat Lip was born. This was “at a time when fashion jewellery really took off”, Sarah adds.

Featuring spectacular contemporary jewellery in a range of colours, Fat Lip is continuing to experience strong growth. “Our sales for this year over the last three months are up around twelve per cent from 2008”, Sarah says.

She continues: “We have customers in the twenties to fifties age range, but also some who are in their sixties and seventies”. The reason, she adds, is simple. “Our products have a wide appeal due to our array of styles”.
Those not purchasing in-store can purchase “at any time of the day or night” through Fat Lip’s easy to use transactional website. “A website is essential”, Sarah says. “A large number of firms we see at trade fairs do not have a website. This can really hold you back”, she warns.

Sarah says the benefits of investing in promoting fashion jewellery now can be highly worthwhile. “We take that extra step to help our retail customers”, she says. For example, a comprehensive range of jewellery display stands is available.

Their dedication and service has certainly paid off. Across four trade shows this spring, the company successfully launched around twenty five new products. Far from cutting back on their products, it was their biggest ever launch.

With next day working delivery, low minimum order and excellent customer service, Fat Lip’s ranges are both classic and enduring. Those looking for something more modern are not disappointed, either. Vibrant new styles made with a colourful selection of unusual acrylic beads will be launched this month. And that’s not all . “At the Autumn Fair we’ll be launching a new beaten and coloured aluminium jewellery range called ‘Amarella’”, Sarah says.

As the warmer months approach, Sarah anticipates multicoloured, bold and dynamic jewellery to sell well. “They go with anything and we find these sell all year round”, she says.

Want to pick and choose your own design? Charlotte Borgen Design is one such company that have embraced such an idea. Its concept is simple. Using your favourite charms, you can create your own personal jewellery.

There are more than 1,000 different colours, patterns and designs in glass, enamel, silver and a dazzling array of CZ beads in numerous colours. Designing your own bracelet or necklace will carry you to the limits of your imagination.

Similarly, Talbot’s wide selection of ranges makes it one of the country’s largest fashion accessory suppliers to the trade. Its jewellery and accessory designs include “vital must-have” Pandora-look charm bracelets featuring an interchangeable lamp.

Also included in their ranges are long seed bead necklaces, inter-spaced with decorated beads. Together with glass designs in an array of rich, lustrous colours, these create a good splash of colour to any display.

Italian costume jewellery is held in equally high regard. Zoppini conjures collections with a multitude of magical tones, materials, styles and designs. The fashion conscious brand is boldly recognisable for its unique concept of subtly setting a trend, and at the same time reflects our day to day living, desires and image.

We truly can look a million bucks without a millionaire’s budget. Spirits can’t help but be lifted with Valentina Jewellery’s new, strikingly pretty Mille Fiore pendants. Meaning 1000 flowers, each pendant has its own story to tell. Made entirely by hand from authentic Murano glass, tiny slices of patterned glass cane or “Murrine” are fused onto the base heart or disc bead. The designs are completely random, making each pendant totally intriguing and unique. The more you look, the more you find!

Still not convinced? Consider these words from Sarah Watmore of Fat Lip. “The jewellery industry should take fashion jewellery very seriously”, she urges. “It is highly adaptable. It’s far easier to create a great statement pieces using readily available and affordable materials than with more expensive metals”.

In what are challenging times, it’s refreshing to see fresh, bold, highly creative and aesthetic creations. Success is there to be had. For designers short of inspiration, consider these words of wisdom from Punky Allsort’s Alayna Salter. "If you’re brave and have a great idea, use your initiative and just go for it. I wanted to create a young, fun brand that didn’t follow the rules of the more formal traditional trends and now the success of the jewellery is providing me with great opportunities to further my music career!"

A look at retail credit

(A piece I wrote about possible retail credit options. Written mid 2008)

Credit where credit is due

Standfirst: Fed up with the doom and gloom? Nick Aston looks at offering credit as a way of boosting your sales

Pullquote: ‘Credit and payment terms have always been popular at the lower end of the market. There’s no reason why these options couldn’t work at the higher end’

Rising inflation. House market crashes. Lending cuts. We’ve been hearing it for a while now, and we could need one almighty painkiller to get rid of this hangover. The International Monetary Fund’s latest Financial Stability Report warns, “financial markets remain fragile and indicators of systemic risk remain elevated”. At home, the UK’s sales volume between May and June fell by the lowest rate since records began in 1986 (although some put this down to unseasonably good weather in May boosting high street sales). Consequentially the Bank of England is under pressure to curb a sixteen-year high inflation rate. There’s no doubt that some signs of the economic uncertainties we faced in August 2007 are still evident.

Speaking this June Alistair Darling admitted, “it will take time for these global difficulties to work through”. Yet a 1970s-like state is less convincing when long-term considerations are added. Retail sales increased by almost four and a half percent compared to this time last year. Luxury retailer Richemont recently reported an increased jewellery turnover of £100 million compared to the same period in 2007. Demand for luxury goods has risen and research firm Verdict predicts business within this sector to more than double within the next five years. Breitling, Rolex and Tag Heuer have all experienced strong sales in recent months.

Retail finance is an option that can help boost these sales further. While banks are cutting borrowing, retail credit providers are experiencing a surge in business. The opportunity, selling guru and regular Jewellery Focus columnist Leonard Zell argues, is one that jewellers too often pass up. Worse still, they can mis-sell. “I have visited so many stores”, he says, “where the sales people have no clue how to sell credit. They almost seem afraid of scaring off the very people you want in your store because they feel they won’t like the rates. Worse still, they don’t have a clue how to sell the concept”. When it comes to borrowing, Zell says many business owners fare no better. “So many are afraid to ask for help. It’s nuts – if you need financial advice, talk to someone. Go out there and talk to banks, financial service providers. Just don’t sit there doing nothing about it!”

A possible solution to both retailers and wholesalers may be in the form of invoice financing. “In many ways” says Ian Robins, Sales Director for Ashley Commercial Finance, “it can be sold as interest free credit as far as the retailer is concerned”. Through invoice financing, an invoice is raised by the wholesaler to the retailer on agreed payment terms. This is then discounted or factored for up to ninety percent of its face value. Once due, the retailer pays the factor the full invoice amount. When the charges have been accounted for, the final balance is advanced by the factor to the wholesaler. “The benefit here”, Robins continues, “is that it gives a wholesaler the opportunity to sell more items in bulk. Since retailers can spread the cost, they can spread their cash more evenly and the wholesaler knows that they can have the cash coming in”. With Christmas approaching fast, he adds that demand for Ashley’s services has soared. “We’ve noted a substantial increase in enquiries”, he continues. “We have bigger deals on the books that historically would have been a banks’”.

Indeed, a number of providers are taking advantage of the banks’ reluctances to lend. Providing specialist asset finance and block discounting for more than 5,500 businesses, Hitachi Capital specialises in Point of Sale finance. A member of the Japanese Hitachi group of companies, they have more than twenty-five years of experience in the field. They’re now firmly established as one of the main providers of retail finance within the UK. John Atkinson, Group Head of Marketing, says its core aim is to increase retail sales and “deliver increased footfall through targeted point of sale, direct marketing and guidelines on advertising”. When it comes to testing times, he says, “You always have to offer the customer what they want and can afford. We aim to fully utilise your existing customers to buy more jewellery through your marketing and targeted use of point of sale finance”.

Professor Patrick Barwise of the London Business School made similar comments earlier this year. His findings from an extensive review of advertising expenditure during economic downturns concluded: “if competitors retrench, those who maintain or increase their ad spend achieve a higher ‘share of voice’. Any reduction in these companies’ short-term financial performance is typically soon outweighed by their increased revenue and profit growth when economic conditions improve”. In other words, success comes to those who spend more, and spend it wisely, when other businesses are making immediate savings by cutting back on marketing. If this is the case with marketing, finance providers could argue the same with offering more flexible credit terms with your customers.

Stewart Wicks, an independent business consultant for a wide range of businesses and charities, says that in today’s market this is essential for both wholesalers and retailers. “Point of sale finance can be a real deal-clincher”, he says. “You might have something of real interest that a customer would love to buy, but can’t afford right now. By allowing your customer the option of deferring the payment you could well be looking at a sale you would never have had before”. However he warns, “often you’ll find that the repayments with most POS deals are higher than bank loans. If you can offer a low-interest option, or even interest-free, you can generate significant customer loyalty”. That repeat business, he says, can significantly drive your sales.

Leonard Zell is in agreement. “Repeat business is key, but look at boosting add-on sales. People can afford it but sales people often ignore the importance of these. Yet look at the credit card companies who promote the rewards you get – they don’t mention the interest at all now because they know their customers max out their cards!”

However, John Atkinson is keen to stress that businesses have to know their limits with buying. “We always encourage customers to not over-commit. You should only buy what you know you can afford. We work with quality retailers and have a team of in-house training partners that work with the jewellery branches to ensure all sales staff can understand the finance product”. Through doing this, he says, Hitachi “ensure the best product to suit the customer need”. Consequentially, though, you do end up waiting for payments and your immediate cash flow is affected.

There is help at hand, however, should a situation like this become a problem. Business Link is a national Government-funded service providing free of charge business advice to companies on a range of subjects. These include borrowing, business planning, debt recovery and business banking. Stephen Herman, Business Adviser for Business Link East, feels that businesses should take advantage of these services. “It’s now much harder for businesses to extend their lines of credit. We’re seeing some consumer belt tightening and in the business-to-business trade, there’s a combination of raw material and energy inputs and a reluctance to raise prices too much. All of this puts strains upon sales”. Was this something the UK economy needed though? “It’s more a question of when a reality check came whether than if it was needed”, he says.

While he acknowledges that the service does not provide the role of “an economic forecaster”, Herman says, “Retailers can rely on Business Link to provide practical, down to earth and independent advice on a range of business problems”. However, he has a defiant confidence in the trade. “Retailers have always been very inventive in finding ways to promote sales in hard times”, he says. “Credit and payment terms have always been popular at the lower end of the market. There’s no reason why these options couldn’t work at the higher end”.

In an age where technology is playing an ever-increasing role in our lives, he provides an interesting marketing strategy for luxury wholesalers and retailers. “In any downturn”, he says “there’s always a niche for a specialist retailer and it’s well worth looking at the opportunities for selling your items online.” While he admits “it’s very competitive”, he adds that “you can reach a much wider market very fast. If you don’t want to devalue your shop brand, create a new-online identity. Business Link can help you there”.

Fundamentally, he concludes, the biggest threat to your business isn’t the economy, but negativity. “Retailers are concerned at the increasing lack of credit on offer”, he says. “But there’s a danger of talking oneself out of business. How much has your revenue actually declined and your cost raised? Above all, what are you actually doing about it rather than just talking about it?” Services such as Hitachi and Business Link, after, all, are “here to help you – just come and talk to us instead of to yourself!”

Business Advice

Bill promptly – invoicing promptly and regularly should help ensure a steadier flow of cash into your business. Negotiate for regular payments across the life of any long-term contracts you may have.

Avoid overtrading- don’t continue to accept orders that you won’t meet if you have insufficient cash and/or resources.

Recover debts- chase up any debts owed to you.

Trim your inventory- this ties up your cash significantly. Take the time to plan a stock reduction program and consider advertising this.

Renegotiate your credit limits – adjust your payment dates and credit limits with your main suppliers.

Consider factoring/invoice discounting – sell your outstanding invoices to a third party. The factors pay some of the debt off in advance of collection.

Sell unused assets – raise cash by selling your under-utilised assets and lease them back. Make sure these are sold at their true value and check whether the sale will result in a profit or loss.

Reduce overheads – review these regularly, especially if you have problems generating cash. Avoid cutting to a level where it is difficult to operate.

Generate new sales from add-ons – you will be surprised at just how many sales you can generate here.

Advertise – let your customers, both potential and existing, know you’re out there. Promote those special offers and new ranges!