Strategy in Troubled Times
By Dennis Allen
Can any plan help with gold and silver at record highs?
Those with good memories will remember the recessions of the early 80's and 90's and wonder if we are in for a repeat downturn. No plan will have forecast this and with silver prices doubled and gold up by 60% (at the time of writing), what is the point of planning?
As always, there are differences between every move in the market. In these last two major recessions there were other significant factors that made them worse for the jewellery industry. The 80's saw 3m unemployed and silver up to £21 (which makes the current price seem cheap!) while gold reached £333. The 90's recession had 15% interest rates and the troubles of the then Ratner group. Both saw significant falls in sales although their outcomes were different; the first led to a major sea-change in the way mass jewellery was made and sold, and lowered the age range of those prepared to enter a jewellery shop, while the outcome of the 90's recession was very rewarding to the industry despite the initial fall in sales. The new customers decided that they wanted to continue to buy jewellery so moved away from the bottom of the market to the benefit of the Independents and better end of the market.
Knowing that every cloud has a silver (and gold) lining was no help at the time and both those recessions represented major upheavals. What lessons can we learn from the past and what is the current situation, by comparison?
A major difference is that the UK economy is not in recession, but it has been experiencing a retail recession. We are in one of the most successful western economies and this is a major shift from the UK of the past. With low unemployment, inflation stable and growth still above that of our European competitors it is unlikely that we will suffer as we did previously. There is, however, a major destocking by retailers still in progress and the Assay figures reflect this. On previous performance restocking is likely to be slow and cautious while there is every indication that precious metals will stay high in price for some time.
On the plus side, retailers are sounding a little more positive than a year ago. Lisa Chambers of Lisa Chambers Jewellers, commented: “The higher prices are a good reminder that metals are precious but we feel that it will also boost alternative materials”.
For watch company Accurist, MD Andrew Loftus said: “Last year was a correction in the market and we are already seeing signs that stocks are at healthy, lower levels with orders coming in, in proportion to those lower stocks”.
Leading economic commentator, Hamish McRae of the Independent newspaper, recently pointed out, with cautions, the increasing strength of the housing market and expects world growth to continue for two years even with higher interest rates.
So is this similar to the previous recessions? Yes, if the measure is the fall in supply orders. No, if you look at the underlying strength of the economy and there is a perception that the higher prices will help, not hinder, sales development.
There are business plans aplenty on offer but they almost never prepare you for the inevitable. All plans vary and it is best to take them as an indicator of goals and be prepared to flex the planned steps while keeping your objective in view. We can regard it as inevitable that recessions happen, metals go up and down in price and messy things occur in the real world. A plan can be a simple document but a good one at least considers different scenarios for the future.
In retail there is a last positive note out of the high metal prices. Savvy retailers are taking the chance to melt old stock, which will be replaced by newer, up to date styles from switched on suppliers. Are you one of these?
Dennis Allen will be writing regularly for
J-Dex. He is working as an advisor to owner managers on business development for small and medium size companies. He can be contacted at dennis@dennisallen.f9.co.uk #
DAVRAN JEWELLERY
Come on England!!
Buy the new ‘Cross of St. George” cufflinks, tie tacks and pendant, from Davran.
It is a gift for men that should sell well during the World Cup.
We are manufacturing and stocking the cufflinks and tie tacks in 9ct, silver or brass hard gold plated, the enamelling is cold cure. We are only producing the pendants in 9ct or silver, the chain is not supplied with the item.
Please speak to John on :
0121 523 1662 for further details.
By coming into contact with jewellery every working day you are honing and expanding your knowledge and valuation experience. I can value anything from antique jewellery to contemporary items. Notable recent trends have seen an increase in imported jewellery and non hallmarked items being bought in to be valued. The amount of white gold and platinum items is also more prevalent”.
After a busy morning working in Chester, we met up with Georgina in Altrincham at the Flag Ship store of the renowned independent jewellery retail group – David M Robinson.
Altrincham lies some eight miles south of Manchester and with a population of over 40,000, it still retains its distinctive sense of being predominantly a market town.
David M. Robinson has 6 stores across the North West and has been crafting exclusive jewellery since 1968.
Creating exclusive diamond collections jewellery has become their trademark
and David M Robinson himself is a two times winner of the De Beers Diamonds International Award – the top award of the diamond jewellery design industry. David M Robinson Jewellers has two main divisions; the David M Robinson Yellow Box Collection of exclusive diamond jewellery which features the Dreamcatcher, Honeycomb and Cloud Nine ranges and the watch division which includes, Rolex, Patek Philippe, Cartier, Chopard, Breitling and Tag Heuer to name but a few. The Group sees its success in
the premium end of the UK retail jewellery sector as the product of many things; a caring business ethos, unceasing commitment to customer care and unquestionable professional integrity.
David M Robinson has recently elected to start promoting its own SafeGuard Valuation Days throughout the Group. Georgina has been providing the group with added value jewellery valuation services for some time and they are now looking to promote a combined SafeGuard Jewellery Valuation and Design Day in conjunction with their own in-house bespoke jewellery designer.
Wendy Song – Operations Manager at David M Robinson explained that the Group recognised the potential to offer additional services to their customers by expanding the provision of SafeGuard Valuation Services across all of its stores.
Georgina concluded that “The beauty of a SafeGuard Valuation Day is that it provides additional income to the retailer and at the same time provides a valuable additional service to the consumer. SafeGuard Valuers are able to give expert, independent advice to the customer as well as promote other services that the retailer provides, such as repairs, insurance and credit facilities.”
For further information on all Safeguard Valuation Services please contact
Tel: 0121 262 1024