Swag MD on the surprisingly rapid success of Diamonfire.
Jeweller Swag has a good reputation as a retailer, but managing director Edward Ferris took the industry by surprise when it was announced he was turning his attentions to wholesale. He meets with Rachael Taylor six months after launching DiamonFire, a brand of silver and CZ jewellery that has stormed the UK.
Branching out into a new businesses area is often a trick companies pull when their core market lulls, but for retail jeweller Swag the addition of a new string to its bow couldn’t have come at a busier time in the company’s history.
Swag was established in Kingston, Greater London, in the 1970s when founder Bill Ferris decided to ditch his career as a pilot for British Airways in favour of working for himself. He settled on the idea of selling jewellery – alongside other gift products such as teddy bears and silk scarves, which were later dropped from the offer – and ploughed the little money he had into buying costume jewellery, often strings of beads that he would take home and transform into jewellery at his kitchen table.
Swag’s first day trading in 1974 was a success, with the store taking £80; something of a coup when nothing in the shop carried a price tag of more than £1. The business continued and grew, slowly swapping costume jewels for diamonds, and a new generation of family members joined the Swag team, including its current owner Edward Ferris, Bill’s eldest son.
Swag had continued to slowly evolve over the decades, building a more exclusive product offering and opening more stores, but it wasn’t until 2009 that a real firecracker entered the business and took parent company T & E Ferris to new heights. That firecracker was not a person, but a product – Pandora – and it revolutionised the business.
As well as selling Pandora in its Swag stores – there are now six Swag shops, in Bluewater, Bromley, Croydon, Kingston, Staines and Watford – it also went on an enormous expansion drive, opening 17 Pandora concept stores in 17 months; a breathtaking feat for a small family business. While the Pandora division of the business is run by Ferris’s brother Tom Ferris, he was deeply involved in setting up each new store and it is a period of his life that he remembers with mixed emotions.
“I was glad when it came to an end, but I do miss the excitement,” he smiles.
Rather than an ardent desire to spread its retail wings, Ferris says that the decision to get so deeply involved with Pandora, so quickly, was a defensive action at first rather than an offensive one. “A Pandora shop opened in Bluewater [where Swag has a store] and we were only told a month before,” says Ferris. “We were really into Trollbeads at the time. Pandora had had a good Christmas and we heard the kind of figures they were doing. We thought that we needed to protect our towns, so we spoke to Pandora and said we wanted to open up four stores in our towns.”
When the meeting came around T & E Ferris actually asked for permission to open 25 stores, not four, much to the surprise of Pandora’s Nigel Simpson. “He had been in the job a week and said yes to everything, but he didn’t realise how many other people were asking,” says Ferris.
After Simpson took the requests back to HQ, the wish list of 25 stores was knocked down and a number of 18 was settled upon, although the 18th store was never opened, with T & E Ferris settling for 17 Pandora concept shops.
There has been much debate in the industry as to the longevity of the Pandora phenomenon and many retailers have begun to talk strategies focused on relying less heavily on the brand. For T & E Ferris, Pandora forms the majority of the business, so is the company’s first venture into wholesale with CZ silver jewellery brand Diamonfire a way to soften the blow if Pandora loses its power?
It’s not something that he’s thinking about, says Ferris, who believes that the Pandora brand has a longer lifespan than many in the trade might think. “In the past three months our Pandora sales are up considerably, even in the shops where we see a general decline,” he says. “Everything they bring out seems to add to the brand, not drag it on. I have faith in the concept. I don’t think you can build a business that big that quickly and have it disappear overnight.”
Ferris expects the Pandora business to continue to prosper and with six Swag stores added into the mix there would be enough work at the family-run company to keep even the most hyperactive jeweller in the world busy, but it would seem that Ferris’s thirst for new challenges refuses to be sated.
It was on a buying trip to BaselWorld in March that Ferris and his team first discovered Diamonfire. While browsing an aisle at the trade show Ferris suddenly realised that each member of the buying team had stopped, unbeknownst to the others, at the same stand, that of Diamonfire. After a cursory discussion as to whether the jewellery held real diamonds or not – Swag’s diamond specialist Adam Gillary instantly identified it as the latter – they struck up a conversation with the company and discovered that it had no representation in the UK, which the team instantly recognised as an opportunity. When the group planned its trip to Switzerland, coming home as a distributor was never on the cards, but Ferris says that “nothing in the history of our business has been planned”, adding he believes in a mantra of doing rather than thinking, and so they approached the brand.
Diamonfire is a new brand, set up in 2007 by Burkhard Müller, but it is owned by a company that has been specialising in high volume, high quality jewellery for the past 30 years. The brand has been rapidly picking up global distribution with partners in Europe and Australia, and the day before T & E Ferris sat down to discussions it had just picked up a partner in Spain that was also a retailer, which paved the way for its proposition and Diamonfire agreed.
So far, in the six months that T & E Ferris has been distributing the brand, it has already picked up 170 accounts, a phenomenal feat in a market spoilt for choice of silver brands and one that has been less than welcoming to new, unproven brands.
The trick to such a rapid expansion has been dogged perseverance. Ferris has been extensively travelling the country with Diamonfire accounts exec Katherine Knox, visiting retailers wherever they could get an appointment, something that he says was made easier by other retailers’ curiosity as to why he was suddenly knocking on their doors with a product to flog.
“I took the collection, put it in a bag and called 10 friends,” recalls Ferris. “I didn’t expect anything, but all of them placed orders. It was easy to get meetings with other retailers as they were all wondering ‘what’s this guy doing coming into my back yard?’.”
Ferris says that the road trips were also a learning experience for him as a retailer, as he got to take what one might describe as an educational trip, evaluating all of the other jewellery retailers across the country and says he banked more than a few examples of best practice to take back to his stores. “From a Swag point of view it has been hugely beneficial, getting to travel the country to see retailers that I never get to see,” he says. “It was an eye opener.”
Ferris backed up this successful door knocking expedition with two shows. At the CMJ Buyers’ Meeting it picked up 38 doors for the brand and at IJL where it topped up its stockist list with a further 25 doors.
While retailers were curious about a fellow retailer turned sales rep, curiosity does not equal sales, and once through the door, Ferris knew he had to deliver with a standout product capable of making some noise in the crowded silver jewellery market.
The product itself offers superior-grade cubic zirconia set in silver triple plated with rhodium, palladium and platinum to ensure whiteness, tarnish resistance and strength, in a variety of traditional styles at prices that are hard to believe. One of the most popular starter items has been a promotional gift set containing a pair of studs, a ring and a pendant that has an RRP of just £95. Ferris says the prices are kept low by smaller margins for T & E Ferris and a high output from Diamonfire’s factories in China, wholly owned by the German company, that allow retailers to pull in margins of between 2.8 and 3.
It is this combination of quality and price sensitivity that has led to the brand’s success, says Ferris, and also perhaps a touch of sensitivity from a wholesaler that knows only too well what it is like to be a retailer dealing with a jewellery supplier.
A key moment for Ferris was when people within the jewellery industry came to him asking to buy pieces of the jewellery for themselves. He says that the range has huge appeal from younger shoppers who aspire to one day own diamonds, to more mature shoppers who own diamond pieces but want similar jewellery that they can wear every day, or on holiday, without fear of losing it.
The ascent up the stockists list has been gratifyingly sharp, but Ferris feels that there is much work to do to develop Diamonfire as a strong branded player in the market, but says that the choice to grab stockists first and build a brand second was a conscious one.
Ferris is hoping to add a few more stockists before Christmas – a maximum of 200, most of which he believes will come from exiting stockists adding the brand to further stores within their network – but after that he will slow down the distribution rampage and really focus on building up the Diamonfire brand in the UK.
With such seeming ease of success, will this be just the beginning for T & E Ferris the wholesaler? While Ferris sticks to the line that he never plans in advance, he hints there might be some plans glimmering in the distance. “We have been talking to other brands about taking them into the UK,” he admits.
T & E Ferris now has a three-prong attack to jewellery retail in the UK: it is a successful independent retailer, a sizeable franchise partner to the biggest brand to hit jewellery and is now a wholesaler with obvious skill. For a company that likes to keep a low profile, it is certainly making a lot of noise this year and we expect to hear more in the future from this innovative family business in the near future.
What makes Diamonfire sparkle?
Diamonfire uses high-grade cubic zirconia stones that are hand sanded to achieve 57 facets. The stones have been cut to match the same ideal cut standard used in diamond grading, with each stone scientifically measured after being cut to make sure that the facets make the grade. Once each CZ has passed muster it is graded to the same standard as diamonds with cut, clarity, colour and carat all recorded and noted in a certificate that is packaged with the jewellery. All Diamonfire jewellery is in silver but the metal has been triple plated to ensure that it does not tarnish and to make it stronger than standard silver. The silver is first covered in a layer of rhodium, then a layer of palladium and finally a top coat of platinum to achieve strength, longevity and a brighter white colour. Although the jewellery will not survive extensive day-to-day wear in the way that gold or platinum will, as silver is a softer metal, it is sold with a no-quibble lifetime guarantee.
This article was taken from the November 2012 issue of Professional Jeweller. To read the issue online, click here.