FEATURE: An analysis of the silver market in 2015

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Branded silver may have saved retailers during the dark days of the recession, but now optimism is surging and spend is returning could it be in for tough times of its own? We analyse the silver market from the perspective of bullion dealers, assay masters, manufacturers and brands to find out more. 

Let’s start with the facts. According to figures compiled by the Birmingham Assay Office from all four UK Assay Offices, silver hallmarking fell by 6.4% in the first quarter of 2015, with 925 dragging the results down considerably.

Sterling silver experienced a dip of 6.7% compared to the same period in 2014, with 1,039,613 items being assayed overall. Granted, this is still a gratifyingly high number, but it does lend itself to the argument that gold is having a renaissance, perhaps to the detriment of its cheaper precious metal peer.

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Gold assaying rose by 3.1% in Q1 2015, with 18ct up 12.4%, 9ct up 0.7% and 14ct showing a slight decrease of 0.1%. Of course, this only shows what’s entering the market, but it’s a convenient place to start.

Dr David Jollie, head of research at Mitsui Precious Metals explains that on a wider scale, silver demand is holding its own. He comments: “Silver demand has been fairly robust in recent years despite the wild movements in its price. Industrial demand has been fair as growing use of silver in the solar power sector off-sets thrifting, where industrial users have tried to minimise their use of this metal in existing applications, following the move above $40 (£26.34) an ounce.”

He continues: “Jewellery demand has been relatively strong, particularly since the price has fallen, while investment flows have been much steadier than in its sister metal, gold. Although there seems little prospect of strengthening demand driving higher prices, slow economic growth should provide some support at current levels.”

Similarly, Jewellery Quarter Bullion Ltd founder and managing director, Rob Halliday-Stein, comments: “So far in 2015 our silver sales are up slightly by 2%, but due to the lower price our volumes are up 15% to almost five tonnes. Silver investors tend to be even more responsive to movements in price than gold buyers and are very quick to take advantage of price dips.”

If demand is strong and prices are low, what does this say about the UK jewellery market, which appears to be tipping in favour of gold?

Simon Rainer, chief executive officer of the British Jewellers’ Association London last year and even at this year’s Baselworld fair, members are reporting a healthy rise in demand for yellow gold and I hope this trend continues – 375 in particular is a great barometer for our industry.”

Consumers are likely to be the ones driving the trend towards golden hues, especially as the summer season and 1970s fashion revival hits the High Street. However, Edinburgh Assay Office assay master and chief executive officer, Scott Walter, suggests that a dip in hallmarking stats for silver could be due to other, less obvious, factors.

He explains: “I think there are some additional factors to take into account with regard to the drop in demand for silver hallmarking in the UK that may otherwise skew the picture. The move by many leading brands towards silver products combined with other materials like leather, fabric and rubber mean that many of the items fall below the mandatory hallmarking weight.

“There are a number of significant global players in the market that have centralised hallmarking in other European locations in the last 24 months. Their product still sells in the UK but the numbers are not reflected in the hallmarking figures. On this basis we have to be careful about drawing any firm conclusions, based solely on the drop in demand for silver hallmarking.”

Bearing in mind the troublesome nature of hallmarking figures, it’s perhaps best to turn to those manufacturers and wholesale brands selling silver on a day-to-day basis.

According to George Curteis, account manager for chain specialist Curteis in the London area, silver isn’t an immediate concern. He notes: “There’s certainly been an increase in the popularity of yellow gold; however this hasn’t translated into a fall in white metal sales.”

He adds: “Silver has proven itself to be remarkably resilient both at lower price points and for more aspirational design-led pieces.”

From a manufacturing perspective, Weston Beamor’s business development manager, Glen Day, is also optimistic about silver. “The main demand for silver castings is from customers making earrings, pendants and brooches. We do also cast silver rings but not as frequently as the other pieces.”

Day also notes that Fairtrade silver is growing in popularity, with Weston Beamor receiving more and more enquiries from British silver jewellery companies, which currently have their stock cast overseas, looking to return production to home shores.

At the opposite end of the spectrum, H&T Pawnbrokers operations director Peter Kelly agrees with Curteis and Day. “Silver is experiencing a mini-revival at the moment in both our H&T Pawnbrokers and Est1897 Discount Secondhand Jewellery stores,” Kelly remarks. “We have started increasing the amount of silver jewellery we have in store due to the higher demand. In particular, we have noticed a rise in popularity of silver jewellery for men, such as chunky bracelets and chains.”

Taking all of the above into account, could the UK jewellery industry be in the midst of a double-whammy – a steady silver market and a growing gold market – spurred by a slow climb out of the recession?

This certainly seems to be the case at multiple Beaverbrooks, with diamond and jewellery buyer Lorna Burnhouse noting that both silver and gold are performing well. She says: “Both silver and gold play a very important role for our customers at Beaverbrooks and there is a lot of talk about gold being more desirable this year, but obviously it is still too early to say. However, all the signs are showing positivity which is great for a buyer as we can have much more fun with ranges and really give our customers fantastic choice at great quality and prices.”

Currently, Beaverbrooks channels its silver product into two broad ranges; classic and trend-driven. Burnhouse notes: “I think the three colours – white, rose and yellow – will stay a popular choice for customers this year. Coming into spring we are seeing, and hearing within the trade that colour is in great demand too.”

This certainly seems to resonate with Sarah Bennett, jewellery director at The Genuine Gemstone Company’s designer brand, Gemporia. She remarks: “Silver jewellery sells really well for us at Gemporia and this season we’ve seen a rise in pastel coloured gemstones set in silver, with favourites including aquamarine and morganite. As the summer approaches our customers are opting for statement pieces that will take them from day to night.”

Equally, British silver jewellery brand Kit Heath has noticed the same emphasis on coloured gemstones. The brand’s eponymous founder explains: “Our Society collection has always been popular, even more so when we filled it with sparkling gemstones. London blue topaz and amethyst have been the best-sellers in all designs.”

Blue topaz and amethyst played a starring role at the spring trade shows, especially at Amore Argento and Mark Milton. In fact, shades of blue have been popular across the board, from fashion jewellery brand Ti Sento with its faceted zirconia, to Stephen Web- ster, Claudia Bradby and Dower & Hall.

Kit Heath continues: “The muchloved Lust Heart necklace is an all time favourite. It sells time and time again. The artistically designed solid sterling silver heart makes a pretty everyday throw on accessory or a special gift.”

Notably, the Lust Heart necklace is completely devoid of any additional decoration and RRPs for £45, putting it comfortably into the accessible jewellery bracket for consumers.

We’ve firmly entered the arena of trends in the silver jewellery market, but what’s interesting is that there isn’t mass-agreement on what’s trending and what’s not — signalling the vastness of the silver jewellery market itself, the varying tastes of customers and the design freedom the metal offers generally.

For Glen Day at Weston Beamor, consumer tastes appear to be focused on natural products – like starfish and shells – presumably playing into the wide organic trend that Professional Jeweller noted in the wake of Jewellery & Watch Birmingham in February.

At Edinburgh Assay Office, Scott Walter points to the continued popularity of friendship and charm bracelets. He comments: “The evolution of the concept has moved strongly towards the use of silver in combination with other materials like chord, fabric, leather and rubber. The use of gold-plated or solid gold elements to contrast with silver and the use of brightly coloured chords and leather have continued to develop as a dominant trend.”

This was perhaps best seen at the spring trade shows, with the duo metal trend – mixing silver with either gold or rose-gold plated elements – proving particularly influential at Clogau, Purity 925, Pandora, Mark Milton and Gecko’s Elements Gold ranges, among others.

But doesn’t the growing trend for duo-metal finishes, coloured gemstone adornments and the phenomenal rise of gold and rose-gold plated pieces in general, suggest that plain silver in its simplest form is no longer going to cut it for the consumer? It’s price and accessibility is obviously still paramount, but what about its look? Even Pandora, the power-house of branded silver, is gearing-up to present its Pandora Rose offer later this summer, for example.

Assay master Scott Walter believes the continued rise (and rise) of gold-plated silver highlights that the self-gifting market “wants the gold look and that they also want to purchase in precious metal but perhaps can’t stretch to the higher price points”.

Director of JHJ Consultancy, Jo Henderson, is also of the assumption that the “fashion for heavy generic silver jewellery has passed, due to the historic price rises in raw materials and due to the huge impact brands have had”.

She continues: “We are certainly seeing a move towards plated jewellery and not just to add colour, most if not all brands now rhodium-plate their silver to eliminate tarnishing.” Henderson points to the layering options available at ChloBo and Clogau’s collection of silver and rose gold designs by Sarah Jordan as particular highlights, with Sif Jakobs, Alexis Dove, LucyQ, Oak and Muru also on her list as silver collections to watch.

Kit Heath appears to agree and disagree in equal measure, admitting that the self-gifting market is turning its eye from silver, but isn’t afraid to opt for duo-metal pieces with a hint of the ‘old favourite’ packaged in new ways. He comments: “It feels like there is an excitement for luxury goods as people are starting to self treat. People have always been happy to buy silver jewellery as a gift for someone special but found it hard to justify for themselves.”

Heath continues: “There is definitely a rise in the call for gold pieces, but we have noticed this is mostly popular where silver and gold are combined. This has become a substantial offering within our collections, creating the perfect mix of sterling silver and 18ct gold or warming rose gold plate to ensure we are fulfilling that section of the market.”

There appears to be three strains of the silver equation that disrupt the all-to-easy ‘rose and yellow gold-plated pieces and gemstone adorned pieces are out-selling plain silver’ argument. The first is offered by Kit Heath, who notes: “Ultimately, I think there is a real love for quality silver designs and I don’t feel this will change.” The second is offered by Jo Henderson who argues customers are so brand-orientated they are “less concerned with what a product is made of and more which brand it is”. The third was offered by Scott Walter when he suggested that customers are buying plated-silver because they’re aspiring to fine jewellery and might not quite be able to reach the RRP.

With all three of these creating the back-drop for silver in 2015, it puts retailers in an all-too-familiar territory trying to appease the needs of brand-fanatics, traditionalists and luxury seekers.

For the latter, recent developments suggest 9ct and 18ct yellow gold designs could be on the rise. “There has been an increase in the number of 9ct gold articles submitted for hallmarking. This has no doubt been facilitated by a relative reduction in the gold price,” explains Walter of the Edinburgh Assay Office. “We hope this increase will be sustained but this will be dependent on sell-through at retail.”

Leaving the market for significant – bridal, wedding, christening – and investment jewellery purchases to one side (as those are typically gold and platinum), could the interest in plated jewels signal a move towards more expensive yet still fashion-orientated purchases?

Evidence would suggest yes, especially across the megabrands like Pandora (with its 14ct yellow gold collections) and Links of London (with its LunaGems offer). Equally, Thomas Sabo has introduced a fine jewellery collection across its flagship boutiques and Mi Moneda offered visi- tors to Baselworld a glance at its new fine jewellery offer — incorporating the same interchangeable coin and pendant design in 18ct yellow gold.

Despite this, silver will always have price on its side. As Walter argues: “Until the price of 9ct gold significantly drops, I think that silver and especially gold-plated silver will continue to perform strongly. For the mass market the emphasis remains on ‘the next big thing’ and any fashion brand’s fortunes will ultimately remain hinged on their success in leading and/or predicting those trends.” George Curteis adds: “Despite the market being fairly densely populated with competing large branded companies selling high-volume silver jewellery, silver remains sought after by the consumer and as the medium in which many of Britain’s best young jewellers choose to work.”

To further the debate, Professional Jeweller opened the floor to some key players in the UK trade; both established retailers and brands to emerging talents, to discover their opinions on the silver market in 2015. Specifically, we presented them with the purposefully provocative statement: “Silver is no longer enough on its own — it needs adornments, yellow or rose gold-plating, gemstones, crystals or unusual textures to tempt the UK consumer in 2015.”

Their answers can be seen here…

Rachel Galley, founder and designer, Rachel Galley Jewellery

“My brand is quite focused on pure sterling silver. I don’t use a lot of plating, only on certain collections and they command higher price points — gold costs more money even in overlay. I think consumers dislike the fact that plating wears off, and they don’t accept that they should have to pay for this to be re-done after a period of time. They presume it is like pure gold and therefore should last eternally which as we all know is not true. So there are some awkward customer situations that occur when trying to discuss plating issues, certainly when people treat it so differently. I think my collections look a lot stronger now I’ve stripped the overlays out of it. It’s pure, clean and bold without confusing miss-matching colours on point of sale and items being left unsold when their matching items have gone. This creates a more confusing and distracting display and is less cohesive overall. Since stripping multiplate colour options from my ranges they have become a lot stronger and are selling through much better.”

Maureen Hooson, managing director, Mococo

“20 years ago the trend in the UK was still with 9ct yellow gold. Since the huge sterling silver fashion trend came into force around 10 years ago we have been using this now powerful metal in different forms. In the past couple of year, it has been towards rose gold vermeil. We are therefore still very much with sterling silver, but offering the revival of the gold trend in a much more affordable medium. In my opinion, sterling silver is as strong as ever, but we are just offering it in a choice of colours other than silver.

Lucy Quartermaine, founder and designer, LucyQ

“Personally, I love the full silver effect — and it works well for many of my designs. I haven’t seen a decline in demand for LucyQ sterling silver pieces. However, as fashions change, I have defi nitely seen a rise in the demand for pieces with gold or rose gold mixed with sterling silver designs. It’s all about layering and stacking at the moment and a stand-out way to do this is using multiple precious metal colours and tones all combined together.”

Phoebe Sherwoodmoore, founder and designer, Phoebe Jewellery

“Whilst silver jewellery is still very much in demand, the addition of another material adds interest to the jewellery. I use wood as an accent alongside silver or gold vermeil throughout my collections, which gives an extra dimension to the pieces. The customer is then given the choice of silver or gold vermeil or the combination of the two alongside the wood and increasingly I’ve noticed my customers opting for the mixture of materials.”

Adryan Cresswell, head of commerce, Emozioni – HD Group

“I don’t think there is much doubt that traditional silver jewellery demand has been affected by an increasing consumer appetite for jewellery to be more closely linked with fashion. We have been acutely aware of this and of course we have needed to act accordingly. As a silver jewellery brand, our job is to satiate the consumer demand for a more fashionable look, whilst not disengaging ourselves from our heritage. This is important as it would be wrong to assume that classic jewellery designs are now obsolete. These designs still sell very strongly within the Hot Diamonds portfolio. We have noticed, however, that consumers are increasingly insistent that the classic jewellery they do buy is beautiful across all of the consumer touch points. From design and in-store presentation to packaging and marketing creative; every touch point needs to be stunning and reinforce the brand’s identity. Perhaps it is more difficult to sell generic classic silver jewellery now than it was a few years ago because, by definition, not all of the consumer touch points can be beautifully considered. If it is true consumers’ expectations in relation to these touch points are higher now than previously was the case, this could help explain a shift away from this traditional revenue stream.”

This feature originally appeared in the May 2015 issue of Professional Jeweller. Read it here.

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One Comment;

  1. Shaun said:

    Good read. With silver experiencing a lack of interest, it’s easy to why there is a price drop. Let’s hope this improves before the end of the year.

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