IN DEPTH: A bright future for silver?

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How a fall in price has bought a fresh face to the white metal.

Annual silver hallmarking figures have declined by six million articles in the past decade, but as the silver price eases, jewellery brands are reacting with fresh designs tailored to fit customers’ spend. Kathryn Bishop hears from bullion dealers, wholesalers and British brands about what’s new and next for the white metal.

In 2004 the UK’s four assay offices hallmarked a total 10.8 million silver articles; in 2013 this figure had declined to 4.7 million pieces.

Of course, price has played an important role in impacting the amount of silver jewellery being produced and sold in the UK. But the changing tastes of consumers and the shift in jewellery trends has created a melting pot of silver brands that are innovating and jostling to win customer – and retailer – approval.

But what has impacted this shift in design and use of the metal? For Elizabeth Hunt, marketing director at wholesaler Allied Gold, the silver market has become increasingly important as higher gold prices push the yellow metal out of reach of some consumers. “It is also driven by more innovative designs in silver and a broadening consumer acceptance of the material globally,” Hunt says. “Markets such as China, who traditionally did not view silver as a choice for jewellery, are opening up and offering some inspiring designs.”

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Silver as a gift-led product has also caught the attention of consumers, inspired by the past years’ boom in cash for gold initiatives, during which time shoppers came to understand that precious metals could be sold to make money, or bought as investments with hope of value increments as time went on. Rob Halliday-Stein, founder of consumer-facing bullion company Bullion by Post admits: “We have two customers buying silver; one for long term investments – people who are tucking something away for decades mostly who don’t intend to sell it anytime soon – and the people buying it for gifts. Coins and small bars are very popular for christenings still and the current prices make silver look attractive again, which is obviously a good thing in terms of gifting and jewellery.”

THE EVOLUTION OF SILVER
The kilogram price of silver has fallen dramatically in the past 12 months – as of mid-March 2013 it stood at US$910 (£552) per kilogram. At the time of this issue going to print it averaged $653 (£396) per kilo. On a five-year scale, it is possible to see how the market has fluctuated, with the kilo price sitting at $421 (£255) in April 2009, climbing to its peak of $1,493 (£905) in April 2011, with many fluctuations in the period thereafter before the steady price decline that has been in progress since September 2012.

However, as prices have fallen, so too have hallmarking figures, at a time when designers could be taking advantage of the lessening price of the metal. However, it is necessary to remember that not all items of silver need to be hallmarked – anything weighing less than 7.7 grams is exempt from hallmarking in the UK – which could suggest an influx of creativity from designers and brands tapping into and further influencing the vogue for jewels of a smaller size.

So how are designs being impacted by the shift in price? At Links of London, the clear trend has been the downscaling designs, such as its iconic Sweetie bracelet, while also focusing on hitting key price points.

“There has been a very definitive shift to smaller scale or mini jewellery over the past few years,” says Links of London head of product management Diane Smith. “We have adapted many of our key lines to tap into this trend with mini versions of Sweetie and the newly launched skinny friendship bracelets.”

Price has certainly been a driving factor for Links of London customers over the past 18 months, with Smith stating that the sub-£100 category has developed to be “an extremely competitive field” where retaining the quality, volume and weight of silver pieces has become even more of a challenge. “But we have seen a great response to innovative entry-level collections such as Aurora and Star Dust, which perfectly hit this price sensitive area,” she adds.

According to Smith, customers are looking for pieces to stack and layer together, to create their own personalised style. This trend has woven through all jewellery categories including Links’ pendants and charms, tiny studs and slim mini motif rings. “Above £250 there is a clear shift with customers seeking meaningful design, volume and originality,” she adds.

For German brand Thomas Sabo and London-based silver and gold jewellery wholesaler Ntinga, the growth of the filigree trend has allowed silver to be used in more innovative ways, making use of space and shape to create eye-catching designs with price tags that sit comfortably within customers’ expectations. Thomas Sabo UK managing director Jon Crossick explains: “Due to their filigree design, the small pendants in the Charm Club Collection offer excellent entry-level prices. Customers are purchasing our product because they love the brand and it’s designs, while the price has been fairly calculated, and it is that combination that makes customers want to purchase.”

The recent launch of Thomas Sabo’s Karma Bead collection – a range fronted by model Georgia May Jagger – has also opened up a new customer base and price points for the brand, bringing with it exploration into new silver designs. “Karma Beads have certainly caught the imagination at a wide range of price points, as we see customers purchasing pieces ranging from £100 up to £1,000 using a combination of beads, bracelets and necklaces along with pieces from our sterling silver collection,” Crossick notes. “We have bought an entire concept to the market [and] customers have loved this new take on beads and the diversity of the pieces which they use to personalise their own Karma style.”

The Genuine Gemstone Company’s chief executive Steve Bennett says silver sales have soared in recent years, and with the launch of the company’s two silver jewellery brands and retail sites Gemporia and NOWSEEN, Bennett believes silver’s popularity will hold fast.

While the company’s main focus is the gemstones it uses, the choice of metal has been important for its customers, many of whom Bennett says remark at how affordable its products are — for example its silver and gemstone stack rings are priced upwards of £10.

On the flipside, Bennett notes that many larger global jewellery brands are selling silver designs with price tags of £1,000-plus. “With the growth of metals like platinum, palladium and of course the popularity of white gold, the white metal look is here to stay, so silver offers an affordable option for a lot of customers,” he adds.

For Ntinga, the changing perception of silver by retailers has also helped to bolster the mainline collections, including a recently-launched stone-set filigree range which is intricate yet affordable in its presentation. “Everyone can see the trends in silver, and the price points are much more realistic for what today’s consumer is looking for,” says Ntinga sales manager Craig Cohen. “It is not uncommon to see silver fashion brands sat alongside more expensive pieces in jewellery shops across the country, in comparison to that of 18 months ago when many silver brands were frowned upon [by traditional retailers].”

Cohen believes the affordability and speed of the silver manufacturing process has also helped companies to develop ranges that are comparatively as elegant and intricate as higher-end pieces, but instead use cubic zirconia or gemstones. The result is the growth of what has often been dubbed ‘bridge jewellery’, sitting between fashion designs and precious pieces. “Designers are merging high-end jewellery with fashion pieces, for example adding diamonds to existing silver pieces to try to make a price point that sits between the fashion brands and high-end jewellery,” he explains.

At Story by Kranz & Ziegler, a brand known for its wraparound charm bracelets and growing collection of trend-led silver jewellery, the design team has experimented with shape and textures – including filigree and brushed metals – with the shift in silver price enabling it to make statement pieces a focus in its latest collections, as it reportedly seeks to “say more with less”.

A CROWDED MARKET?
While the clear market leaders in the UK silver jewellery sector are the big bead brands and those fashion-led jewellery houses, the growing number of jewellery brands launching in the UK or making their debut from other countries continues.

Over the past year, the UK has welcomed an influx of silver coin brands, each offering its own point of difference but ultimately vying for a finite slice of the market. Meanwhile, the jewellery trade press has recently reported the launch of several new silver brands in the UK, including Endless Jewelry, Nona, Esoteric Luxury, Bill Skinner’s silver range and Jos Von Arx.

Darren Waite, UK sales manager for Story by Kranz & Ziegler, explains: “I would say that the market is as competitive as ever with both established and new brands vying for consumer’s hard earned money. With new coin concept brands emerging there is more choice than ever for consumers.”

When it comes to retail, there is also the question of presence and prominence. The establishment of shop-in-shop concepts as the norm for silver jewellery brands has each camp vying for precious window and interior space. “Brand presence in store is key,” Waite emphasises. “It is important to have impact and brands have recognised that it is about being seen in a retailer, not just being in a retailer.”

As a result, an increasing number of silver brands are getting creative when it comes to point of sale in store. “Brands change their POS material regularly to ensure that it looks fresh and appealing to a consumer, grabbing their attention as soon as they step foot in the door,” Waite explains. So it appears that being fresh, not only with design but also appearance, is a necessary part of a silver brand’s success today.

While it is impossible to forecast just how the silver price will fare in the coming months and years, Halliday-Stein says he is confident that silver prices in 10 to 20 years will be a lot higher than today. Bennett concurs, adding silver will remain popular even if the gold price also declines greatly.

For Smith at Links of London, the easing of the silver price has only been a positive step for the company. “Without the raw material fluctuations we have more freedom to create bigger volume, standout pieces at attractive price points alongside extra detailing on areas that customers really scrutinise, such as clasps,” she explains. “The stabilisation of silver has undoubtedly positively impacted Links of London.”

Cohen also confirms the price drop is helping to fuel creativity in the industry — no more will it be about playing it safe with classic designs. He notes: “This price drop will only increase the lengths designers will go to, to get the most that they can from silver.”

This feature was taken from the April issue of Professional Jeweller. To read the issue in full online, click here.

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