Founder and chief executive officer of Carat*, Scott Thompson, talks Baselworld, consolidating existing doors, targeting a younger ‘millennial’ consumer and building a European customer base, all while refurbishing the brand’s UK presence and growing in Harrods. It’s all in a day’s work…
To say that luxury fashion jewellery brand Carat* had a ‘good’ 2014 is an understatement. Instead, the word ‘staggering’ springs to mind, especially when the all-important numbers are factored in to the equation.
300% year-on-year growth — that was the figure quoted by Wes Suter of Northampton- based retailer Steffans in April when asked how Carat* was performing in his stores. Later, in August, Carat* revealed it was to move into 19 further locations in Asia, including Hong Kong and Bangkok, a figure swiftly followed by five — the number of shop-in-shops opened by the brand at International Jewellery London in September.
By January 2015, the brand had secured 40 new doors and increased its sales in the three month period ending December 2014 by 60%. With such a positive start to the New Year, it’s no surprise that the brand has continued in the same vein in recent months, with founder and chief executive officer Scott Thompson sharing his optimism with Professional Jeweller.
Splitting his time between Hong Kong and London, Thompson is now focused on consolidating his brand’s existing doors, targeting a younger ‘millennial’ consumer and renovating the portfolio of UK stores. Read on to find out more…
Professional Jeweller: Carat* had an impressive stand at Baselworld — was the show successful and what markets were you targeting in particular?
Scott Thompson: Baselworld was crazy and I even ran out of business cards by the ropean market and we got interest from all over including Spain, Czech Republic, Germany and France, plus from the United States, the Caribbean and Dubai, so that was really good. I think jewellery nowadays is not very location specific; it’s global. The next step is turning all of this into business, but I would be very surprised if we haven’t opened at least 100 doors from the show by the end of the year.
PJ: How does the brand’s presence in the UK compare to its European presence?
ST: We have around 190 stockists in the UK and Ireland, but in Europe we don’t have anything in particular. Now we are just trying to make sure that we can look after the [doors] we’ve already got. It’s all very well opening doors, but we’ve got to take care of them too. Managing our accounts, keeping everybody happy and keeping collections fresh is our priority.
PJ: What has been your focus since the start of 2015?
ST: At the end of last year we launched three new core collections — a twist on our older ranges. Although the older stuff got us into our basic business, this [the new ranges, Millennium, Heroines and Nightingale] is getting us into what we see as the ‘fashionisation’ of jewellery. Our plan is to change things twice a year, in a fairly serious way, to keep things fresh.
You can’t just rest — there’s no such thing as resting on your laurels in this business. Otherwise customers and your wholesale accounts get bored, so we are trying to push the envelope. Jewellery right now is less about traditional pendants and earrings; it’s about double finger rings, arm and ear cuffs and something that pushes the limits a little bit.
PJ: How successful have the three new collections – Millennium, Heroines and Nightingale – been and what was the vision behind them?
ST: I decided last year that I wanted to reach out to a slightly different audience, because generally Carat* has been a little bit older. We wanted to sell not just to mum but to her daughter too. Contemporary jewellery was a focus and we spent a lot of time developing 150 new styles for the brand. The beautifully hand-cut basics that we do are great, but we knew it was time to get in to the fresh stuff that is happening from a fashion point-of-view.
We are dressing people like Rita Ora, Lily Allen and Ellie Goulding and honestly they are going to get bored if we keep just giving them cocktail rings. They want ear cuffs, palm cuffs and armour rings – things that will make them stand out.
PJ: Could this new design direction impact the loyal, core customer you’ve already worked hard to establish?
ST: I don’t want to alienate our old customers, because we still do offer all of our classic designs. But the new collections have helped us reach a younger, customer who’s looking for new things all the time. We are continually developing the brand with around 300 to 400 new products annually and we have a sizeable design team. This year, we are launching some cool new customisable bracelets.
PJ: Can you tell us anything else about this new bracelet line?
ST: We’ve been playing with the concept for six or seven months now and we’ve got it to a place where it’s probably ready to go. We hope to launch by the late summer or around International Jewellery London time. The cool thing about our business is that we try things out in our retail stores before we start pushing things out to our wholesale accounts. We do the experiments on our side so we don’t lumber our customers with products that may or may not work.
PJ: What about your standalone stores in the UK, how are they fairing in 2015?
ST: We are in the process of renovating all of our shops, including Covent Garden and Canary Wharf in London. We are also in talks now for one, but perhaps two, more Central London locations.
PJ: Is London your strongest regional market?
ST: It’s a bit of a mixed bag, but it definitely cements us in the business. Wholesale alone doesn’t float the boat; the touchstone for the brand and the brand’s presence is created by these ex- periential shops. In Harrods, for example, we are building a new shop-inshop downstairs. Right now, we do very well in Harrods in their existing format, but they’ve asked us to build our own shop within the store based on how we want it to look.
PJ: What was the catalyst for renovating the existing stores and shop-in-shops?
ST: It’s been way overdue for far too long. We invested lots into building all the shops out in Hong Kong, Shanghai and Beijing and they are all stunning, but we had to wait for leases to be renegotiated and other situations to evolve (in the UK), but now we’re ready. We’ve got a beautiful new concept and no two shops are the same — that’s the general philosophy. I am a retailer traditionally and I think shops are like the theatres of the jewellery business; the stage where you can show everything a brand is about.
For the past 10 years, I’ve always said that cookie-cutter shops are dead. If you go to a shop in Hong Kong or London, they should all be a little bit different, perhaps using slightly different floors or wall features. The DNA is there, but the cookie-cutter mould isn’t. We don’t use bog standard furniture, which we glue together like Lego. We look at each location for its own unique attributes.
PJ: What sort of investment has been made into the shop-in-shop side of the business?
ST: We’ve probably spent around £250,000 over the past two years installing shop-in-shops in a few more of our existing wholesale accounts, including one in Dublin [Arnotts department store] and Selfridges in Manchester. More and more wholesale accounts are beginning to ask for furniture, after all the brand is more than just the logo and some jewellery. There are lots of other features to it and I think the furniture and shop-inshops are hugely important.
PJ: How has Carat* built on its online presence in the last 12 months?
ST: UK business is strong [online], but we also sell a lot all over the world. We have two e-commerce teams, we have one in London and we have one based in the Hong Kong office, which deals with international customers. The UK is 40% of our e-commerce business, but we ship more to the United States than we do within the UK, so I think there is still huge potential for us. We are actually rebuilding our platform this year and hope to launch it before the summer.
PJ: Is travel retail a growing area of business for you in 2015?
ST: We think travel retail has huge possibilities for us. We’ve been doing travel retail for Harrods [in its airport stores] for some time and we’ve just signed up DFS in Asia [a worldwide network of luxury duty free stores], where we’ve opened in six locations.
PJ: In terms of your marketing spend for 2015, are there any specific messages you’re keen to communicate?
ST: We spent more than £1 million on marketing last year, but we will definitely be moving more digital. We already spend half of our marketing budget on digital and we’ve busted through 300,000 Facebook users now, so that’s a very interesting channel for us. We can be very specific [with Facebook] and we can geo-locate [our customers], geo-target ads and see the responses we get for certain products.
PJ: What are your plans for the rest of 2015 and beyond?
ST: I want to have a longer holiday! We are in three countries, with 190 staff and as we’re growing we have the whole ‘storming and forming’ stuff going on. I’m also considering stepping down as chief executive officer to focus on being [the brand’s] creative director because that is the part I love the most. I might be looking for a CEO to take over the company and drive it to the next level. There are a few things I want to sort out myself personally, but probably by the end of this year or early next year I will be ready to do that.
This feature originally appeared in the June 2015 issue of Professional Jeweller, read the issue online here.