Managing director Sandford Simpson talks Hot Diamonds and Emozioni.
HD Group managing director Sanford Simpson is busy enjoying the success of his Hot Diamonds and Emozioni brands, but instead of resting on his laurels, he’s on a mission to grow the business to even greater Heights. Professional Jeweller discusses sales growth, international markets and travel retail opportunities with the man himself.
Professional Jeweller: After stepping back from the business for a few years, you returned to HD Group in 2011 — how have things developed in the period since?
Sanford Simpson: When I came back in to the business three years ago things were incredibly tough. The company was headed in the wrong direction fast and it was clear we needed to make radical changes quickly. I appointed a new management team and we moved quickly to develop a new way of working and implement a new strategic plan. Thankfully, now we are back to being a healthy and profitable company again. We are full of passion and excited to be in a position to realise our potential over the next few years and beyond.
In the past 12 months UK sales have grown strongly across all channels, helped greatly by the launch of Emozioni in April 2013. We have also expanded our international business very successfully. To quantify this, our international sales are up by 93%, driven by successful rollouts in the USA and Australia, in addition to steady growth from the majority of our existing retail partners.
PJ: You announced earlier this year that you have plans to open HD franchise stores – can you tell us when these will start opening, or more about your roll-out plans?
SS: We have been discussing the franchise project with a handful of interested parties, some of whom are existing retailers of Hot Diamonds and/or Emozioni. We intend to make more progress this year and will keep all of our retail partners updated once we have more news.
PJ: Emozioni is more than a year old and has experienced strong growth, bolstered by positive sales through The CMJ in 2013. Where is the range positioned currently and what’s next?
SS: Our Emozioni sales have far exceeded our expectations and budgets. Retailers are reporting very strong sellthrough and we’re adding numerous new doors week-by-week. Emozioni is sold in circa 350 doors in the UK and is growing at an extraordinary rate. The trick will be to realise the huge potential of this brand, which is a key focus for us in the coming years. In the last few weeks we have launched our Emozioni wristwear category.
This is a range of on-trend bangles and bracelets onto which you can interchange the 25mm Emozioni coins. This category has hit the ground running and I’m afraid to say we ran out of stock within two weeks of the launch, as healthy replenishment orders started coming in right away. In fact, our stocks have just recovered to reasonable levels. In September we will be adding an earring category to the collection as well as more yellow gold [plated] chains and additional coin designs.
PJ: What is the USP that sets Emozioni apart from the other interchangeable brands that currently exist in the UK market?
SS: We have a unique customer conversion strategy – “buy any keeper and any chain and get your first coin (worth up to £50) for free”. This initiative is funded by Hot Diamonds, not the retailer. We also have a unique customer retention strategy. Consumers receive a loyalty booklet with their first order and once they’ve collected all of the coins they need to, they are gifted another keeper and jewellery box for free, so they can start their next collection all over again.This offer is half-funded by Hot Diamonds and half-funded by the retailer. In addition, our jewellery box, which is gifted to each customer when they place their first order, also encourages collectability as it has empty recesses waiting to be filled by future coins.
The collectable brands that have come before Emozioni have been largely inspired by nostalgia. The consumer wears memories of precious moments around their wrist, for example. When creating Emozioni, we decided it was time for a change. The nostalgia area of the market is well supplied and has a clear dominant player. Instead, Emozioni is a celebration of self-expression, fashion and ‘living in the moment’. You will never find an 18th birthday or graduation coin in the Emozioni collection. That’s been done and there’s [already] a huge market for it. However, Emozioni is about creating memories rather than celebrating them. It’s nice to be doing things differently.
PJ: What can we expect next from Hot Diamonds – would you ever move into 9ct or fine jewellery, especially considering the drop in gold price?
SS: We can sense average spend creeping up albeit marginally, and silver has come down in price. This gives us the opportunity to explore more generous, beautiful organic shapes with Hot Diamonds, and this motif forms the core of our AW14 inspiration.
We are also introducing some yellowgold this AW14 as we expect this to start showing strongly in the near future. We are thrilled with the positivity with which retailers have responded to our latest collections.
PJ: Which designs are proving bestsellers in the Hot Diamonds range at present?
SS: Our core shapes such as hearts, flowers and stars still perform very strongly for us, but we are noticing an increasing appetite for slightly more venturesome and organic shapes.
PJ: Retailers have told us that Hot Diamonds sells very well to male customers buying gifts – why do you think this is?
SS: Men love gifting the classic Hot Diamonds designs, as they are so wearable. They are confident the recipient will wear the design again and again, and the luxurious packaging completes the story and makes Hot Diamonds a wonderful gift. Of course, the real diamond in every design is a fabulous story that always resonates with male customers.
PJ: HD Group has retail presences in the US, Canada, Europe and Australia – how are these international markets faring and do you have plans to build them further in the coming months?
SS: Our international business is our fastest-growing channel and yearon- year sales are up 93% in the past 12 months. We fully intend to further develop all existing territories and will launch in Italy, Spain and Portugal during the autumn-winter months.
PJ: Many brands are achieving success in the travel retail market – has the HD Group experienced any gains in this area?
SS: Emozioni is performing very well with in-flight magazines. The brand has recently been re-listed by Virgin Atlantic and Swiss Air. It has also just launched on Lufthansa and various other airlines.
PJ: Finally, regarding trade shows, where do you plan to show in the next 12 months and are there any new markets you are targeting?
SS: We are attending The Company of Master Jewellers’ show in August and International Jewellery London at Olympia. We will also take part in Jewellery & Watch Birmingham in 2015. In relation to new markets, let’s see where opportunities arise, but we have an eye on Germany and Japan for our next launches following what we hope will be successful launches in Italy, Spain and Portugal in 2014.
To see this interview in its original format read the August 2014 issue of Professional Jeweller, here.