THE BIG INTERVIEW: Hamilton & Inches on driving profitable growth in the upmarket jewellery sector

When Hamilton & Inches celebrated its 150th anniversary 18 months ago, the team commemorated the year with limited edition products, exclusive events, and a visit from Her Majesty the Queen and the Duke of Edinburgh.

Furthermore, the jeweller saw a 331% surge in profits from £217,525 in 2016, to £938,003 during the landmark year.

It really was a year to remember, but as much as it was a reflection on the success of times gone by, it was also a launch pad for the future of Hamilton & Inches.

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Here, chief executive officer, Stephen Paterson, talks to Professional Jeweller about future-proofing the business, attracting the next generation, and standing out in a competitive retail landscape.

Professional Jeweller: How has business been for Hamilton & Inches this year?

Stephen Paterson: It’s been very positive. 18 months ago we were celebrating our 150th anniversary. It was a fantastic year and we all wondered how the following year would go, but that’s also been very, very strong. We’ve probably had our two best years ever in terms of profitability and sales and we are reinvesting that back into the business and into our craftsmen and women.

There’s a lot of focus, like most jewellers, on the Asian market. We are lucky enough to have a lot of overseas visitors coming in. We are also trying to make sure the business is really focused on being a good British business, as we are a British jeweller.

PJ: It sounds like Hamilton & Inches is going from strength to strength. Without giving too much away, what are you doing to stay profitable?

SP: I appreciate, for example, the diamond market now is very competitive, especially with online sales and so on. A lot of retailers and traditional jewellers find it very difficult to compete with the online market, so we set up a strategy some time ago to try to differentiate what we offer in terms of product, service and experience. I appreciate diamonds are still the most popular gemstone, but we are trying to stock and source some really good coloured stones, from sapphires and emeralds, to some of the more obscure stones and really rare pieces.

One of my quotes is, there are lots of businesses that sell jewellery, but there are fewer jewellers. It is all about being a professional jeweller to somebody, similar to years ago, when somebody would ask, who’s your tailor? Who’s your doctor? Who’s your jeweller? I suppose by endorsing that, it is all about trust. We do think of ourselves as a jeweller, with all the crafts on-site, coupled with fantastic partnerships with top watch brands like Patek Philippe and Rolex.

And we are also making more and more pieces in-house. We are very lucky to be able to do that. Obviously we have the showroom, but as you know, we have jewellery, silver and watch workshops on-site. We are doing a lot for the whisky companies these days too. If you can imagine, the whisky companies are all producing fabulous, rare, 25-40 year old whiskies, and they are coming to us to help adorn the bottles with our silverwork. And they are delighted because the whisky is from Scotland and the silverwork is being done in the centre of Scotland. So they are very complementary.

PJ: How do you encourage millennials and the younger generation of consumers to commit to having a local ‘go-to’ jeweller?

SP: There are two types of millennial customers. Firstly, there are those who are the sons and daughters of existing customers, who have been introduced to the company very young. I personally have been here for 39 years. It makes me feel quite old when the grandchildren of customers come in. Funnily enough you mention generations, our promotional campaign and advertising has been ‘jewellers for generations’ and that’s really rewarding. That’s based on trust and confidence, so the pressure is on to deliver.

Secondly, in regards to those who don’t know us, it is quite difficult. We are trying to make ourselves a little bit more approachable in the way we present ourselves. The campaign I just mentioned, is all about family. We are very lucky to be in the top end of the jewellery industry, and it is quite easy to do a predictable shot of a fancy diamond necklace worth six figures, with matching earrings, but what we are trying to do is to actually introduce respectable humour, and people having fun. Therefore, instead of having a predictable shot, we have young folk wearing our silver necklaces and pendants, which are £70 upwards, and trying to say to that age group ‘come in, there is plenty for you and you don’t have to spend a fortune’.

Selling high priced items is wonderful, but one thing that gives me a great satisfaction is when a young person has a budget of say £70-£80 for their friend’s 18th or 21st, and they end up with a wonderful piece, and they have a wonderful experience, and they go out with their H&I bag, and gift wrap, as if it was something that was six figures.

The difficulty of course is getting people in to experience that and so much is done online now, that we are up against that. I suppose it is trying to say to that age group it is not just about the purchase and the price, it is all about the experience, and, more importantly, the back-up — just in case there is anything wrong or you have questions.

PJ: What’s the main focus for Hamilton & Inches at the moment?

SP: We are currently putting a lovely selection of pieces together, in terms of our own-made pieces. We have been buying very nice loose stones at trade shows and bringing them back for our goldsmiths to be inspired by upstairs. The other very exciting thing we have of course is Scottish Gold.

We have a 50/50 first refusal on the gold that is coming out of the Cononish mine on the Highlands at the moment and we are working on some nice pieces which we haven’t promoted yet, but we have existing customers who we have told about the Scottish Gold that already commissioned a number of pieces. And it is fabulous. When I heard about the Scottish Gold, the refiners were asking whether we wanted it in 18ct or 9ct, and what colours of gold do we want, and I said I want it in yellow and 22ct gold so it is as pure as possible.

That brings its own challenges in regards to stone setting and so on but I wanted to keep it as pure as possible. You can imagine how that is attracting the emotions of our customers. So that is something we are working on during the lead up to Christmas. We have some fantastic watches coming in and some very nice pieces of silver as well, which I suppose is our unique selling point here — our silver workshops and the amount of silver we have in the shops.

We are trying to invest and build for the future. I mentioned our 150th year, and that was not just a celebration of the past but certainly a launch pad for the future as well. On our website and in our brochure we make reference to our history, but the priority is to focus on the next 150 years of Hamilton & Inches. Especially with the crafts people we have who can offer a certain level of service to our customers.

PJ: As a company you are known for supporting the wider trade, what are some of the ways you back British made and the next generation of jewellers?

SP: It is good to support home-grown talent as well as to nurture our own talented team. We have some young trainees and apprentices that are doing really well. One of which is our goldsmith, Anita Fodor, who has been working alongside our master jeweller, Chay McClory, and she has been doing wonderful things — manufacturing and designing.

She won a Bronze Award in the Jewellery Design category at the Goldsmiths Craft and Design Council Awards this year. She is also mentoring a trainee jeweller, so we have three young jewellers on the bench. We also have a formal relationship with the University of Edinburgh and the Edinburgh College of Art. For the last five years we have had two students in for a nine week paid internship with our silversmiths with a prize at the end of it.

They come at the end of third year and it gives them a little bit of insight into the commercial side, rather than simply the designing and making of silver and jewellery. Out of our 40 staff, 14 are craftsmen and women, creating a wonderfully talented team. The way we are trying to support talent is to save British talent by ensuring the skills learned by master craftsmen are handed down to the next generation.

PJ: Why is that important to you and your business?

SP: It is primarily so that we can offer a high level of service. Quite a lot of our craftsmen are approaching retirement age, and some are in the second stage of their careers. We want them to be here to pass their skills onto the next generation, along with the Hamilton & Inches standard and, level of quality. In many ways we are actually looking after the future, rather than just looking at now.

PJ: Edinburgh as a city has a lot of jewellers, how do you stand out from competition?

SP: There are quite a few, we’ve had some pretty steady competition for quite a few years now. But, what do we do differently? I think it’s just keeping the bar at a certain level. It is having standards and never letting those standards slip. People are very educated and they know what’s what, and we have to be the ultimate quality control for them. It is really just keeping the standards up. Whether in manufacturing, the quality of gemstones, or how we present something, we are trying to promote the fact we have so much expertise here.

PJ: Do you have any plans to expand?

SP: This question has come up many times. Four of us did a management buyout of the business 20 years ago, and my three colleagues who were with me at that time have since gone on to do other things. Three years later we opened a shop in Beauchamp Place down in Knightsbridge. We branded it as Hamilton & Inches and we continued to trade it but obviously competition there was very, very high. We had a unique product in our silver but in order to keep a business like that going in that location you have to have a high turnover.

Furthermore, because the actual interior of the showroom here in Edinburgh is quite iconic, it is difficult to replicate that elsewhere. So some people who knew the shop in Edinburgh would take their friends to the London shop and wondered what was special about it. But when they come to the theatre that is 87 George Street, it is quite different. So it is very difficult to replicate the shopping experience elsewhere.

When Harvey Nichols opened in Edinburgh we had a small concession there for three years, and again the experience people were looking for wasn’t quite the same. So I suppose we have dipped our toe in those waters but one thing we are trying to do is get across the fact that we are a destination store, with all the fabulous products we have and the shopping experience. So never say never, but at the moment we are concentrating on 87 George Street.

PJ: What does the future look like for the jewellery industry in Scotland?

SP: It has a positive future. I think that the way forward is through jewellers trying to differentiate themselves. There is a very predictable set up if you are starting a jewellers today, and that would be to find a shop and fill it full of brands, but I do find that could mean that the individual jeweller loses its individuality in many ways. I do think any jeweller opening up in the future should try and put their own mark on the way they present themselves.

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