The silver jewellery market after the price boom

Ti Sento is focusing on sales of its silver lines this Christmas, offering retailers and end consumers the chance to win a weekend break in Amsterdam.

Price-sensitive brands get creative with less metal and more materials

The jewellery industry is starting to recover its balance after the shock of a tense year spent watching escalating silver price charts. The mission to promote silver as a luxury product in 2011 was successful, but Rachael Taylor revisits the market to discover what lasting effects the price spike has left on the silver jewellery business as we push into 2012.

Last year the jewellery industry was faced with what some at the time felt would be mission impossible: transforming consumers’ perception of silver jewellery from giftware fodder into luxury goods. Difficult, perhaps. Impossible, no.

The well-documented escalation of gold prices, as well as the steady rise of all costs of living, helped shoppers to understand why silver was also rising in price. But understanding and buying are two different things.

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In early 2011, once manufacturers decided that they could no longer hold out on passing on price increases, the focus quickly shifted from reducing margins to stay price competitive to promoting superior product qualities.

The race to add value to silver led to designers studding silver pieces with precious stones, including diamonds, adding extra plating finishes or creating new alloys – such as Fope’s silver-palladium mix Silverfope – to combat tarnishing, or simply creating large heavy pieces that would command such a price as to push the brand into the next echelon of luxury by default.

But over the first few months of the year the price of silver continued to spike, reaching a crescendo in late April before crashingdramatically in the first week of May. It then spent the rest of the year fluctuating wildly and ended the year pretty much on a price par with how it started it.

The price of silver has been steadily rising again in the first two months of 2012, although to nowhere near the peak levels of 2011, and while many in the industry are issuing a sigh of relief at the calming of the price, the fear factor that set in last year has affected the way that silver jewellery brands are designing.

Rather than seeking to add value to silver jewellery to justify its price, brands are working creatively to offer products that look chunky and impressive and worth splashing out on, but that actually use relatively little precious metal in relation to their size.

DO MORE WITH LESS
One method is to work with negative space to create the larger pieces that are popular in fashion jewellery but that are no longer realisable in silver due to costing. Yasmin Moss, creative director at Devon-based silver brand Kit Heath, says that this design process has allowed her to continue to create larger designs such as cuffs.

“We’ve been looking at several approaches and one is to work with current trends and looks but get the metal to spread by working with negative space,” she says. “Five years ago those chunks of metal didn’t matter but we have had to become more focused around the delivery of a sizeable look at a commercial price point.”

Two main areas that Moss is targeting with this approach are rings and wristwear as she believes trends are leading to chunky jewellery in these sectors. Necklaces are less of a concern, she says, as trends in this area are dictating “slim and pretty” designs conducive to rising metals prices.

Clogau Gold has introduced a new range of jewellery designed in collaboration with former royal harpist Clare Jones that includes slim necklaces that play with negative space at the centre to replicate a harp. The design of the Heart Strings jewellery means that the brand can offer a fashionable product but keep the price relatively low at £89.

Hot Diamonds is also pursuing this design avenue and at The Jewellery Show in February it showed off new line Shades of Spring that offers larger pieces but less metal by way of lattice work. The designs feature pendants, bangles and earrings that have large circular shapes that would at one point no doubt have been solid silver, but instead the centre of these circles feature a pretty floral design that uses much less metal than a solid drop would.

GEMSTONES TAKE THE WEIGHT
Another new silver collection unveiled by Hot Diamonds was Wild Roses, which again works to use less metal but rather than utilising negative space, it replaces what could be solid silver with a disc of Mother of Pearl or black onyx. This again gives a chunky look but with less metal.

A focus on gemstones as a way to reduce price points has also been a strategy at silver jewellery brand Missoma. A new launch for the brand is the Astra collection that puts gemstones at the fore of the design.

Gemstones have always been a passion of Missoma founder Marisa Hordern, but by letting them take centre stage it has also become a commercially savvy way to design. “I was worried it would be less design led, but simplicity sells,” says Hordern. “As long as you have a differentiating element, like our specially commissioned gemstone cut, then that becomes your signature look.”

MIX ‘N’ MATCH MATERIALS
Another approach that Moss is using at Kit Heath to offer larger designs with less metal is to focus on mixing in alternative materials. “The other way to do it is to take some of the metal out and replace it with other materials so that silver is a small part of the look,” she says. She lists cords, leathers, resins and plastics as just some of the materials that Kit Heath is toying with.

“You have to think on your feet and charge down avenues that you might not have gone down,” she says. “As long as the silver balance is there and they can see the value it’s fine, but the quality has to be there.”

Judith Lockwood (nee Wade) at silver jewellery brand Ti Sento says that introducing jewellery retailers to products with a diminishing amount of silver content has to be done in a softly-softly manner, but that as soon as they can understand the commercial power of silver jewellery with significantly lower price points it soon becomes a clear winner.

“We lead them very gently,” says Lockwood. “We introduced leather last summer and we sold it to about 45% of our network at that time but at the end of winter nearly every retailer in our network bought into it.”

After the success of leather, which has been used in products such as bangles, the brand is now introducing other materials to its silver ranges such as enamel and nylon, which Lockwood describes as offering a finish that is similar to Mother of Pearl
or tortoiseshell.

QUALITY ASSURANCE
Silver brand Muru has been more traditional with its choices of alternative materials – friendship bracelets made with colourful silk cord. However, this is the only line in Muru’s range that is not solid silver and founder Phil Barnes is keen that, whatever happens in regards to silver prices, his brand remains known first and foremost for quality solid silver designs.

“It has been harder to make key retail price points but we are sticking to our principles,” he says. “I know a lot of people have started to hollow out designs but we don’t.”

Rather than compromise on design and quality, Barnes says he would rather reduce his margin and keep designing at the same levels that he was working at before the price spike.

Likewise, at Babette Wasserman design will always come before price. “I always design what I want to, which is something beautiful,” says the brand’s eponymous founder Babette Wasserman.

Wasserman does note that retailers do like to buy in ranges that have RRPs of less than £100, and her brand has designs to cater to this end of the market, but she claims that the top end of her silver ranges, which command retail price points of up to £1,000, is doing equally as well and these high-end silver pieces are selling alongside gold and diamonds at luxury jewellers.

While brands are getting creative with the use of silver to stay competitive, Lockwood at Ti Sento maintains that in order to sell any type of silver through traditional jewellery shops, the quality has to be paramount. “Jewellers have a reputation of bringing their customers the best in the market and so the main reassurance we can give them [when selling silver jewellery] is the quality,” she says. “Our silver jewellery is crafted like gold, to the same standards. Our pave is set just like gold. We always encourage jewellers to whip the old loupe out when they look at it and they are always astounded.”

GOLD VERMEIL
While it is possible to offer silver crafted at the same standards as gold, it is becoming nearly impossible to offer larger fashion-forward pieces in actual gold, however as this has happened the yellow gold colour has come into fashion. The answer for many brands has been to offer gold vermeil options.

“The big trend for us is definitely gold-plated silver,” says Barnes at Muru. “We tried it three or four years ago, and it looked great, but it didn’t sell, but in the past year it has really started to sell through.”

On some of Muru’s lines gold vermeil is now outstripping plain silver. Barnes says that it is still the major cities that are buying in gold-plated silver, which is heavily plated with 3 microns of gold, in any sort of volume but he identifies it as a growth sector for him.

At Dower & Hall gold vermeil is a relatively new introduction and founder Diane Hall says that it has become “incredibly popular”. Its introduction was directly ignited by rising precious metals prices that made some of the brand’s existing lines impossible to sell at the new prices.

“Prices have been an issue for us and we’ve had to discontinue some lines,” says Hall. “We used to do 18ct gold and silver bracelet that was very popular at £2,000 then the same bracelet went to £4,000 [which priced it out of the self-purchase market]. We introduced our first gold vermeil range last summer and its been incredibly popular, although there has been a lot of resistance from the more traditional jewellers who would rather sell solid 18ct.”

Gold vermeil is similarly starting to sell through at Missoma, although the brand has likewise experienced some resistance from retailers. “There are still some traditional jewellers that are scared of it, and we never push it, but I’m now seeing people who have looked at it two or three times before coming to me wanting to buy it now,” explains Hordern.

An emerging trend in the silver jewellery market is to partially plate pieces with gold rather than full plate, with a particular leaning towards rose gold plating; Hot Diamonds and Pandora just two of the brands pushing such designs at The Jewellery Show last month.

Clogau Gold takes this trend one step further with solid rose gold accents designed into its silver jewellery, a combination that brand manager Sonia Menzes says is generating “big volumes” for the company.

WINNING PRICE POINTS
But regardless of idealistic preferences to keep design sacrosanct above commerciality, jewellery brands and retailers are in the business of making money and price points talk. To keep self-purchasing and gift shoppers interested, nearly all the brands interviewed named £200 as the magic number to keep RRPs below in order to retain these customer types.

Pandora has been a driving force in both these types of purchasing in the jewellery sector but even it is keen to stay competitive to hold onto that market share. While its charms have an average sale point of £31, it has recently reintroduced its £20 charm.

“We have to maintain our affordability – it is part of our brand ethos,” says UK president Peter Andersen. “The end consumer remains our primary focus, so we have reduced our margins to keep the prices affordable. We need to remain accessible, despite the rising price of the material.”

And accessibility is at the heart of the new silver jewellery market; be that accessible pricing, enticing designs or even just making silver feel more accessible to luxury jewellers by promoting high quality craftsmanship.

The silver market had a rude awakening last year that many were not prepared for, but as the landscape has changed and evolved for silver pricing and consumer spend, brands have knuckled down and devised creative ways to jump that pricing hurdle. It has certainly not been an easy time for silver jewellery sales, but it makes for an exciting time to be selling a product that is changing as fast as the pin point on the silver price chart.

 

This article was taken from the March issue of Professional Jeweller. To view a digital version of this issue online click here.

 

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