Mr Nielsen (pictured above) was at the helm of Endless for just two years, signing up 3500 partners in 31 countries, before he walked out on the company stating: “It is not out of anger or frustration, but merely a matter of realising that I am at my best, when at the end of the table, making the calls. This is where I create the most value for a company, and this is where I thrive.”
His new venture, Amazing Jewelry, aims to be as disruptive in the jewellery world as Zara, Primark and H&M have been in fashion.
His aim is to be the lowest price jeweller on the high street, with no items selling in an Amazing Jewelry store for more than £99. But Mr Nielsen believes he can still deliver exactly the same quality as competitors such as H Samuel, Goldsmiths and Beaverbrooks that are more than twice as expensive.
Amazing Jewelry will be a franchise operation, with retailers committing to opening concept stores no less than 30 square meters in size. Mr Nielsen wants all of these stores to be in the very best locations in city centres and shopping malls.
The first store, which is set to open in Copenhagen in June, is located on Strøget, the equivalent of Oxford Street in London. “We are opening with 256 square meters of space on the main shopping street of Copenhagen, right opposite Zara,” Mr Nielsen revealed to Professional Jeweller in an exclusive interview.
The concept store will offer around 4000 SKUs of jewellery, which Mr Nielsen promises will hit all the hottest fashion trends, including charm bracelets. The aim is to capture the millennial generation with a store that is more like a nightclub than a jeweller, he says.
The more important selling point will be price. Mr Nielsen believes he can sell the same jewellery at the same quality for around 70% of the price of rival jewellers on the same street. He believes brands such as Pandora are commanding massive profit margins at the expense of consumers; plus he is sure he can pass on the benefits of an exceptionally lean business model to Amazing Jewelry customers.
“Some of these brands are making 85% gross margins and 40% EBITDA (earnings before interest, taxes, depreciation and amortisation). If we operate on more like 10-12% margins, this will translate into prices 70% lower than our rivals, but the quality and style will be the same,” he predicts. “The same fine jewellery, the same silver and 18kt gold-plated pieces with the same stones,” he adds.
UK retailers will be courted to become franchisees. Mr Nielsen knows he will face resistance, particularly from retail partners of brands that want to retain the status quo. “This is going to be a guerrilla war. The rest of the market is not going to like what we are going to do,” he says.
The company wants to lower the cost of entry to start with Amazing Jewelry so that retailers that missed the Pandora boat can become franchisees. “They have to open with at least 30 square meters and to conform to the concept that we are rolling out, but the buy-in price will be as little as $100,000, and we will offer 36 months of financing,” he explains.
Mr Nielsen thinks that independent jewellers that aren’t already working with the likes of Pandora, Links of London, Swarovski and Thomas Sabo need to consider Amazing Jewelry as a last chance to fight back. “Swarovski, Pandora and Thomas Sabo are doing their own stores. If you are not on board you are in deep s**t,” he states.
The aim is to have 50 stores worldwide by the end of 2016, although up to half of them will be in Denmark, with the remainder split between the UK and Germany. Prospective UK partners are likely to be invited to the launch of the first concept store in Copenhagen.