Jewellery retailer Argento has gone from strength to strength since starting out as a single 100 square foot unit in Belfast. Joe Peskett caught up with chief executive officer Peter Boyle to discover how a major store redesign, brand buying strategy and ecommerce site has presented the company with an opportunity to dominate the multibrand market in the UK.
Several months have passed since Argento emerged from its £5 million nationwide project to refit and upgrade its stores. Since then, the Belfast-based multibrand jewellery retailer has enjoyed remarkable success as a direct result of its hefty investment. Not only has it increased its stores from an average of 350 square foot to 1,200, but it has seen an average sales boost of 30-40% in its shops since the new design format. In one store, sales are up nearly 50% — clear evidence that the firm’s move is paying off. But what exactly was involved in a refurb of this scale to achieve the impressive results that the retailer posted last month?
The whole process took about three years, starting with conversations with various design consultancies all over the UK to find the right look. The goal was to stand out in a multibrand retail environment — no mean feat. Studying other similar retailers in varying sectors, Argento realised all the fine details that could be tuned at its stores, for example colour themes, to forge a unique personal identity but maintain a rich brand offering. Speaking to Professional Jeweller, Argento chief executive officer and Hot 100 2016 Retail Star, Peter Boyle, noted how a white unit wasn’t going to cut it. “We’re very happy with our end result,” he shares. “Although you may come in and buy a different brand we hope that you’ll remember where you got it from. That’s important for us and we think we’ve achieved that.” After finding what it believed to be the winning formula and trialling it on a small, local scale, Argento then rolled out the new look across all of its UK sites.
Finding the next big brand
Argento may have had a facelift but its core strategy remains unchanged. As a multibrand retailer, the company is constantly on the look-out for the next big jewellery brands.
The jewellery retailer currently stocks a variety of leading brands including Nomination, Swarovski, Thomas Sabo. Boyle also owns several Pandora concept stores and is one of a small selection of stockist to be selling Olivia Burton’s recently launched jewellery offering.
Boyle admits though that it can be difficult to find ‘the next big thing’ in the current industry climate. He explains: “We’re in an in between stage at the moment, a lot of independent wholesale companies have gone bust so a lot of shows are weaker and not as good to go to.” Boyle adds: “We’re not taking as many chances in terms of just buying something that has no track record. There’s a lack of innovation through some of these independent wholesalers, so it does mean you look at it and wonder where the next big thing’s going to come from.”
According to Argento’s chief, ultimately, the sector has dwindled. He believes there’re simply not as many brand players coming up with fresh ideas. He comments: “Our aim is just to watch the market. We hope we’re in a position of strength as well. Our position has changed a bit in that people will come and offer us things and we’re likely to get offered things earlier than we’ve been offered before. The company’s always changed as necessary. We like to think we’re nimble on our feet. As an overall sector it’s very hard to predict.”
The firm recognises that finding the ‘next brand’ before competitors can give the business an opportunity in areas where those brands are absent, but admits that it is becoming increasingly difficult. “People are more alert now to new things and everyone’s keeping an eye on America and Asia and international shows. The market is much more alert to new things so the chances of you getting a head-start are much slimmer,” says Boyle.
The Argento boss appreciates that as a self-confessed fashion jewellery retailer he does not have his “hands tied to a set of rules like many traditional jewellers do”, but admits that being in partnership with multiple brands can be restrictive. “We don’t have as much control over our product as we’d like, if we were a single brand store it might be different, but that’s not the case. We have to talk to our brand partners who have a say in where we can operate sites,” comments Boyle.
All the same, Boyle is appreciative of Argento’s position in the market. He knows that the company holds a niche as a multibrand fashion jewellery retailer. “Generally, people are keen to buy gold and diamonds – they sell luxury and don’t want to sell fashion – which is great for me,” he remarks.
Plans to expand online
The right brands are essential to the success of a retailer like Argento. It is clear from the results of the refurb that presenting customers with an attractive store environment can produce impressive numbers. But the retailer acknowledges that an equally appealing and user-friendly ecommerce site is vitally important in this day and age. What’s more is that the same brands don’t always translate between physical stores and online and so different brands need to be stocked for different platforms.
Boyle states how when looking for new products it is important to differentiate between what will sell online and what may not be appropriate to stores. It is partly this selective choosing and a streamlined, attractive website that has meant Argento’s ecommerce side has become a central driver of the business’s overall profits. He comments: “We saw good numbers over Christmas and certainly January was very successful. We saw almost 25% growth in January alone. We’re doing a lot of export too, and not just Pandora, but a few new things we’ve taken on too. Our Pandora business is up about 6% and other products are doing well.” In 2016 Argento opened a flagship Pandora store in Belfast’s Commarket. The company had set its sights on opening a Pandora megastore in the city for some time, and was proud to sign a ten year lease last summer.
Looking ahead, Argento wants to expand its online and social media presence and considers this to be a top priority in the next five years.
So, where next?
Following on from the success of its ecommerce strategy and refit project, where does Argento turn next? A natural move would be to secure more sites across the UK. Boyle reveals that “three or four” new stores are on the cards for this year, but equally, three or four underperforming ones may close. He says: “We’re in the process now of deciding whether we go forward and open more stores. We’re evaluating the number of sites and we’ve done a few testers where we’re reasonably happy with the results. We’re not confident enough to say we’re going to roll out 100 stores, we’re certainly not. We’ll just have to fit in where we can.”
Boyle reveals Argento’s intent to try and cluster stores in areas but goes on to say that this will be limited. The concern is that the company’s successful Northern Ireland retail model might not translate to many potential sites in the rest of the UK where retail rents are much higher — more than double, Boyle claims. With rates set to be revaluated later on in the year, many jewellery retailers are holding fire on expanding their sites until there is more clarity and certainty about the future. Another factor for reigning in any of Argento’s plans for rapid expansion is the concern that strong independents and rival multibrand retailers with a good brand offering will block the firm going into many areas. Boyle cites boutique.Goldsmiths and members of the Company of Master Jewellers as the prime competition limiting the number of prospective sites for Argento in many areas. However, the Belfast retailer is in no rush to mushroom its sites.
Boyle comments: “With ecommerce now, we don’t have to be in every town. And with rents as they are at the moment, that’s why we haven’t gone off and opened 50 Argento stores in every prime location.”
For now then, it seems Argento is in a strong position. It continues to keenly watch the market for new brands and earmark new sites in England, Scotland and Wales. But it won’t over commit itself whilst rents and multibrand retail competition remain an obstacle.
Where though, would Boyle like to see the business in five years time? Boyle reveals what is both an exciting and frightening prospect: “In five years we’ll have to come up with another redesign of the store. We got one right but it only does you for about five years, we’ll have to come up with another revised concept.”
A greater online presence is desirable but Boyle notes how the number of stores are less important if the climate is not favourable, perhaps hinting at a greater digitisation of the retailer. It would appear then, that Argento’s potential for growth is significant, and considering it started out with a humble 100 square foot shop, it certainly has a track record of being able to translate ambition into cold hard cash.
This feature first appeared in the Feb 2017 issue of Professional Jeweller. Read more here.