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RETAIL REPORT: How are the nation’s biggest jewellers performing?

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In Professional Jeweller’s debut state of the nation report the editorial team has compiled figures for each of the top ten jewellery retailer businesses operating in the UK.

In the United Kingdom the public can access the financial reports of the jewellery industry’s major players, enabling Professional Jeweller to gather a transparent overview of how well the nation’s retail giants are really performing under the pressures of today’s more difficult high street.

Reporting periods may vary, but the majority of the ten businesses in this study have published accounts ending in the first quarter of 2018. We have indicated where the accounts are for the 2017 financial year.

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In the most recent financial year, total sales for the ten largest retail jewellery and watch groups increased by 6.5% from £1.68 billion in 2016-17 to £1.79 billion in 2017-18. Despite challenging trading conditions, the majority of the top ten retailers reported growth for this financial year, albeit some being bigger than others.

Almost every company has grown considerably since the turn of the decade, but the graphs do tell a tale of retailers etching into tougher times.

Without further ado, we present the nation’s top ten jewellery retail businesses operating in the UK…

1. The Watches of Switzerland Group
The Watches of Switzerland Group has reported sales surging by 21.2% to £685.2 million for the financial year ended April 30, 2018. The group overtook Signet to become the UK’s largest multi-store operator last year, and pushed into the North American market with the acquisition of Mayors in Florida and Atlanta in October.

The American business has been key to the group’s growth in the past 12 months, with pro forma net sales rising 9.9% across the pond while UK sales rose by 5.2%.

In the UK the Group, formerly known as Aurum Holdings, owns Goldsmiths, Mappin & Webb, Watchshop, The Watch Lab and Watches of Switzerland, but a shift towards luxury has seen the business heavily reduce Goldsmiths’ footprint. Today luxury watches account for 72% of group sales.

During the financial year jewellery sales increased by 7%, although it is not clear how much of this came from the American operation.
When it comes to jewellery, Watches of Switzerland focuses on bespoke and exclusive jewels — with the group’s CEO revealing the two most important jewellery brands are Goldsmiths and Mappin & Webb, with the businesses investing heavily in the latter to position it as a “great luxury heritage brand”.

To complement its own jewellery pieces and luxury watches, the group also works with brands such as Fope and Messika, which it attempts to get regional exclusivity for.

2. Signet Jewellers
Signet Jewelers’ British operations comprising Ernest Jones and H.Samuel has been a remarkably consistent performer over the years, with turnover from the two national chains rising and falling in a relatively narrow range between £433 million and £489 million.

The latest full year, which ended January 31, 2018, saw sales dip by 3.6% to £472 million, still the second highest return for the group since 2011.

Although sales at H. Samuel have dropped by a little more than those of Ernest Jones, the performance is arguably more impressive because the volume end of the market where H. Samuel sits has been so testing across branded goods.

In the latest financial results, jewellery accounted for 66% of sales.. Within the firm’s quarterly reports, Signet more often than not states that higher sales in prestige watches have been offset by lower sales in diamond jewellery and fashion watches.

Both retail establishments stock a variety of accessible jewellery brands alongside diamond goods. Brands at H Samuel include Buckley London, Guess, and Clogau, while Ernest Jones stocks the likes of Links of London, Olivia Burton and Swarovski.

Signet Jewelers, which is publicly traded on the New York Stock Exchange, publishes UK turnover in pounds but operating profit in dollars.

That operating profit for FY2018 dropped by 27.4% to $33.1 million (£24.9m). The UK business closed seven stores in 2017-18 and opened three.

3. Beaverbrooks
Beaverbrooks, which is celebrating 100 years in business in 2019, broke through a two year plateau for sales in the financial year ended March 2018 as turnover rose by 6.2% to £126.5million. The growth followed two years when sales remained the same for the 2016 and 2017 financial years at £119m. Operating profit was unchanged at £13m.

Beaverbrooks attributes its success to a remained focus on high quality diamonds, fine jewellery and watches, and excellent customer service.

During the year, the family-run firm continued its shift towards luxury watch brands and developed the bridal side of its business to ensure a balanced product offering.

The national jeweller also continued with its programme of investment during the period. This includes the refurbishment of key retail stores and development of its website. The company also significantly invested in its people.

The retailer’s chairman, Mark Adlestone, comments: “We’ve just had the four most profitable years in our history which we’re delighted with.

“However, success at Beaverbrooks is not only measured in financial terms. A strong commitment to the learning and development of all our people, an open and honest company culture and commitment to the wider community in which we work, are all borne out in the many accolades awarded to the company during this period.”

As part of its mission to ‘enrich lives,’ the company donates 20% of retained profits to charity and has this year donated £1.11m to charity.

4. Warren James
Warren James, the national jeweller which prides itself on offering quality jewels at affordable prices, maintained its retail momentum with a modest rise in sales for the year ending March 31, 2018.

The company recorded a 0.5% improvement in revenue versus the £117.2m it posted in 2016-17, which was at the time a 16% increase on the prior financial year.

Operating profit slipped slightly from £42.5m in 2017 to £40.3m in 2018, while net profit fell from £33.8m to £32.2m over the same period.

Managing director, John Coulter, who founded the company in 1979, says trading conditions on the high street were “challenging” during these 12 months, but the company’s “unique and unrivalled retail offer of stunning jewellery at outstanding prices” has continued to grow in popularity and win the hearts of British consumers.

In the financial year Warren James continued to invest in staff, which the company attributes to its success.

Looking ahead, the directors revealed they will closely be monitoring the uncertainty of the movement in precious metals and currency fluctuations, together with risk of the loss of suppliers as a result of the current economic climate.

2019 marks 40 years in business for Warren James, which currently has 220 showrooms in the UK. The company’s stores stock a variety of fine and fashion jewellery.

5. Fraser Hart
Fraser Hart is working through a nationwide upgrade programme for its key stores, a process that helped sales rise by 2.5% to £82.9 million in the financial year ended June, 2018.

According to accounts filed with Companies House, operating profit dropped by 35% to just under £3 million during this financial year, while overall the jeweller’s profits for the year dipped slightly to £1.2m.

Fraser Hart has been revamping key flagship stores including London shopping centre showrooms at Brent Cross and Westfield Stratford, which have been anchored on a desire to put jewellery back in the spotlight.

Fraser Hart admits, like many jewellers in the UK, that it went through a period of watches dominating its stores, but now it’s re-balancing its product offer so that jewellery and watches work together to complement one another.

Fraser Hart’s retail director, Richard Parsons, tells us that the transformed Brent Cross boutique has already resulted in an increase in jewellery sales, and has bolstered business even more than the company expected.

Alongside promoting bridal and diamond jewellery, the upgraded stores have also made room for new brands including Chimento, Marco Bicego, and Chopard, which have been performing well.

For the future the company strategy remains to grow the business through investing in stores in the UK and Ireland and, under its ‘People First’ banner, in its people through the reward, recognition and learning structures that form the building blocks of the firm’s success.

6. Bucherer
The company formerly known as The Watch Gallery (and DM London before that) is now wholly owned by Swiss luxury jewellery and watch giant Bucherer. The business was acquired in March 2017 for an undisclosed price, and began trading under the Bucherer banner from October.

Prior to the acquisition being announced, the 2016-17 financial year was already exceptional with sales increasing by 34% to £73.7 million and operating profit increasing by 148% to £5.65 million. The business could hardly have been better placed to take advantage of the flood of high-spending tourists who hit London after Brexit crashed the pound.

The 2017 accounts that run up to December 31 of that year are reported as an 11 month period by The Watch Gallery, with sales of £77 million, and for a nine month period as Bucherer Holding Ltd with sales of £67 million. With sales of around £5 million per month, the full year would be £83 million, potentially overtaking Fraser Hart in our top 10.

During this financial year Bucherer popped up in Selfridges with a dedicated fine jewellery boutique. Following the success, the company committed to a permanent home inside the luxury department store’s Wonder Room in June.

Since this financial year Bucherer has also opened its largest ever store in the UK at London’s West End Westfield shopping centre. The showroom was previously a smaller outlet for The Watch Gallery. It is now double the size.

7. Boodles
Sales at family-owned Boodles topped £70 million for the first time during the financial year ending February 2018, an incredible achievement for a business which battles with branded giants in Bond Street and stocks only its own jewellery designs alongside Patek Phillippe watches.

The retailer’s strength lies in serving British entrepreneurs, which it does so incredibly well at its nine showrooms across the UK, while sales exported overseas made up around one-third of the group’s turnover during this financial year.

The company’s most recent opening in Manchester sets a new benchmark for luxury in the city, while its London showrooms in Bond Street, Sloane Street and Harrods are institutions attracting customers from all over the world.

Operating profit was down by 36% in the financial year, which the company’s managing director, Michael Wainwright, says is due to a “slightly more difficult trading environment” and an exceptional cost of £930,000 relating to ending a venture between Boodles and Grosvenor House Hotel. He also revealed that a rents and rates review for London stores had doubled those costs for the business.

Rent and rates reviews take place every five years, and the managing director is confident that the current financial year will see a return to operating profits above £10 million that the business achieved in 2015-16 and 2016-17 financial years.

2018 marked 220 years in business for the family-run luxury jeweller.

8. F.Hinds

F. Hinds was voted the UK’s best ‘Multiple Fashion Jewellery Retailer of the Year’ at the 2018 Professional Jeweller Awards, and the financial results confirms the strength of the business, which has 118 stores across the UK and has just saved 12 Chapelle boutiques from administration and acquired the discounted jeweller’s website.

The high street jeweller continues to maintain its retail momentum, even during what the company describes as an “increasingly challenging” environment.

Operating profits for the year posted a small growth to £3.16m, while turnover rose from £61.43m to £62.07m in the 12 months.

Company secretary Stephen Cornwall says that branded goods continue to perform well, but non-branded products, if sold at the right price, have been a success too.

During the year F. Hinds closed two branches, with high rates and rent costs playing a part in those decisions.

Over the next 12 months F Hinds will continue its strategy to open new stores in locations where it believes there is an opportunity to generate profit and an emphasis remains on refurbishing stores to make them more appealing. F. Hinds stores are typically based in town and regional shopping centres, as well as traditional high street locations.

The jewellery firm will also focus on its Chapelle acquisitions, which were signed at the beginning of 2019.

9. T H Baker

T. H. Baker’s most recent financial results are for the 12 months ending October 31, 2017, so are roughly six months less current than other businesses we feature in this report.

The company currently says it has 22 stores, although the network is in a state of change with Pandora franchise stores closing and more multi-brand T.H. Baker stores opening. By December 2017 the group had only one remaining Pandora store and 18 T.H. Baker doors. It also owns multi-brand jeweller Green & Benz, which has three outlets.

In September this year, the company took over the leases of six Goldsmiths stores in Portsmouth, Hanley, Wolverhampton, Tamworth, Cambridge and Ipswich. They had all been re-branded and refurbished as T.H. Baker in time for 2018’s Christmas period.

The 2017 figures presented here are, therefore, rather dated. They cover a year when the business opened two new stores, refurbished four and re-located two.

Sales at T.H Baker rose by 3% during the financial year to £61.7 million, but operating profit was down by 39% due to rising cost of promotions and changes to the sales mix.

T.H Baker attributed growth in these 12 months to continued high demand for its products and and a full period of contribution from the new and larger stores opened in the previous financial year. The company’s boutiques carry popular brands such as Olivia Burton and Swarovski.

10. Berry’s Jewellers
Berry’s notched its second best year on record with sales of £47 million for the year ended June 30, 2018.

Berens & Company Ltd, the trading name of Leeds-based Berry’s Jewellers and Owen & Robinson, saw sales dip by 9% to £47 million in the financial year but this was still the retailer’s second highest turnover on record, following 2016-17 when a number of exceptional one off items boosted sales to £52 million.

Operating profit was up 3% to £7.8 million during the year despite a major refurbishment of the company’s flagship Albion Street store in Leeds.

Berry’s strives to make sure it remains a family jewellery business, despite luxury watches accounting for a large sum of sales.

The owners of the company have told Professional Jeweller they never want to lose sight of its routes as a jeweller and over the 12 months has made sure fine jewels and gemstone adorned pieces are placed centre stage in its windows alongside prestigious watch bands.

The group has nine stores in a network including doors in Leeds, York, Newcastle, Nottingham, Windsor and Hull.

Investment in real estate and stock has increased the group’s net assets from £50 million in 2017 to £57 million in 2018, and the director says the group will continue to improve and expand its estate.

Tags : Beaverbrooksberry'sBoodlesBuchererErnest Jonesf hindsFraser HartH SamuelJewellersRetailretail reportt h bakerwarren jamesWatches of Switzerland
Stacey Hailes

The author Stacey Hailes

Editor, Professional Jeweller

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