In May 2024, Watches of Switzerland made waves in the retail world with its unexpected acquisition of distribution rights for the renowned jewellery brand Roberto Coin across North and Central America. The move surprised many industry observers but was met with an enthusiastic response from investors, with the company’s share price soaring by approximately 30% in just one week.
Brian Duffy, the chief executive of Watches of Switzerland, explained that after the retailer’s successful expansion in the U.S. watch market, the next logical step was to branch out into jewellery. The acquisition of Roberto Coin, which boasts a strong presence in the U.S. jewellery market — the largest in the world — represents a significant opportunity to drive further growth for the company. With an annual revenue of £1.5 billion, nearly half of Watches of Switzerland’s business comes from the U.S., while the rest is split between the UK and Europe.
This acquisition is part of a broader trend within the retail sector, where retailers are increasingly seeking to expand into jewellery, and even high jewellery, to diversify their offerings and cater to growing consumer demand for luxury products.
A Growing Trend: Retailers Expanding into Jewellery
Watches of Switzerland’s move into the jewellery market is not an isolated case. Retailers around the world are increasingly turning to their own-branded jewellery lines as a way to capture a larger share of the luxury market. Two years ago, U.S. retailer Jared, which is part of Signet Jewelers, launched its own exclusive jewellery line, Jared Atelier. The introduction of this line marked the beginning of a shift in the retail sector, where multi-brand retailers are starting to recognize the value of offering their own luxury jewellery collections.
Similarly, Canadian retailer Birks has embraced this trend by launching its own high jewellery range. German jewellery retailer Wempe has also made moves to expand its own-branded jewellery offerings, first introduced two decades ago, into the high jewellery segment. These retailers are following a clear strategy to build their own identities in the high-end jewellery market, expanding beyond their traditional roles as distributors of other luxury brands.
Swiss Retailers Make a Bold Statement in Jewellery and Watches
In addition to U.S. and European retailers, Swiss companies like Bucherer and Gübelin are making significant strides in the luxury jewellery market. Both of these prestigious brands not only sell their own jewellery and high jewellery collections but have also expanded their portfolios to include luxury watches.
Gübelin, for example, recently unveiled its Ipsomatic watch, designed by acclaimed architect Santiago Calatrava. The release of this watch marked the brand’s return to watchmaking after a 20-year hiatus, demonstrating the company’s renewed focus on both fine jewellery and timepieces. The decision to expand into both categories underscores the growing importance of offering a diverse range of high-end products, which allows retailers to cater to the evolving tastes and demands of their affluent clientele.
The Rise of Own-Brand Jewellery: A Logical Business Strategy
The expansion of multi-brand retailers into the own-brand jewellery market is a phenomenon that has been observed in other luxury categories as well, such as fashion and footwear. Achim Berg, an independent strategy consultant and former partner at McKinsey, where he led the luxury and apparel division, believes that this shift is driven by the opportunity for retailers to leverage their extensive customer knowledge and access to a loyal consumer base.
Berg explains, “It is often multi-brand retailers who seize the opportunity to launch their own brand by leveraging their knowledge and access to customers.” By creating and marketing their own jewellery collections, retailers can deepen their engagement with consumers, offering them exclusive products while simultaneously increasing profit margins.
The jewellery market, according to McKinsey, is valued at approximately £250 billion, with around 75% of products still remaining unbranded. For retailers, this represents a significant opportunity to introduce their own high-quality, branded jewellery lines. Berg argues that launching an own-brand jewellery collection is not only a sound business decision but also a way to tap into an attractive, high-margin segment, particularly when sourcing is done directly and at the higher end of the price spectrum, such as in high jewellery.
The Appeal of High Jewellery: Profitable and Exclusive
High jewellery, which typically features rare and precious materials and is often limited in production, represents one of the most lucrative segments of the luxury goods market. The appeal of high jewellery is clear: it offers exclusivity, craftsmanship, and the allure of luxury. Retailers looking to enter the high jewellery market can benefit from high profit margins, as these pieces are often sold at premium prices. By offering their own branded collections, retailers are able to tap into this lucrative segment without relying solely on third-party suppliers.
This shift towards high jewellery also reflects changing consumer behavior. As affluent consumers seek out unique, bespoke pieces that reflect their individual style and taste, the demand for high-end, exclusive jewellery continues to rise. Retailers who can offer this level of exclusivity have the potential to build strong relationships with their customers, securing brand loyalty and repeat business.
Retailers Embrace Vertical Integration
One of the driving forces behind the expansion into own-brand jewellery lines is the growing trend of vertical integration in the luxury retail sector. Vertical integration allows retailers to have greater control over the production, pricing, and distribution of their products. By bringing jewellery production in-house or collaborating closely with skilled artisans, retailers can ensure that their collections meet the highest standards of quality and craftsmanship.
In addition to offering high-quality products, vertical integration enables retailers to manage their profit margins more effectively. By bypassing traditional middlemen and suppliers, retailers can capture a larger share of the revenue generated from each sale. This move toward self-sufficiency and control over the supply chain is a strategy that has proven successful in other luxury sectors and is now making its way into the jewellery market.
Consumer Demand for Unique and Personalized Jewellery
Another key factor driving the rise of own-brand jewellery is the increasing consumer demand for personalized and unique pieces. Consumers are increasingly seeking jewellery that reflects their personal style and values, rather than mass-produced items from established luxury houses. This shift has led to a growing interest in bespoke and customized jewellery, where customers can work directly with retailers to create one-of-a-kind pieces that are tailored to their specifications.
Retailers that offer these personalized services are able to build stronger connections with their customers, creating a sense of exclusivity and intimacy. For retailers launching their own jewellery lines, this trend presents an opportunity to differentiate themselves from competitors by offering bespoke services that cater to the growing demand for personalized luxury.
The Future of Own-Brand Jewellery
As the trend of retailers expanding into jewellery continues to gain momentum, the future of own-brand jewellery looks promising. The success of Watches of Switzerland’s acquisition of Roberto Coin and other retailers’ moves into high jewellery are just the beginning. With the luxury market showing no signs of slowing down, more retailers will likely follow suit, creating their own exclusive jewellery collections to cater to the growing demand for high-end, unique, and personalized pieces.
Retailers are also investing heavily in digital platforms, using e-commerce and social media to reach a wider audience and showcase their jewellery collections to a global customer base. This shift toward online retail, combined with an increased focus on personalized and exclusive products, will shape the future of the jewellery industry, offering consumers new ways to engage with brands and discover luxury jewellery.
Conclusion: A New Era for Retailers in the Jewellery Market
In conclusion, the increasing trend of retailers entering the own-brand jewellery market represents a significant shift in the luxury sector. Retailers are recognizing the value of offering exclusive, high-quality jewellery collections that resonate with consumers’ growing desire for uniqueness and personalization. As companies like Watches of Switzerland, Jared, Birks, and Wempe continue to expand their jewellery offerings, they are positioning themselves to capitalize on the lucrative opportunities within the luxury market. With the potential for high margins and a strong connection to their customer base, retailers are likely to continue pursuing this strategy, making own-brand jewellery an essential part of their future growth plans.
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