Retailers open up windows of opportunity in own-brand jewellery

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In May, retail group Watches of Switzerland made an unexpected acquisition of the distribution rights for jewellery brand Roberto Coin in North and Central America. Investors welcomed the move, boosting the share price by about 30 per cent within a week.

The retailer’s chief executive, Brian Duffy, said that after its expansion in the US watch market, he saw an opportunity to move into jewellery. Roberto Coin’s strong foothold in the US jewellery market, the world’s largest, was an opportunity to drive growth for the group, whose £1.5bn in revenue is almost evenly split between the US and the UK and Europe.

While the acquisition might have surprised some, Watches of Switzerland is following a growing trend among retailers that are expanding into jewellery and even high jewellery. Two years ago, Jared, part of Signet Jewelers in the US, introduced its own jewellery line, Jared Atelier.

Canadian retailer Birks launched a high jewellery range and German retailer Wempe has extended its own-branded jewellery offerings, first launched around 20 years ago, into high jewellery.

Meanwhile, Swiss retailers Bucherer and Gübelin not only sell their own jewellery and high jewellery lines but also offer watches. Gübelin, for example, recently unveiled its new Ipsomatic watch, designed by renowned architect Santiago Calatrava, marking the brand’s return to watchmaking after a 20-year hiatus.

“It is a phenomenon that we’ve observed in other categories as well, like fashion and footwear,” says Achim Berg, an independent strategy consultant and former partner at McKinsey, where he led the luxury and apparel division. “It’s often multi-brand retailers who seize the opportunity to launch their own brand by leveraging their knowledge and access to customers,” he adds.

Berg says that in a market worth, according to McKinsey, about £250bn where about 75 per cent of the products are still unbranded, it is a logical move and follows sound business rationale for retailers to introduce their own brands. “This strategy aims to create an attractive, high-margin business, especially when sourcing is done directly and especially at those high price points,” he says referring to high jewellery.

It is like a symphony: every brand has its own tone. A portfolio needs to be carefully curated

Berg further explains that the shift towards retailer-owned brands has been driven partly by established jewellery makers prioritising their own stores, and partly by the desire to offer customers something new and exclusive, rather than the same selection found elsewhere.

“Having an own range, where you can display some uniqueness, and where you can also fill in some of the price points or some product categories, is probably helpful,” he says.

While it is tempting to draw comparisons with supermarkets’ own labels competing with established brands, the nature of the jewellery market is different. Some believe that retailers’ new ventures offer opportunities for growth, rather than cannibalising sales of branded jewellery.

“It is like a symphony: every brand has its own tone,” says Gübelin president Raphael Gübelin. He adds that “a portfolio needs to be carefully curated” by selecting brands that benefit each other and considering what the benefits are for clients. Included in the mix is the retailer’s own brand, which the company has been designing for more than 100 years, lately focusing its distinct style on rubies.

At Watches of Switzerland, securing the trust and support of existing partners has been Duffy’s priority, as shown by the development of monobrand watch stores operated by the group. “For jewellery brands, the acquisition demonstrates our commitment to the category, and we have strong growth plans with all our main jewellery partners,” he says.

The sentiment emphasising that the success of these brands will ultimately determine that of retailers too is shared by the brands themselves, particularly emerging ones that rely on the retailer’s expertise when entering new markets.

Guillaume Laidet, who in 2020 relaunched Swiss watchmaker Nivada Grenchen, says that by expanding into jewellery, watch retailers could strengthen their business in women’s timepieces — a category that remains a bright spot amid declining sales, he adds.

Berg, however, remains cautious. While the jewellery sector has grown significantly since the pandemic, he says shifts in the market could prompt some jewellery brands, particularly those at aspirational price points, to be wary of retailers’ offerings because of the risk of cannibalising sales.

“I don’t think the most sought-after brands will be concerned in any way,” Berg says. “However, today’s market is less favourable than it was two years ago. Retailers will naturally focus on margin and sell-through, while brands will aim to ensure broad distribution and the right partnerships. Everyone will be careful in this environment.”