Behind the Sparkle

A lot has changed in the jewellery industry since diamonds were a girl's best friend. Maria Cobden investigates.

Smash and grabs are one thing, but when a group of armed robbers break through electronically locked doors on a Sunday morning while there are customers in the shop and people on the footpath outside, that's another thing entirely to deal with.

The surge of violent robberies is one of the most important factors affecting the jewellery industry today.

During the 18 months until August 2002 as many as 15 robberies have taken place in the Sydney CBD and the suburb of Chatswood. At least $500,000 worth of stock has been taken from each store, sometimes more than $1 million, according to Jewellery Association of Australia CEO John Howie.

"We are not concerned only from the point of view that these are large losses and that makes insurance in today's climate very difficult to get, not only for the people that have been hit but for everybody else. But also that these are robberies with violence – the most recent one was in George Street in the city [in Sydney] on a Sunday morning."

He says the robbers broke through the electronically locked doors with sledgehammers and crowbars while customers were inside the shop.

"Sometime, somebody ought to be arrested, and that's our problem. That they aren't, there is no result. There is no result to any of these crimes."

Howie believes the best way to catch these criminals would be to find out how they are disposing of the jewellery after the robbery.

"There is a self-evident thing to me, and that is that if a convenience store is robbed in the middle of the night, they are not taking the tea and the coffee, they are taking the money out of the till … In the case of the jewellery industry, they are taking things which should not be so easy to dispose of as they are."

"If you stop where [the jewellery] is going to, nobody is going to want to rob the stores because it will be too hard to get rid of."

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The extreme violence of these crimes makes them more crucial to solve; however, Howie says jewellers around the country have to deal with a number of other theft-related issues.

"Just recently we had a very creative person or persons who must have been photographing rings and having the rings reproduced." He says the person was going to see the ring two or three times and, on the third visit, swapping a one or two carat ring, with a ring identical to look at but with a cubic zirconia in it.

So what can be done to help the jewellers, both with violent robberies and the more 'garden' variety?

"One of the things we have put in place is a robbery alert. When we get told about something that happens we now email and fax everybody in the area that is concerned. I think it is probably the most valuable thing we have put in place."

 

Keeping Up with the Jewellers

To help keep up with the changing requirements in the industry, the Jewellers Association of Australia (JAA) is going about reinventing itself, and moving head office from Canberra to Sydney was just the beginning in early 2000.

Howie says: "I know the organisation had got itself into a little bit of a rut."

So a change was in order.

"My job was to restructure the organisation, including producing a new constitution because the one it had before was pretty crap and very outdated and didn't really represent where the industry was going. And then put a business plan into place that would take the industry off into the future."

After 18 months, Howie says much of this work has been done.

With 1,000 members representing 1,700 jewellery stores in Australia, the JAA must look after the interests of a variety of jewellers. Howie says members basically fall into three categories: sole traders, sole traders who are part of a buying group, and chain stores.

"One of the things we are changing in our constitution is to acknowledge that it is a company … it isn't an industry association, it just performs the role of an industry association.

"We have now written a new constitution … there is a fundamental change and that fundamental change is that it recognises there are major sectors in the industry that need to be able to get a faster route to direct representation."

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Member representation is obviously a large part of what the association does, but it also negotiates merchant rates for members, and handles consumer complaints.

"I think people have built up over the years unrealistic expectations about jewellery. One of the biggest problems is people expect it to last forever. Your car doesn't last forever; nothing else lasts forever."

He says many consumers call the association to complain about jewellery they have purchased. For example he says they call to say the stone fell out of their ring, but when asked how long they have had the ring, the answer can be '12-15 years' yet they still expect the jeweller to fix it.

"We will help them if they have a genuine problem with some thing has gone wrong in a reasonable period of time with a jeweller, we have a dispute resolution process."

In terms of education, the JAA plans start developing care labels for the jewellery so people have realistic expectations.

 

Discount Disadvantage

One thing Howie believes brings the industry down is discounting. "It is something that I personally don't like at all, I think it degrades the industry.

"We are supposed to be selling love, romance and precious possessions; how do you relate that with 20 percent off, 50 percent off? It doesn't make much sense to me. But the industry's got itself in the bind where no-one will stop, no-one sees itself being able to stop, particularly the big chains.

"I think what discounting has done is discount the glamour in the industry and I think that is a great pity."

Many things have changed since jewellery was first and foremost a status symbol.

"We had a strong manufacturing industry in Australia, that has been dramatically affected by cheap imports."

Howie believes discounting is something that has a flow-on affect, once one store starts, others competing for the same customers must follow, driving the price and value down even further.

"When a marketing manager can't think of anything else to do, they resort to discount. Now if you are looking over your shoulder and looking to the guy up the road and he is doing exactly the same thing, then you are going to drive the price down all the time."

However, he does admit there is not a lot he can do to change the way the industry operates. "At the end of the day it is not up to me. If that is the chosen vehicle to sell the product, and they might be right and I might be wrong, then that's up to them, I can't do anything about it."

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Learning Curve

For those interested in studying the subject, Charles Sturt University offers a Bachelor of Arts (Jewellery).

The three year course promises to teach students about jewellery design, stone setting, gemmology, casting and related manufacturing processes, construction, enamelling and colouration, computer aided design and manufacture and model making, as well as the more fundamental business planning and development and legal and industrial issues.

According to information produced by the university: "We encourage applications from prospective students to the undergraduate BA (Jewellery) program regardless of prior experience in jewellery design and manufacture. We are interested in talent rather than demonstrable manufacturing skills."

For more information, call the course co-ordinator on (02) 6933 2838 or visit www.csu.edu.au/faculty/arts/vpa

As for people already in the trade, the JAA is holding its Australian Jewellery Fair and
New Year Conference at the Sydney Convention & Exhibition Centre in Darling Harbour from February 2-4. For more information check out the JAA website at www.jaa.com.au

 

Cause & Effect

So what are the main problems facing small retail jewellers? Hands on Retail spoke to two jewellery store owners about their concerns for the industry. It would seem security and the economic climate are problems facing all small retailers in this space. However, the issues of tourism and discounting appear to affect jewellers based on their location and market positioning.

Ron Molnar of St Michel Internationale, situated on Sydney CBD's George Street, says the main things affecting his business are tourism, the general economic climate (including interest rates) and security.

Tourism: Molnar says when things like the Bali bombing happen, people just stop travelling and there aren't as many tourists about to buy jewellery.

Security: "It's a bugger," he says. With thieves looking for anything they can get their hands on, he has even had staff members sprayed with mace. His suggestion to others coping with the same problems, "just be on the ball and don't leave much stock out".

Ani Ohanessian runs Berjani Jewellers with her husband Berj. They began in the industry as a design and manufacture firm in 1984, but decided to open a retail shop selling 'high-end' jewellery a year ago at the Riverbank shopping centre in Parramatta, NSW. She says in terms of security, because they are located in a centre, "it is better for us, although that has not deterred some people". Although Ohanessian says the risk of being burgled is just part of doing business as a jewellery, and they don't live in fear of it.

Discounting: "It's a problem. When we price our goods, we price it to the value that it is. We do not up the price so we can discount," says Ohanessian. Despite this, she says customers expect to get a discount. "With a majority of customers coming through, how much discount is the first question they put forward."

Foot traffic and repeat business: No matter what the location, high foot traffic is of great importance to jewellers, and in fact most retailers. Both Ohanessian and Molnar agree that once the customer is in the door, it is important to establish loyalty to ensure repeat business.

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Feel Secure

Robberies and theft may be a way of life for jewellers, but there are steps you can take to protect your store according to the sales and marketing manager of security company Charter Resources, Geoff Paulsen.

First up, the basics. A reputable alarm system which is monitored by a control room and a duress button which is also linked to a monitoring company, so that once pressed, they can take immediate action.

Camera equipment is also a must, and Paulsen suggests a closed circuit television (CCTV) system which focuses on the store's bench top and counter.

Next on the shopping list would be strong front doors and front windows, preferably made of laminated glass which is capable of stopping a bullet, or a crowbar.

Paulsen also suggests magnetic locks on the doors for jewellers, as they can't be jimmied open.

Another system used in the US and UK is something called 'smoke & cloak' which fills the store with smoke (which is harmless to breathe) when a panic button is activated, or when an alarm goes off. "You can't see you hand in front of your face in about 10 seconds. The theory is you can't steal what you can't see." The robber is disoriented in an unfamiliar environment, whereas anyone in the store would, hopefully, know the layout and make their way out.

Another drastic measure that Paulsen says is used in South Africa is called 'man trap'. The man trap is a perspex corridor where the customer enters, the door locks behind them so they can be checked out before entering the store. Often, he says, these man traps are teamed with security guards who have metal detectors. "I would hate to see this country come to that."

On a more practical note, Paulsen encourages jewellers to have a single area at the rear of the shop where people can try on any goods. This makes it harder for would-be thieves to run out of the store with any jewellery, especially if an employee can lock the door remotely.

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