COVERSTORY INTERNATIONAL JANUARY 2011

Transcription

1 40 INTERNATIONAL JANUARY 2011

2 Gold Expressions 2011 by Dall Avo Chimento Italy Looks at Newer Markets Fiera di Vicenza to spend 29 million on makeover project The first international gold and diamond jewellery trade fair of the calendar year was successful in more ways than one. Putting behind the age of pink slips, the Italian jewellery market is all set to chalk out an ambitious plan to expand and call attention to its mastery in designs and craftsmanship and popularise the Made in Italy brand. Shanoo Bijlani reports. Tre-Spighe D-Orica INTERNATIONAL FEBRUARY

3 he 64th edition of Vicenzaoro First opened to coincide with the celebration of the 150th anniversary of the Unification of Italy. The fair, which welcomed a steady stream of visitors, including a record 19,000 first-time walkins, saw an 8% increase in the number of foreign attendees and 2.5% rise in domestic footfalls compared with the 2010 edition. Spread over 29,000 sq m, the six-day fair housed a total of 1,460 exhibitors, of which 1,047 were Italians and 413 were foreign exhibitors. Delegations from Saudi Arabia, Armenia, Brazil, China, India, England, Iran, Israel, Kazakhstan, Kuwait, Morocco, Russia, the UAE, Ukraine, Hungary, and the US visited the show to check out inventory displayed by exhibitors from 54 Italian provinces, and 30 foreign countries including China, Germany, Thailand and India among others. An elated Roberto Ditri, president of Vicenza di Fiera, said at the opening of the fair, The occasion serves to confirm how special Made in Italy actually is, in that it represents not 150 years of Italy s unification, but thousands of years of culture and a unique synthesis of tradition, craftsmanship, creativity, innovation and know-how of a longstanding production system that has always kept abreast of technological and market changes. Vicenza is the historic emblem and the DNA of the Italian supply chain of gold and jewellery the FOPE 42 INTERNATIONAL FEBRUARY 2011

4 FOPE utmost expression of Made in Italy. Recognising that the Italian industry s growth was closely linked to networking and global tie-ups, Ditri declared, Fiera di Vicenza must be a contact mediator, expert in markets and a cultivator of business relations. So, we have launched the Fiera di Vicenza development plan and with Vicenzaoro First we have laid the foundation for what will be our future as a world leader in the gold and jewellery sector. The Italian gold and jewellery sector is emerging from very difficult years and the first positive signs recorded at Vicenzaoro cannot be perceived as a definitive turnaround. We must do even more, Ditri announced in his inaugural address. In an attempt to reclaim our identity and to re-establish its global competitiveness, Fiera di Vicenza will implement actions to maintain and reinforce its international leadership in jewellery, Ditri noted. The aim is to develop new successful exhibition approaches that can be extended to other production sectors of high interest for the national economy. The launch of the Fiera di Vicenza project will aim to give the fair a strong Made in Italy identity. The five-year plan chalks out multi-level strategies and infrastructural plans to expand the show. The project, which will entail an overall expected investment of about 29 million, will include the construction of a new 15,000- sq-m pavilion and a car park that will accommodate more than 600 cars. The plan calls for the renovation and resizing of existing exhibition areas to improve access, reception, services, and COVERSTORY The aim is to develop new successful exhibition approaches that can be extended to other production sectors of high interest for the national economy. INTERNATIONAL FEBRUARY

5 the functionality of the exhibition spaces. A permanent laboratory and an observatory will be set up as a national reference point for innovations in the jewellery system; an international competition will be held dedicated to research and experimentation for young talent, and an international award will also be instituted. The project will also promote a jewellery museum in collaboration with local institutions. Taking a cue from reviving and emerging markets, the fair authorities have also taken the initiative to guide Italian jewellery companies to explore newer developing countries like China, India, and Brazil, where the bulk of upper middle class people are classified as aspirational buyers. The prospects are promising as long as custom duties will allow, informed Ditri. A newly founded Italian Club will help promote business, and create visibility and the presence of the Italian production system. This year, the first showcasing will be at JCK Las Vegas and the main event will be dedicated to the North American market, which is the third-largest destination for Italian jewellery exports. The fair will assume responsibility TJF Trends 2012 Paola De Luca, a leading authority on jewellery trends, outlined a few styles that would be prevalent in the coming months and spill on to the next year. She said, We must have new codes of communication with consumers and to show what Italians are capable of doing in terms of offering design innovations. High luxury today does not just mean gold, but it is the use of other material options such as resin, ceramic, leather and wood. Post crisis, Italy is refocusing on excellence. The beauty of it all is that consumers are now resisting standardisation. Craftsmanship is the key word and there is an acute need for limited edition collections. Buyers are asking for different techniques and designs which require experimentation, and Italians are able to adapt to customer needs. The focus thus is on limited production and high quality. Some of the mega trends: Earrings are getting smaller; studs are back Laser cut, light weight, glamorous designs; lacy looks make an entry Pearls will be high in demand Amplification of jewellery forms; very small items will not be in demand unless they stress the style of a person Big medallions are very strong in pendants, multi-layered necklaces are in vogue Cuffs and bangles will be popular; combination of many bangles or a single big cuff; cuffs will be sculptural, metallic and bold Tassels and beads, tapered conical elements, pendants popular in the 20s are being revived. Black diamonds will be part of the colour palette Moods New sobriety defined by simplistic, clean lines Monochromatic, stark all-metal look Use of clear stones, rock crystal, white metal Yellow gold stays a classic choice Jewellery goes back to the roots; the look is earthy, tribal, natural, abundant with geographical lore, crystals, talismans, and primitive celebration of local or regional history New quest in technology will bring to fore brown, blue, black and tarnished and treated metals; other colours will be achieved through enamels or other materials. Jewellery will also feature a kaleidoscope of colours; it will be technicolour The whimsical style will be in with elements from fairy tales, cartoons or circuses; Avatar-like characters. It will define romantic escapism; it will be kooky, carefree Organic and eco luxury will make its presence in design concepts; simple links, circular; interwoven, connected, open work, processed surfaces and abstract graphism. Jewellery will go green returning to Mother Nature bringing in warm green colour through emeralds. Recycled glass, plastic, wood, mother-of-pearl will become precious; social and ethical movements will showcase forest life Cosmic motifs, starry looks will be created with pavé diamonds and lots of encrustations; plenty of references to outer space, mystical and celestial bodies 44 INTERNATIONAL FEBRUARY 2011

6 for its future, and become effective in its current role as a driving force behind the economy of this nation, Ditri remarked. Silver lining The Italian market is recovering albeit slowly and the winds of change can be felt in the way the jewellery industry is working around the problems of the ever-rising cost of gold by opting for silver, a sister-metal to gold. Silver and its alloys won hands down and appeared to be the favourite of the recession-hit jewellery industry in Italy. Silver is the new gold for many Italian gold jewellery manufacturers. At the fair, silver made its glorious appearance in many sinewy, textured and coloured forms. Along with silver, pearls too seem to have reappeared with a vengeance, in order to keep jewellery costs low. Massive coloured gemstones peeped out of various jewellery collections facetted cuts, cabochons, ovals made a magnificent comeback. Diamonds alone or combined with sapphires, emeralds, rubies or other gemstones were clearly a favoured lot. Jewels in the shapes of flowers, animals, leaves, galactic bodies appeared aplenty. There was demand for low-ticket items below 1,000. Samer G., one of the executive directors of Autore, an Australian pearl jewellery company, substantiated the observation by saying that the company s performance at the fair was better than the last two years. High-end jewellery is not moving so well with us. But clients are looking for affordable luxury and pocket-friendly items. To sell exclusive pieces we need to wait it out for two more years before we can see demand for it. Pearls set in simple designs and costing between 500 and 1,000 are moving briskly. Anything above 2,000 is difficult to sell. COVERSTORY The fair will assume responsibility for its future, and become effective in its current role as a driving force behind the economy of this nation Autore deals only in South Sea pearls and the firm is happy to observe that interest in jewellery is slowly reviving. Samer added, The jewellery market is a reflection of the economic conditions. We have to understand that we are selling an illusion. If the market is facing a crisis or is in the early stages of recuperation from economic downturn, then there will naturally be no demand for jewellery. If the market is upbeat, we jewellers can Mattia Cielo Roberto Ditri Roberto Ditri welcomes Ding Wei, Chinese ambassador to Italy INTERNATIONAL FEBRUARY

7 Mayumi Damiani Autore automatically sense that mood. Only occasion-driven purchases are pushing sales today. Pizzolao Graziano was founded in 1967 and made gold and silver jewellery. But since the last two years, the firm has relied heavily on silver jewellery sales. Its sales officer Valeria Lunardi informed that 80% of the sales constitute silver We now make silver inlaid with fresh water pearls, and semi-precious stones. Our main markets are Europe, Portugal and Sweden. jewellery. We now make silver inlaid with fresh water pearls, and semiprecious stones. Our main markets are Europe, Portugal and Sweden, and we deal with wholesalers at the fair and they are looking at price points of below 50. Vicenza-based company Fope introduced its latest groundbreaking innovation called Twin collection in an alloy of silver and palladium, which has been patented as Silverfope. The antitarnish diamond-studded open, crossover and double cross-over bangles and cuffs of this collection were a rage at the fair. The bangles feature a different mesh and offering the typical Fope s attention to details. Valentina Bertoldo of Fope said, We are getting plenty of buyers from Italy, the UK, Germany Africa and Belgium. While our foreign customers know what the brand offers, Italian jewellers are haggling for price reductions and it is a bit awkward for us. Keeping in mind the economic conditions, we have not compromised on quality but have come up with a cheaper option with special patented alloys. All of a sudden, Italian exhibitors have begun to evince a lot of interest in knowing and understanding the Indian and Chinese markets. Some are already intending to hold solo, private shows and others for are looking for tie-ups. Yvel is one such company that intends to do a private show in Delhi in a couple of months. Nir Shinuk, Yvel s European marketing manager, confirmed it saying that the show was super successful for his company. We do lines in South Sea pearls and since the last two years our Rainbow collection has been doing well. 46 INTERNATIONAL FEBRUARY 2011

8 A New Direction Forward Following the fair inauguration, Roberto Ditri along with prominent personalities of the industry such as Paolo Madron, director of Lettera43, an online newspaper (the moderator of the seminar); Armando Branchini, secretary general of Altagamma Foundation; Mehul Choksi, chairman of Gitanjali Group; Matteo Marzotto, president of ENIT (Italian State Tourist Board); and Andrea Morante, CEO of Pomellato discussed the new approach and direction the Italian jewellery industry should take to achieve significant growth, and how the industry could return to health by tapping newer markets. Don t just wait for the recovery of traditional markets but also tap the newly emerging markets that have already emerged, Ditri advised, highlighting the fact that these were the countries with a large middle class ready to buy the Made in Italy brand of jewellery. He was referring to China, India, Brazil and Turkey. Ditri informed that the fair authorities were embarking on strategic planning ahead of time to restructure facilities and re-qualify the fair s concept. Vicenza fair would like to take our identity in our own hands and make the fair an engine of economic growth for the country. The fair s primary role should be to create new business opportunities and newer alliances for Italian companies around the world. Branchini pointed out that Italian businesses are strongly characterised by individualism but we lack a multinational networking system and so our market is limited. Our entrepreneurs are better at exporting rather than developing markets. Italians are not capable of increasing their businesses beyond a certain size. Adding value to a brand is an ongoing process. Matteo, who heads the Italian state tourist board, said Italians should have an idea of who their customers are and then position the brand accordingly; also we are not accurate in price positioning and identifying newer markets. We have been sitting on the fence and relying on the US and neglecting the recently developing countries. Fashion companies are leagues ahead of us and already have a foothold there. Gitanjali group that sells branded jewellery in India has 2,500 points of sales and wants to reach the 5,000 mark. Choksi said, Jewellery is a necessity in India, and when we started selling our brand 15 years ago we decided that we should change the scenario by introducing a brand that was strong, desirable, and honest and we communicated about it in a big way through Bollywood and cricket which Indians are crazy about. Nearly 70% of India s savings are spent on weddings, and of this 70% is spent on jewellery. India is a $50-$60 billion jewellery market. Although Italy is way ahead in terms of design and innovation, it is still missing out in the race because the country is not communicating about its Italian identity. If you are not quick to communicate, Vicenzaoro will be a fair for visitors to copy your product. The fair should help companies to seek newer markets, Choksi advised. Pomellato s Morante emphasised that size and growth are the key elements for success and Italian jewellers should look at mergers and aggregations. He recommended newer ways to attract buyers through interactive channels like Facebook and Twitter to connect with the final consumer. Threading the conversation to the next level, Ditri said, Our industries could go to developing countries to produce goods at a lower cost. We need to look beyond our doors rather than look at the performance of our competitors, it is better to keep an eye on consumer trends. There are different patterns of consumption in the world and one needs to study that. Ding Wei, ambassador of China in Italy, who was the guest of honour at the opening ceremony, welcomed Italian jewellery manufacturers to look for tie-ups in his country. The Italy and China bilateral trade has grown by 19.3% over the past five years to $45 billion. In the next five years, the two countries expect to double the figure to $80 billion. Wei revealed that China s annual consumption of jewellery stands at $30 billion. China s currently exports jewellery worth $8 billion and this figure is expected to grow rapidly in the next five years. The Chinese participation at Vicenza will only help further the growth, he noted. We are getting new buyers from Europe, the US, Far East, and are planning to do private shows in India. Indians, in particular, like our golden brown pearl line and sapphire collection. Known for its strong design and creative inputs, Italian firm Graziella manufactures 18 karat and 21 karat designer gold jewellery in Arezzo, but the company also has diamond collections, silver lines and studded accessories. Silver is an interesting potential and using it in our accessory line is our new aim. We are getting buyers from the Middle East and North Africa, said Massimo Citrenisi, the firm s general manager. Winds of change Many exhibitors got buyers from North Africa, Russia and East Europe, and Japan. Blue White Group was one such firm that entertained new customers from Russia, Kazak and Ukraine. We retained our old customers and also got new customers, including a strong repeat buyer from North Africa, Jacov Joshach of Blue White Group informed. We are slowly but surely developing newer markets and are touching base with the right customers. In general, we have noticed demand for very low or very high goods. We have couture INTERNATIONAL FEBRUARY

9 Blue White Group Autore Graziella merchandise below 1,000 and high-end goods between 3,000 and 20,000. We are pleased that our new lines are being appreciated for creativity as we have designers who think ahead of time. For many months now, our customers had been asking us if our merchandise was made of silver. Initially, we didn t like our fine jewellery to be downgraded, but we realised our customers were trying to tell us that they wanted designer stuff but in a metal that was affordable. So we retained our style by offering a blend of gold, silver and diamonds at low to medium prices. Silver earrings have been selling like hot cakes at the fair. By reducing the gold content in some jewellery and introducing anti-tarnish silver in unusual hues; we have hit the bull s eye. We have lowered our manufacturing costs by 30% to 40%, Joshach said. Italians have been increasingly putting together different elements in fine jewellery for a long time. But the current trend is to add recyclable or other userfriendly materials such as wood, plastic, or even Corian, a material made with the combination of acrylic polymer and alumina trihydrate. Because of its antiscratch and non-porous properties, it is generally used in equipments in labs and hospitals. Axel Scheffel of Scheffel-Schmuck from Germany introduced this lesser known entrant in the field of fine jewellery and adorned it with diamonds, gold and sapphires. Scheffel doesn t regret the heavy investment he had to make in purchasing the CNC machine that is required to manufacture and mould jewellery from Corian, which is otherwise an inexpensive material. I am reaping the benefits and am getting a lot of queries for our patented bracelets and rings. The cost of investing in the machine is very high but if you want to take a step forward in the field of fashion you have to think ahead of time to bring in eco-green jewellery. Our bracelets cost between 3,000 and 10,000 and rings between 1,500 and 8,000. The 40-year-old company has been making fine handcrafted jewellery, but 48 INTERNATIONAL FEBRUARY 2011

10 Italy Exports Up 26.2% To 3.2 Bn In Jan-Sept 2010 British precious metals consultancy GFMS stated that demand for gold in jewellery has diminished in the past 10 years by 50% from 3,205 tonnes to 1,819 tonnes in But gold as an investment shot up from 29 tonnes to 2,092 tonnes in the same period. Italy s National Institute of Statistics (ISTAT) reported that for the first nine months of 2010 the country registered a 26.2% growth in gold exports to 3.2 billion as compared with This was mainly attributed to the increase in gold rates. Italy s biggest export markets witnessed double-digit growth during the nine-month period: UAE (+32.8%), Switzerland (+53.1%), the US (+30.1%), France (+32.7%), Hong Kong (+54.1%), China (+20.5%), Russia (+46.7) and Turkey (+48.6%). The top two Italian gold districts Arezzo and Vicenza account for more than three-fifths of the total national gold exports at 33.8% and 26.6% respectively. Valenza s contribution is 12.1%; Milan exports 11.2%, and Rome, 1.9%. began using CAD/CAM technology for designing only since the last four years. The move was prompted because of high labour costs in Germany. Almost 70 % of the firm s jewellery is exported to Europe, the US and Japan. This is our second time at the show and we are getting some requests and generating a lot of interest from buyers, Scheffel said. Raffaella Mannelli, a designer with the eponymous brand, says that ebony is the protagonist in her fine jewellery and she adds gold, diamonds and bakelite to create unusual forms. The show is a bit slow. Christmas has just gone by and people have spent enough. Customers are looking for low-priced goods so I guess retailers and clients are experiencing buying fatigue. Last September at the Vicenza fair, we got such a good response that it was only in the third week of December that we finally completed all our orders. Expressing in gold Solitaire spoke to a few of the participants of Gold Expressions 2011* and found that the gold jewellery manufacturers were feeling the heat of the escalating price of gold. In a bid to survive in this tough market, many have totally focussed on the design element and used lower karat gold in jewellery by making 18, 14, and 9 karat jewellery. The fiercely independent Italians generally work in isolation in terms of techniques and designs. But most of them are now ready to embrace change and are open to customising for other countries. One of the exhibitors who didn t wish to be named said that he sells 9 karat gold jewellery in England, France and Italy, while 18 karat retails in the rest of the world. Reviewing the situation, we anticipated that there will eventually be a demand for 9 karat gold and we had a lead by developing such products a decade ago. We are getting ample orders from Turkey, Italy, France, the US, Hong Kong, and we are expecting customers from Dubai, said the source. A spokesperson of Tre Spighe said that the firm was getting new contacts at the fair, but the market conditions were not entirely free from problems. The 19-year-old company makes 18 karat gold designer products. The escalating gold price is one of the primary reasons why we still feel the market heat, he said. This time we brought in gold and coral jewellery and have received a fair response from the US and Italy buyers. But this is only the beginning of the year and we cannot predict how this year will turn out for us in terms of profits. The last two years have been the toughest COVERSTORY for us. However, we plan to sail through these turbulent years by focussing on innovation. Many Italian exhibitors pin their hopes on this year saying that it will definitely bring in positive changes in the market. Vendorafa s Augusto Ungarelli said, Last year was encouraging and we looked at tapping foreign markets. We sold our 18 karat light-weight jewellery mostly to the Far East and the US, but we are looking to sell high-end Italian goods in India as there are incredible opportunities there and the Indian market has a culture of jewellery and appreciation for design. To cut down costs, we make lighter jewellery that has a high design quotient. We want the creative freedom despite low demand and we won t compromise on it. Our company is famous for our bold, hammered and textured looks in gold. Participating in Gold Expressions is important for us as we believe in it and want to be part of the exclusive club of Italian creativity. SuperOro s Andrea Puzza was upbeat about business at the fair. He said that a good start in the beginning of 2011 holds a promising future for the industry. The company was getting a fair number of queries from the Far East for their light-weight jewellery made of ceramic and gold; and jewellery studded with semi-precious stones. The rising cost The fiercely independent Italians generally work in isolation in terms of techniques and designs. But most of them are now ready to embrace change and are open to customising for other countries. INTERNATIONAL FEBRUARY

11 Superoro Indians Had a Middling Fare Most Indian exhibitors were housed in a new location, which according to them, was out of bounds. The response to the show was middling and exhibitors wrapped up the show feeling disheartened as they hoped to meet new customers but couldn t. The rising price of gold and polished diamonds was hurting business, and even though the economy was on a mend, buyers were seeking low-priced goods. Ishan Shah of Sanghavi Jewels remarked that the show was okay and the firm had got a few queries from their old customers in the US, London, Sweden sourcing light weight and delicate jewellery. Fine Jewellery s senior manager Tej Singh informed that there were no casual walk-ins at the show. We had done our homework and fixed prior appointments and so we had clients coming over from the UK, France and Austria. The orders are more price-driven and products between 100 and 250 were sought. First-time exhibitor Dhaval Shah, international marketing manager of Ornamentations, felt that the fair did not yield good results. It took an age for buyers to find us, he said, adding, We had a few appointments with European customers. Some exhibitors had done their homework and brought in light-weight and bimetal (silver and gold) jewellery. Fourth-time exhibitor Viral Mehta, director of Dimpex, said there was demand for such goods as buyers were looking for lower price points as compared to Milan Shah managing director of Dinurje too said that because they cater to US customers, they were aware that lighter collections in silver and diamond jewellery below 300 would be favoured at the show. They got buyers from Italy, Spain, the UK, France and Germany. We were not so happy with the walk-ins and participated to spread our network in Europe. But we were unable to meet new customers. Loose stone dealer Ashish Saraf of LD Company in Jaipur was happy with the sales of tanzanite and aquamarine, but feels that a better location would have got him more clients. I have been supplying tanzanite in Italy for the last two years and the demand only seems to be growing. Italians are looking for high quality cabochons up to 20 carats and strings consisting of 1,000 carats and more, he said. of gold is affecting sales, but this year should be better than the last as retailers will now need to restock and buy newer merchandise and we have a lot to offer in terms of value and design, said Puzza. Fierce sense of pride in their work has helped some companies sail through the turbulent times. Giovanni Gnoato of D Orica said that they were doing well and never lose their focus from quality and service. But providing quality and service come at a cost, he continued, saying, fortunately our customers are aware of it and are willing to pay for those features. Despite the economic downturn, the company has managed to retain all its 60 wholesalers who sell its merchandise to 14 countries. Last year, business began to look up for the company, but the major hindrance was the cost of gold. Gnoato revealed that profit margins were getting thinner by the day. In 2005, the average price of gold was per gram and over a five-year span it rose by 150% to in In these five years, the cost of labour, insurance, loan interest investments on turnover rose exponentially, he said. We have only our customers to thank for a decent At the fair we are receiving new orders from Eastern Europe, North Africa, Japan, but we will have to evaluate their conditions before signing the deals. Our goods are being appreciated for our patented designs like the beaded looks with a particular alloy of titanium lend flexibility to the piece. * Gold Expressions 2011 showcased 120 pieces crafted by 23 Italian gold jewellery houses categorised into six themes namely Statement Cuff, Soft Gothic, intricate and Delicate, Opulent Organics, Bold links and Sculptural forms. Recovery in Italy is based on creating innovative products and competing in the global world, Ditri said. We have to compete with the rules of the world and in those terms Vicenza First is the global passport for growth. We have been running behind times and have to do something to become an ace country. Clearly the Italian industry is eager to move on a fast track and recover from the sluggish and slow pace of growth, which it has been experiencing since the past ten years. It may take some time for its industry to recuperate, but the day is not far when the Made in Italy brand will be once again be duly recognised for all its worth. n 50 INTERNATIONAL FEBRUARY 2011