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Abbeycrest to target the more affluent customers
JEWELLERY firm Abbeycrest is to move upmarket with the launch of three new brands to tap into consumer demand for more expensive jewellery.
The Leeds-based group said the new collections, called Gorgeous Gold, Fluid and Osare, would appeal to more affluent male and female customers.
Under its new management team Abbeycrest has moved away from low-margin jewellery – typically selling at less than 20 per item – towards higher margin items that sell for anywhere between 25 and 900.
The group has also reduced the number of stock lines from 22,000 to 16,000 and plans to reduce this further to around 12,000.
Simon Ashton, executive chairman of Abbeycrest, said: "We need to shift upmarket and reflect the current trend for people to buy less jewellery but buy higher quality items."
In a bid to tap into the growing fashion for men to wear jewellery, the Osare brand is aimed at 25 to 45-year-old men.
Items such as cuff-links, wedding rings, bracelets and neckware sell for 279-399 and the group is seeing strong demand for palladium, a precious metal that is similar to platinum except that it weighs and costs less.
"We are seeing strong demand from the sailing and windsurfing community," said Mr Ashton. "It started out with leather wristbands and now it's moved into metal."
Sales of men's jewellery soared 12 per cent between 2003 and 2007 and now accounts for 11 per cent of the total market with four out of ten men now wearing jewellery.
The Osare jewellery is sold in key independent stores and Abbeycrest is also in talks with a number of high street chains such as Ernest Jones and Goldsmiths.
Fluid is aimed at the young female market and the brand's sterling silver bracelets, ear-rings, bangles and necklaces typically sell for 25 to 45 in high street shops such as H Samuel.
The third new brand is Gorgeous Gold, aimed at the 30-40 plus female market and sells necklaces, ear-rings and bracelets for between 40 and 899.
Mr Ashton said the 12 months to February 28 had been a significant year for Abbeycrest.
"We have successfully implemented our restructuring programme and the foundations are now in place to enable the group to maximise its potential growth," he said.
Abbeycrest has significantly reduced overheads over the period.
Revenues fell from 61.9m to 53.1m and the group made an operating loss of 7.1m after exceptional costs of 8.2m reflecting the impact of the restructuring programme.
The company made an annual pre-tax loss of 10m, down from a loss of 3.5m the previous year. Abbeycrest has reduced its UK staff levels from over 1,000 to under 700 following the restructuring, but no more redundancies are planned.
In addition to its UK customers, the group is also hoping to boost sales to countries such as Australia, Russia and America, where it has a relatively low market share of between one and three per cent.
Abbeycrest has appointed two new main board directors. Graham Partridge was appointed group finance and operations director in March and Nick Hamley was appointed group sales and marketing director last month.
Mr Ashton said that growth in the less price-sensitive segments of the market, particularly in the current economic climate, is a positive way to progress.
Shopping for something precious
Abbeycrest's move upmarket reflects the growing demand for precious metal jewellery, with innovative designs proving to be the key trend, according to researchers Mintel.
"These days British shoppers are becoming more discerning about the jewellery that they buy and are now prepared to pay more for a really good quality piece that stands out from the crowd," said Katrin Magnussen, senior fashion analyst at Mintel.
"This combined with the fact that up-market jewellery is often bought for sentimental reasons means that the market is likely to hold its own in these more challenging times."
There is a trend towards more original and distinctive pieces, with one in three adults saying that they look for something unusual, while just 12 per cent go for a classic or traditional design.
"There is a strong trend towards bold, individual pieces to express personal style," said Ms Magnussen.
Mintel said that long gone are the days of women having to hunt down wealthy men to buy them jewellery as 22 per cent of women buy their own.
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