It might appear counterintuitive at first, but launching a jewellery business during a pandemic could end up being the best time to do so. With the majority of sales now happening online, it is not surprising to see new online jewellery stores popping up.
“Companies launching now are trying to prove they can have an edge and accelerate their growth once out of recession,” says Sarah Willersdorf, Boston Consulting Group’s global head of luxury.
Even before the pandemic, the jewellery sector attracted $5.5bn of private investment in 2018, going to 286 new companies (compared with 78 new companies in 2005). Willersdorf says the pandemic has only accelerated trends already under way, such as the surge of ecommerce and brands selling directly to consumers.
The rising volume of private investment piqued the interest of serial entrepreneur Shezan Amiji, who last year teamed up with Vishal Mehta, member of a third-generation family business specialising in diamonds, to set up Once. This is an online retailer offering jewellery from established names such as Messika and Damiani and upcoming designers such as Loquet and Milamore.
“There are two determinants used to understand profitability in ecommerce: the average order value and the take rate [the percentage charged by the marketplace to match buyers and sellers], and jewellery has the highest of both,” says Amiji, explaining the attractions of an online jewellery business. Launching at a time when bricks-and-mortar stores were forced to shut helped Once quickly secure the targeted wide range of designers.
The economics of the €132bn global jewellery industry also attracted longtime friends Mie Marie Ejdrup and Caroline Chalmer, who decided to found online retailer Finematter, headquartered in Copenhagen and London. The supposed timelessness of jewellery — rather than a “newness and sales-driven drop cycle” found in other fashion products — added to the appeal, according to the former apparel executive and management consultant duo.
The platform mimics the Farfetch business model by offering designers — primarily independent ones such as Anissa Kermiche and Charlotte Chesnais — a larger reach through its logistics infrastructure. Heartcore Capital and private investors Henrik Holmark (former chief finance officer at Danish jeweller Pandora) and Nicole Vanderbilt (former managing director at online marketplace Etsy) have backed the venture with a seed investment of €1.7m. Influencer Pernille Teisbaek is also on board as a creative adviser to spread the word on social media.
Meanwhile, new London-based online vintage jewellery retailer and concierge Omnēque focuses on the burgeoning secondary market, which, according to BCG, is worth $21bn and is predicted to grow at 8 per cent a year, compared with the projected 1.1 per cent growth of the primary market, through to 2023.
“The idea of not only jewellery but also fashion and watches having a second life is not only accepted but appealing. It’s now deemed sustainable, savvy and stylish to shop this way,” says Omnēque chief executive and co-founder Amanda Zuydervelt, a former Richemont executive.
Zuydervelt felt that other vintage luxury retailers selling anything from a cardigan to a candlestick did not provide the right environment to appreciate jewellery and their pricing based on individual sellers’ evaluations was tenuous. By contrast, Omnēque’s jewellery is selected, authenticated and priced by Vivienne Becker, a jewellery writer and contributing editor to the FT’s How to Spend It magazine, as well as Joanna Hardy, gemologist and expert on the BBC’s Antiques Roadshow.
Yet the allure of seizing the moment during a time that limits social interaction is often tempered by other hurdles. Founders have said that starting a company remotely makes it difficult to create a culture, impedes the sourcing of packaging and makes organising product photo shoots difficult.
It is a climate in which adaptability is paramount, says jewellery veteran Fawaz Gruosi. After leaving De Grisogono in 2019, the jewellery company he founded, Gruosi opened a boutique on London’s Berkeley Square before Christmas to showcase his flamboyant new eponymous high jewellery creations. Originally, he had decided not to sell online, but now he says that “in the light of this global pandemic, we are seriously considering the possibility of providing digital solutions for our clientele”.
Selling online directly to consumers was not one of the first moves planned by Iris de la Villardière and Thomas Montier Leboucher, as they wished to gain initial credibility for their brand Viltier through retailers. However, when the first lockdowns in Europe cancelled all scheduled appointments with buyers — who had stopped taking on new brands — the duo was left with no other choice.
“We showed the bank our product, our business plan and the numerous messages of interested clients via Instagram,” says Montier Leboucher, who applied for a loan to open up an online store to start generating revenues. The sales exceeded his expectations: “Ninety per cent of our online clients are in the US spending between €3,000 and €10,000,” he says. A separate wholesale order placed last month by luxury ecommerce company Net-a-Porter was his most recent success.