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Opportunities in the UK Jewellery Market

Simon Ogilvie Harris

Chavin Jewellery - Managing Director

Out Of Peru – Managing Director

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The UK Jewellery Market – Size and Key Segments

• UK Jewellery Market expected to grow c. 2% per Annum

• Total Market Size currently £4.75bn

• Precious Metals is largest segment – mainly gold and silver

• Costume Jewellery is a growing segment given its lower price points in these tough

economic conditions

562

3190

998

Key Segments in UK Jewellery Market £mn's

CostumeJewelleryPrecious MetalJewelleryWatches

4,400

4,600

4,800

5,000

5,200

5,400

2009 2010 2011E 2012E 2013E 2014E 2015E

UK Jewellery Market Value £mn's

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The UK Jewellery Market – Key Commercial and Distribution Channels

• Independent Retailers should be key target area – over 5000 in the UK

• Independent Retailers can be broken down into High End Jewelers; Gift Shops and

Fashion Boutiques

• It is key to find retailers where the product range will fit in

Key Target Retailers PERU JEWELLERY

SAC

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• UK Retailers want a 2.5-3x mark up on wholesale prices to cover overheads and sales

tax (VAT 20% of retail sales price)

• Optimal Retailer Price Points which they sell at are £20 ($30) - £65 ($105)

• Highest volume sellers will be sold by Peruvian companies at $10-$40 wholesale

The UK Jewellery Market – Key Metrics For Retailers and Optimal Price Points

Thomas Sabo Obsidian

Bracelet – £29.95 ($47)

Pandora Leather bracelets –

£40 ($63)

Exchange rate used: £1 = $1.56

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• All Silver and Gold Jewellery must be tested by Law and Hallmarked

• Hallmarking is an ancient law that has been in the UK since 1300’s to certify precious

metals are real

• Get the import documentation right – GSP Form A

• There is an advantage for companies buying from Peru compared to China or Asia as

there are no import duties on Peruvian Jewellery

The UK Jewellery Market – Regulations and how to export to the UK

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• Growth in the modern self purchasing woman segment – key target to hit especially

for more up market jewellery

• Gift market remains a key segment of jewellery sales – men buying for their wives or

daughters.

• Silver contemporary designed jewellery targeted at a younger female audience whilst

gold is for an older demographic.

• According to key market research the typical UK customer wants simple exclusive

products.

The UK Jewellery Market – Customer Profiles

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• Tailor the collection to the shop and market that you are aiming at with more designs in lower price

point ranges

• Critical to follow key seasonal fashion trends from New York and London – currently Rose Gold and

Silver are very hot

• Break your collection down into 3 categories:

a) Eye Catching Pieces – big statement jewellery

b) Single Products – an element of stronger design

c) Base Products – simple products that will sell in high volume

• Do not be afraid to replicate best selling designs with different colour stones or materials to give

customers choice

The UK Jewellery Market – How to build a Commercial Range

The Base Product: The money

maker

The Single Product The Eye Catcher

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• With rising prices of silver and gold successful jewellery companies are using other

materials

• Good materials to use include: leather as a substitute to precious metal for chains or

bracelets; silk cords instead of silver chains; or waxed cotton cord with bracelets.

• Use materials with high perceived values. For example low grade rubies are cheaper than

some semi precious stones but have a higher value in the UK consumers’ eyes.

The UK Jewellery Market – How to build a Commercial Range 2

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• Jewellery is increasingly coming in line with key fashion trends

• It is important that jewellery designers pay attention to seasonal colours

• Bohemian Trend very popular and to continue into 2012

• Layering and wrapping of bracelets on trend as well as ethnic/tribal designs with a

western twist.

• Use Peruvian Cultural inspiration and integrate into key trends from New York and

London

• We are in a recession – people want BOLD and AFFORDABLE

The UK Jewellery Market – Key Trends - Overview

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• Layering - This look features layers, and lots of them.

• Necklaces with chains that hang at different lengths are popular.

• Bracelets made from multiple strands, or from one long strand that can wrap around

the wrist will also achieve that desired layered look.

• Layering of many different bracelets altogether. Could be one design and variations on

colour.

The UK Jewellery Market – Key Trends – Layering

Layering of Individual

Bracelets Layered Sterling Silver

Necklace with Crystals

Layered Leather Bracelets

with Precious Metal Charms

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• Use stones that match colour trends by season – darker colours are more suited for

A/W whilst brighter colours for S/S 2012 (see next slide)

• Use Peruvian Stones where possible and match to these trends such as: Peruvian

Turquoise, Andean Opal, Chrysocolla.

• Popular trends are brightly coloured bracelets and cocktail rings – beaded semi

precious stone bracelets on sterling silver wire.

• Bracelets and rings are most popular in these categories

The UK Jewellery Market – Key Trends – Bright Colourings

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• Autumn Winter 2011/12 and Spring Summer 2012 colour charts

• Easy to access these via GOOGLE – many different website offering commentary and

information on next season fashion trends and colours

The UK Jewellery Market – Key Trends – Bright Colourings 2

Spring Summer 2012 Autumn Winter 2011/12

Source: Fire Mountain Gems Source: Fire Mountain Gems

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• Younger generation of men are becoming more interested in trend-led accessories

such as sunglasses, man-bags and even bracelets.

• Leading market research shows that one in five men also like to receive jewellery as a

gift.

• Men’s jewellery tends to feature leather, steel, sterling silver and diamonds

The UK Jewellery Market – Key Trends – Growth in Mens Jewellery

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• Growth in ethical products – in the UK market they have increased 10x to £36bn in

past ten years

• Get Fair Trade Certification if you can – this will add value to your company in the UK

• People won’t buy ethical products just because they are ethical – they must also be

commercial with exceptional design

• The UK consumer is becoming more socially conscious and like to know where the

products are coming from. Tell the story behind the making of your jewellery!!

The UK Jewellery Market – Key Trends – Ethical Products

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The UK Jewellery Market – Working with Peruvian Companies

Communication

Quality Assurance

Customer Service

Honesty

Integrity

Long Term Relationships

Accountability

• UK Retailers expect support from their suppliers – it should be viewed as a partnership

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The UK Jewellery Market

Questions