Retailscope

RAPAPORT... Luxury Retailers Face Challenges in China
Luxury retailers looking to penetrate the Chinese market increasingly need to find their niche and establish credibility as the market becomes more crowded and consumer awareness rises, according to “China’s Luxury Consumers: Moving up the Curve,” a survey of China’s middle-class luxury consumers by research company Taylor Nelson Sofres (TNS). Among the trends shown in the survey, TNS recognized strong growth in the market for accessories such as bags and jewelry, which offer more versatility and visibility to consumers with a limited budget for luxury. The report also showed a growing tendency among Chinese consumers to travel abroad with a set shopping list, “which underscores the need to build brand recognition in mainland China.” There was a strong shift in trends since the previous 2006 report, with more of an emphasis placed on “the need for individuality and the need for rich and indulgent experiences.” TNS received 902 qualified responses from middle-income earners between ages 20 and 44, spread between 15 cities.

House of Taylor Liquidates
House of Taylor informed the Securities and Exchange Commission (SEC) that it had entered into a “peaceful possession of collateral letter” with New Stream Secured Capital, acknowledging that it is in default under its financing agreement and giving New Stream possession of the company’s inventory and possessions. In the letter, the company acknowledged that it owed New Stream approximately $11.2 million, plus interest, expenses, attorneys’ fees, charges associated with the sale of the assets and other fees.

Jacob the Jeweler Sentenced to Jail
Jacob Arabov, a Russian-born New York businessman known in the hip-hop community as “Jacob the Jeweler” was sentenced to 2-1⁄2 years in federal prison for lying to investigators looking into a multistate drug ring. Arabov, 43, pleaded guilty in October to falsifying records and giving false statements as part of a deal with federal prosecutors. Arabov was also ordered to pay a $50,000 fine and to make a $2 million forfeiture payment to the government.

Arabov, also called the “King of Bling,” became popular among hip-hop and R&B artists in the mid-1990s. He was arrested in 2006 at his Manhattan jewelry shop. Authorities accused him and others of conspiring to launder about $270 million in drug profits for the “Black Mafia Family,” a ring that operated out of Detroit beginning in the early 1990s. Prosecutors dropped the money laundering charges in the plea deal. The seven-year investigation resulted in the indictments of more than 100 people nationwide, federal authorities stated. Arabov will report to prison on January 15.

Seiko Seeks $500,000 From Whitehall
Seiko Watch Corporation requested the immediate payment of $500,000 for watches sent to Whitehall Jewelers in June. In a 17-page suit filed with U.S. Bankruptcy Court against Whitehall, Seiko explained that the jeweler withheld information about its financial condition as merchandise was being ordered. The watchmaker contended that it later learned about Whitehall’s financial situation through public record and was “fraudulently induced to transfer the merchandise” to the company in two shipments 14 days before the jeweler filed for Chapter 11 on June 23, 2008.

Jewelry Channel To Fold
The Jewelry Channel will close its operations just 16 months after launching its broadcast channel over the airwaves and online, according to a filing with the Texas Workforce Commission. The company, which is not to be confused with Jewelry Television, started operations in April 2007 and was expected to bring 700 jobs to the town of Round Rock, Texas, by 2012. The station, owned by VGL Group of Jaipur, India, will lay off 106 workers on August 4.

Jewelry Television Sued for False Advertising
Jewelry Television is facing two separate lawsuits totaling $10 million for false advertising. The most recent suit was filed on June 5 by Theresa and Gary Hurd, who are seeking compensation of $5 million. According to court documents, the Hurds allege they received a “low-cost yellow or colorless stone” that had been given a “facelift,” rather than the “extremely rare” gemstone andesine-labradorite touted by Jewelry Television. Marliese Weed also filed a $5 million lawsuit against the network, claiming that Jewelry Television sold gemstones described as rare and expensive red or green andesine labradorites when the stones were actually colorless or yellow common feldspar that had been chemically treated. Weed’s lawsuit is seeking class-action status. Jewelry Television acknowledges that it has discovered one of its sources for the gemstone that treated the stone and claims to have shared that information with its customers.

Birks & Mayors To Launch Botswana Diamonds
Canada-based jeweler Birks & Mayors has partnered with Diamond Manufacturers Botswana (DMB) to exclusively distribute the Botswana Diamonds brand in North America. DMB is the Botswana manufacturing subsidiary of DIA Holdings, a Diamond Trading Company (DTC) Botswana sightholder. Birks & Mayors plans to officially launch DTC Botswana Diamonds in fall 2008 at its Birks flagship stores in Montreal, Toronto and Vancouver and at select Mayors locations in south Florida and Atlanta, Georgia.

Manfredi Jewels Expands
Over two hundred guests attended Manfredi Jewels in Greenwich, Connecticut, to witness the store’s expansive redesign and celebrate its twenty years in business. Manfredi Jewels’ new elliptical layout features “walls of watches” and an “island of jewelry.” To commemorate the twentieth anniversary, the company unveiled a limited edition watch produced by Glashütte Original. The timepiece has the Manfredi name engraved directly on the back. Each watch is hand numbered on the dial, as only twenty will be produced. The watches retail for approximately $29,500.

Hearts on Fire Opens First U.S. Store
The Hearts On Fire Company launched its first retail store in North America in Atlantic City, New Jersey, at the Shoppes at the Water Club. The store is owned by the company’s longtime retail partners, Harvey and Madalyn Rovinsky of Bernie Robbins Fine Jewelry. It is modeled after Hearts on Fire stores in Asia and offers a full assortment of the brand’s diamond jewelry, from bridal to fashion jewelry to couture.

De Beers Opens in San Francisco
De Beers opened a retail store in San Francisco in Union Square. The 2,659 square-foot-store is the seventh De Beers location in North America. The shop features new collections designed by company creative director Raphaele Canot, including Talisman, Ice on Fire and Radiance. Bridal, one-of-a-kind, high-end jewelry and signature collections are also available.

Tiffany to Open Eighth Store in China
Tiffany & Co. announced it will open an eighth retail site in China this month. The 2,000-square-foot store will be located in the luxury-oriented Hisense Plaza in Qingdao, a popular summer resort, and will offer diamond engagement rings, fine jewelry, watches and the designs of Frank Gehry, Paloma Picasso and Jean Schlumberger. Tiffany also operates two stores each in Beijing and Shanghai and one each in Chengdu, Shenyang and Tianjin.
The firm also unveiled plans to open a store in West London in fall 2008. The approximately 2,800-square-foot store will be situated in the new retail and leisure complex, Westfield London, due to open in White City. The store will feature engagement rings and the designs of Frank Gehry, Paloma Picasso and Jean Schlumberger.

Jewelry Web Traffic Rises
ComScore, Inc. reported an increase in online activity in the U.S. between April and May, driven by Mother’s Day, which gave the jewelry and luxury goods sector a boost. Content categories showing gains included a 9 percent increase in jewelry and luxury goods websites to 17.5 million visitors, a 15 percent jump in visitors to floral-related websites to 42.4 million and an 11 percent jump in coupon gifts sites to 24.5 million.

Ace Jewelers To Develop Ecommerce Site
The Ace Jewelers Group became the first jeweler in the Netherlands to use the internet as an additional sales channel when it signed an agreement with the leading Dutch ecommerce firm De Nieuwe Zaak to develop a luxury eboutique for watches and jewelry. The Ace Jewelers Group sells luxury watches, jewelry and accessories from three locations in Amsterdam.

Maliere Launches ECommerce Site
Maliere launched maliere.com, an ecommerce website specializing in eternity and diamond rings. Jewelry maker Ian Maher designs Maliere rings in his workshop in Dublin, Ireland, then a manufacturer in Besançon, France produces them. Items are shipped via Fedex and are returnable within five weeks.

Zales Adds Trend Column to Web Site
Zales Jewelers introduced a new fashion feature online called “Z Trends.” The monthly column will discuss the season’s hottest looks and give site visitors information on the selection of fine jewelry and accessories available at Zales.com. The first column highlighted pearls.

Reliance Jewels Opens in North India
Indian retailer Reliance Retail continued making strides into the jewelry segment by opening its third Reliance Jewels store in the country. Reliance Jewels launched in November 2007 with its first store in Bangalore. The company is planning to open approximately 300 stores in India during the next three years in an effort to capture about 10 percent of the local market. The new store is located in North India and encompasses approximately 500 square feet of space on two floors. Its product offerings include gold and diamond jewelry.

Article from the Rapaport Magazine - July 2008. To subscribe click here.