At the beginning of last year, the French luxury brand Chanel took the opportunity to commemorate the 90th anniversary of the birth of the first high-end jewelry series "Bijoux de Diamants", launched a new 1932 jewelry series, and carried out large-scale publicity in the Chinese market.
And in the past summer, the city of Shanghai was full of pearls reflected by high-end jewelry. Van Cleef & Arpels immediately launched a retrospective exhibition of "Van Cleef & Arpels : Time, Nature, Love" at the Power Station of Art in Shanghai after the city was unsealed, until October 7th.
In August, images of stars Shu Qi and Zhang Ziyi attending a high-end jewelery dinner at Italian luxury brand Bvlgari sparked a frenzy of discussion on social media, drawing attention to the high-end jewelery worn by the wearers. In addition to Bvlgari, brands such as Piaget, Tiffany, and Louis Vuitton have also recently held high-end jewelry-related activities or exhibitions.
It is not difficult to find that in the luxury brand jewelry market, a hundred schools of thought are contending, and luxury brands that started as high-end fashion have also begun to enter the jewelry field in recent years, launching Fine Jewelry (fine jewelry) and High Jewelry (high-end jewelry) series of products. Gucci and Louis Vuitton respectively invited Oscar-winning actresses Jessica Chastain and Cate Blanchett to endorse their latest high-end jewelry series this year.
What is puzzling is that in such a transformative year as 2022, when many people start to save money and tighten their pockets, why do luxury brands spend a lot of money in the jewelry market? Compared with traditional jewelry brands, what advantages does a luxury brand with fashion business as its core have when it starts making jewelry?
Luxury fashion brands, the difference between doing jewelry business
This year, the fashion-centric luxury brands under the LVMH Group have begun to vigorously develop products in the jewelry field. Dior is the first to release 137 pieces of the new Dior Print collection of high jewelry in Sicily, Italy.
Victoire de Castellane, artistic director of the Dior jewelry department, continues the iconic style of the brand's fashion into high-end jewelry. At the same time, he also collaborated with Dior Men creative director Kim Jones to create two seasons of men's high-end jewelry.
Then at the end of June, Louis Vuitton officially released the new Spirit 2022 high-end jewelry series. This is the fourth high-end jewelry series created by Francesca Amfitheatrof, the brand's artistic director of watches and jewelry, since she took office in 2018, and it is also the largest investment since the brand launched the high-end jewelry business line.
It is reported that the high-end jewelry series contains 125 pieces, which were carefully crafted by craftsmen in the Paris jewelry workshop for more than 40,000 hours.
Immediately after the 2022 autumn-winter haute couture fashion week held in July, Fendi, also a subsidiary of the LVMH group, held a haute couture show and released the brand's first high-end jewelry series Flavus. The series was designed by Delfina Delettrez Fendi, the artistic director of the brand's jewelry and the fourth generation descendant of the Fendi family.
In addition to the luxury brands under the LVMH Group, Balmain also launched two fine jewelry series of the brand for the first time in July this year, named Emblem and Labyrinth, with a total of 20 pieces. Creative director Olivier Rousteing has teamed up with fine jewelry manufacturer Adorisa Group to develop a line of fine jewelry.
Luxury brands with clothing as the core will try to maintain unity with the brand clothing itself in terms of style and design elements when expanding the brand's jewelry products. The Chanel brand, which entered the high-end jewelry field earlier, incorporated the brand's classic elements of camellia, diamond pattern, and Chanel N°5 into the design.
Elements of the brand's classic Monogram and the letter V also appeared in the Louis Vuitton high-end jewelry series. Art director Francesca Amfitheatrof particularly emphasized: "I have added V-shaped elements to many works...'V' is taken from the initials of Vuitton, which is shaped like an arrow. It is the earliest graphic symbol created by human beings, which can point out the direction and inspire us to move forward. ".
In addition, Dior turned the two-dimensional floral, geometric, and tie-dye patterns of fashion brands into three-dimensional high-end jewelry; Balmain incorporated the brand's B-shaped Monogram into jewelry design; Prada opened a high-end boutique in Beijing SKP last year. The jewelry pop-up store continues to use the brand's iconic triangle logo and names the jewelry series Prada Triangolo; after Gucci launched the high-end jewelry series in 2019, it also extends the fantasy retro, bustling and colorful design style of the brand's clothing to high-end In jewelry design.
At the beginning of the establishment of luxury fashion brands, most of them focus on clothing as the core of their business. For the brand, the high-end jewelry line belongs to the scope of business expansion. Therefore, it is necessary to ensure that the jewelry product series is in line with the brand's own positioning and style when designing. This is also consistent when luxury clothing brands expand other product lines. For example, when Prada Beauty launched its first perfume, the bottle body is also the brand's iconic triangle element.
In addition, compared with traditional jewelry brands that started out in the jewelry business, fashion brands do not have relatively comprehensive and complete professionalism. Therefore, most of them will choose to cooperate with some jewelry manufacturers, or poach executive positions from other jewelry groups, and hire people with resources, experience and deep industrial chain in the field.
Alessandro Michele said in a recent interview with WWD that fine jewelry is complicated for a fashion and accessories company, but Gucci relies on a network of major Italian jewelry craftsmen, such as Gioielli di Valenza, a traditional Italian goldsmith group.
The aforementioned Adorisa Group, which jointly develops the fine jewelry business with Balmain, its founder and president François Delage is the former CEO of the jewelry brand De Beers. Balmain took a fancy to his experience in the fine jewelry manufacturing industry to make this happen cooperation.
Francesca Amfitheatrof, the artistic director who developed this Louis Vuitton high-end jewelry series, is also a veteran in the jewelry field. She joined Louis Vuitton in April 2018. Before that, she worked for Tiffany for 5 years. She is the first female creative director of Tiffany since its founding in 1837, and the shaper of the most famous "T series".
It can be seen that when fashion luxury brands vigorously develop jewelry product lines, they not only need to ensure that the original style of the brand is maintained, but also continuously deepen the brand’s professionalism in the field of jewelry by hiring professionals or cooperating with related groups. However, what kind of attraction is it that makes luxury brands spend a lot of money in the jewelry industry in recent years? With the soaring inflation rate around the world, what is the rationale for the jewelry industry to go against the trend?
Under the unstable situation, why brands are vying to deploy the jewelry market
It seems that it has become a norm for fashion luxury brands to expand jewelry products, which is inseparable from the huge business potential of the jewelry market in the future.
Looking at the global jewelry market, the market research consulting company Grand View Research pointed out that the global jewelry market size will be 249.02 billion US dollars in 2021, and it is expected to grow at a compound annual rate of 8.5% from 2022 to 2030. In addition, a report by Business Wire predicts that the global jewelry market size is expected to reach USD 459.43 billion by 2030.
At the same time, consumers' enthusiasm for purchasing jewelry products is also growing. According to Grand View Research, 30% of consumers worldwide have bought more jewelry during the COVID-19 pandemic. In China, according to the latest data from the National Bureau of Statistics, in July 2022, retail sales of gold, silver and jewelry will increase by 22.1% year-on-year, making it the fastest growing product among social consumer goods.
Through the above data, it is not difficult to find that when the economy is in recession, the light of jewelry products shines even more. In fact, this situation is not the first time in history.
After "Black Thursday" in 1929, inflation and unemployment soared. Three years after the world fell into the Great Depression, Gabrielle Chanel cooperated with the London Diamond Union to go against the pessimistic and depressed economic environment and launched Bijoux de Diamants, the first diamond jewelry series of the Chanel brand. This is also Gabrielle Chanel's only jewelry collection.
She herself said: "The best way to forget the crisis is to let the eyes enjoy beautiful new things. For this reason, our craftsmen are unremittingly pursuing with their superb skills." Stocks soared, shocking the industry. Some of the works were sold on the first day of the exhibition, and only a few remaining pieces have survived to this day, becoming witnesses of this series.
90 years after the launch of the Bijoux de Diamants jewelery collection, 14 pieces from the collection were presented this year with the recent Haute Couture Week in July.
The phenomenon of the jewelry industry shining during the recession is inseparable from the simultaneous widening of the gap between rich and poor. Vogue Business has previously reported that the widening gap between the rich and the poor actually provides a hotbed for luxury brands to increase their income.
According to the World Inequality Report 2022, the poorest 50% of the global population have just €2,900 per adult (in purchasing power parity terms), while the richest 10% have about €190 times.
The richest 10 percent receive 52 percent of current total income, while the poorest 50 percent receive just 8.5 percent.
The "2022 Hurun Global Rich List" released by the Hurun Research Institute also pointed out that the number of entrepreneurs worth $1 billion in the world has hit a new high, with an increase of 153 people, and the total number reached 3,381. With the increase of the super rich, the luxury goods industry, which was originally only engaged in the business of the elite and the rich, has smelled business opportunities.
Francis Chan, a practitioner in the jewelry industry, said that luxury brands began to vigorously develop the jewelry industry "should want to seize customers of high-end jewelry, and the consumption power of these customers will be a hundred times stronger than ordinary customers."
In addition, the gross profit margin of the jewelry industry is extremely high. According to the fashion information platform Threadcurve, the average gross profit margin of jewelers is about 43% to 47%. Luxury brands have higher gross profit margins because they already enjoy brand awareness.
In this regard, Francis Chan also mentioned that high-end jewelry "the unit price is high, and the profit is also high." Therefore, the huge profits of jewelry products are indispensable for the future development of luxury brands.
In the investor briefing in June, Kering Group set the mid-term target of the group's largest Gucci brand as annual sales of 15 billion, and plans to continue to expand the proportion of high-end products, such as rare leather handbags, customized shoes, and Mentioned the group's newly opened high-end jewelry line in 2019.
According to the 2021 financial report, jewelry and watches account for only 6% of Gucci’s revenue. Therefore, for Gucci, there is still a lot of room for growth in high-end jewelry products.
In recent years, luxury brands have been continuously expanding their brand categories, ranging from high-end jewelry to beauty, catering and other industries, and trying their best to bring back other industry lines to the brand itself, choosing to increase brand control and revenue through self-operated methods. The allocation value of jewelry as an anti-risk asset is unmatched by other industries mentioned above.
The article of China Colored Gemstone Network pointed out that even during the extreme Great Depression of the American economy from 1930 to 1932, the residual value of holding jewelry was still more than twice the residual value of holding stocks. Therefore, although financial assets face the risk of shrinking market value, jewelry products, as "hard luxury", are out-and-out anti-risk assets because of their scarcity.
This can also be reflected in the annual sales of jewelry products of Richemont Group, a fashion luxury group known for its "hard luxury". Richemont Group released the Group’s 2022 fiscal year performance report in May this year, disclosing that sales as of March 31, 2022 increased by 44% at a constant exchange rate, recording 19.18 billion euros, of which the total sales of the jewelry department exceeded 11 billion euros , more than half of the group's total revenue.
At the same time, through the recent cooperation with Farfetch and the experience of the latter in the e-commerce platform, Richemont Group has also begun to accelerate the online sales of the group's jewelry brands and further develop the online jewelry business.
With the increasing consumer demand in the jewelry consumer market, luxury brands with fashion as their core business not only expand their categories to some relatively "democratic" products, such as beauty makeup, fragrance, coffee, etc., but also launch branded jewelry one after another. line products. This is not only because jewelry products can fill the existing development space that the brand needs to improve, but also because of the fact that with the increase of income inequality, the number of super rich is increasing day by day.
The jewelry industry is lucrative and has a certain anti-risk investment value; in the current situation with many unstable factors, this is a business that luxury brands can get involved in and has a relatively long-term stable value. then go In the future, whether the high-end jewelry business of fashion luxury brands will have an impact on the existing business of traditional jewelry brands still needs to be waited and watched.
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