Taiwan to Host International Jewelry Fair in 2013

Taipei World Trade Center, home of the new Taiwan Jewellery & Gem Fair.

UBM Asia, the Taiwan Jewelry Industry Association and the Taipei Jeweler’s Association will join together to launch the first Taiwan Jewellery & Gem Fair, which will be held Nov. 15-18, 2013, at the Taipei World Trade Center.

Described as “a high-end, professional jewelry event that aims to provide an opportunity for international jewelry suppliers to meet with local buyers,” the November timing of the exhibition was chosen because it is the time of year when jewelry retailers in Taiwan purchase inventory ahead of the busy Christmas, New Year, Chinese New Year and Valentine’s Day jewelry buying seasons.

The event will be held in Exhibition Hall 3 of the Taipei World Trade Center, located adjacent to the Taipei 101 Tower, the Grand Hyatt Taipei Hotel and situated in the Xinyi commercial district of central Taipei.

Taiwan has a strong jewelry manufacturing and processing industry that exports products around the world. Recently, there’s been a surge in tourists from Mainland China fueling an expansion of the domestic market. Chinese tourists are avid buyers of coral and jadeite jewelry. This has created strong demand from Taiwan’s jewelry manufacturers for loose stones, mountings and materials; and from retailers for finished jewelry, according to the organizers. This led to people calling for an international, professional jewelry exhibition in Taiwan.

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Consumers Online Spending Up 15% in Q3

Online retail spending for the third quarter increased 15 percent year-over-year to $41.9 billion, representing the 12th consecutive quarter of positive year-over-year growth and eighth consecutive quarter of double-digit growth, according to comScore, Inc.

Gian Fulgoni, chairman of the Reston, Va.-based company that specializes in measuring digital data, said the numbers are consistent with the prior quarter and confirm “the strength in the e-commerce sector, despite a few negative headwinds in the macroeconomic environment during the quarter. Such performance offers some optimism as we approach the holiday season, especially given recent improvements in consumer sentiment.”

He added, “With the housing market beginning to show signs of recovery in addition to increasing–if still underwhelming–job growth, there appears to be strong enough footing to support a very healthy online holiday shopping season.”

Other highlights from comScore’s Q3 2012 U.S. retail e-commerce sales estimates include:

* The top-performing online product categories, according to the survey were: Digital Content & Subscriptions, Consumer Electronics, Event Tickets, Apparel & Accessories, and Computer Software. Each category grew at least 16 percent year-over-year.

* About 37 percent of U.S. consumers say they have engaged in “showrooming” behavior where they use a smartphone while in a retail store to check prices or to purchase a product online, representing a 5-percent increase in the past two quarters.

* According to the survey, 48 percent of U.S. consumers now rate the economy as “poor” an 8-percentage point improvement vs. the prior quarter and the most pronounced improvement since early 2009.


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Tiffany & Co. to Open Flagship Paris Store on Champs Elysées

Rendering of Tiffany's planned store in Paris.

Tiffany & Co. said Tuesday that it plans to open a new European flagship store in Paris. The 10,000-square-foot, multi-level store will be located at 62, Avenue des Champs Elysées and is expected to open in 2014.

"This is a significant development and sales opportunity for Tiffany & Co. While we have been successful in operating three smaller stores in Paris, establishing this store on the Champs Elysées will be the ultimate symbol of Tiffany as a truly global luxury brand," said Frederic Cumenal, executive vice president, Tiffany & Co. "This is a preeminent location that firmly places Tiffany & Co. on an international stage, in the heart of a city where people from all over the world come to visit and shop."

The opening on the Champs Elysées will mark a new milestone in Tiffany's connection to Paris, which began in 1850 when the company established its first store. In 1999, Tiffany returned to Paris with a store on rue de la Paix.

In March, the owner of the rue de la Paix building that housed Tiffany’s Paris store, placed the property for sale. 

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Pandora Produces Charming Q3 Sales and Profit Gains

Danish jewelry company Pandora said Tuesday that third quarter revenue increased 14.3 percent, year-over-year, to DKK 1.79 billion ($308 million) with double-digit gains across all geographical markets. Net profit for the period increased by 11.4 percent to DKK 380 million ($65.2 million).

This is a strong turnaround when compared with second quarter results in which the company—best known for the manufacture, distribution and marketing of silver charm jewelry—said its sales fell by 9.5 percent to 1.26 billion DKK ($210.2 million) with profit during the same period down 89.9 percent to 63 million DKK ($10.5 million).

Pandora also said Tuesday that its stock balancing plan (replacing discontinued stock) is continuing as planned. In the third quarter, the company received returns of discontinued products with a wholesale value of DKK 86 million ($14.7 million), and replaced it with merchandising costing DKK 127 million ($21.8 million). In 2012 Pandora received returns of discontinued products valued at DKK 609 million ($104.6 million), and replaced DKK 599 million ($102.8 million).

Revenue by geographic region is as follows:

• Americas increased by 21.9 percent (9.5 percent in local currency), with U.S. sales up 15.8 percent (2.6 percent in local currency).
• Europe increased by 13.1 percent (11 percent in local currency).
• Asia Pacific decreased by 10.7 percent (17.3 percent in local currency).

Branded revenue as percentage of total revenue increased to 81.3 percent, compared with 73.6 percent in third quarter of 2011. Gross margin was 64.1 percent, compared with 73.6 percent in the third quarter of 2011.

EBITDA margin was 28 percent, compared with 34.2 percent in Q3 2011, a decrease of 6.2 percent to DKK 503 million ($86.3 million). EBIT margin was 25.8 percent compared with 32.2 percent in Q3 2011, an 8.5 percent drop to DKK 463 million ($79.5 million).

The company, which sells its jewelry through retail jewelers and its own branded retail stores, updated its outlook, saying it expects revenue for 2012 to be above DKK 6.3 billion ($1.08 billion), from its previous guidance above DKK 6 billion.

“I am happy to report that we continue to perform in line with our ‘18 months turn-around plan,’” said Björn Gulden, Pandora CEO. “Third quarter developed even a little better than we expected and we have, based on the tailwind from the currency development, decided to slightly upgrade our revenue guidance. One of our major initiatives ‘The stock balancing campaign’ was continued, mainly impacting the U.S. and third-party distribution, during Q3 2012. We have now largely concluded the campaign and it will, as communicated earlier, be finished by end of 2012.”

Gulden added its spring merchandise sold well and its fall merchandise had a strong start for the third quarter.

“The year is not yet finished,” he said. “We have our most important quarter to come, but we feel confident that our improved product, our lower prices and our other operational improvements will put us in the position of achieving our updated financial goals for the full year.”

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Georg Jensen Acquired by Investment Group for $140 Million

Georg Jensen Fusion Rings

Investcorp, a group that invests in what it calls “alternative products,” said Monday that it has signed a definitive agreement to acquire Danish luxury silver brand, Georg Jensen, for $140 million from private equity group Axcel Capital Partners.

With the sale comes a change in key personnel. David Chu, founder of Nautica, will join the company on closing as chief creative director and co-chairman of the Investcorp board. Also joining the board on closing will be Guy Leymarie, former CEO of DeBeers Diamond Jewellers, Cartier International and Dunhill.

Georg Jensen is a global luxury brand that designs, manufactures and distributes silver jewelry, watches, fine silverware and high-end housewares. With a history that spans more than 100 years, the Georg Jensen brand has a deep heritage in fine silver goods and represents quality craftsmanship and timeless designs.

“We are pleased to be entrusted with taking Scandinavia's preeminent luxury brand to a global level. We believe that in partnership with the current solid management team, said Hazem Ben-Gacem, head of Investcorp's European corporate investments activities. “Georg Jensen stands to become one of the leading hard luxury brands in the 21st Century.”

Georg Jensen was founded by the eponymous Danish designer in 1904. Today the business has 94 fully owned stores and three franchised stores around the world. The vertically integrated company has approximately 1,200 employees worldwide. In 2011, the company had sales of approximately $160 million. Georg Jensen is part of the Royal Scandinavia Group, which was bought by Axcel in 2001. 

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Montblanc’s Villeret Luxury Watches Keep The Minerva Soul

The home of traditional Swiss watch company now owned by luxury brand, Montblanc. Photo credit: Anthony DeMarco

VILLERET, Switzerland — In the Swiss watch industry, it could be said that the more things change the more they stay the same. This is particularly true for the watch company known today as “Montblanc Manufacture in Villeret.”

The company was founded in 1858 as the H. & C. Robert watchmaking factory by brothers Charles-Yvan and Hyppolite Robert inside the family house in this picturesque village on the edge of the Jura mountains. The company took on the Minerva name in 1923 and kept it for 84 years. 

Some of the components that make up a watch movement. All pieces are made in house in the Swiss watchmaking tradition. Photo credit: Anthony DeMarco

Almost from the beginning the company, which moved from its residential workshop to a true manufacturing facility across the street in 1887, produced in-house movements, particularly its chronographs that were so accurate and efficient they were used in the battlefields of World War I and II and to keep time for the events of the 1936 Winter Olympics. It was one of the first companies to produce a chronograph pocket watch, one of the first to produce movements for wristwatches, and one of the first to build a chronograph that could track hundredths of a second. The company also produced chronographs and classic watches for the general public. Needless to say the brand’s heritage and quality of their movements produced a loyal following.

A watchmaker creates one of the individual components of a movement. Photo credit: Anthony DeMarco

The company’s biggest change happened in 2000 when Italian investor Emilio Gnutti purchased it and changed its mission to produce haute horlogerie timepieces in-house using the same hand-made techniques and the philosophy of the brand. The new owner brought in Demetrio Cabiddu as its technical director. Then a change of seismic proportions happened in 2006 when luxury goods conglomerate, Compagnie Financière Richemont, purchased the company and from my understanding assigned the watch manufacturer to Montblanc—one of the many luxury brands it owns.

The balance spring (also known as a hairspring) is attached to the balance wheel to control the speed at which the wheels of the timepiece turn, and thus the rate of movement of the hands. These items are hand-made inside the factory. Photo credit: Anthony DeMarco

In the new atrium on the top floor of the historic manufacturing facility, Cabiddu, who is extremely passionate and protective of the company’s heritage, said he had some sleepless nights wondering what Montblanc, which was new to the staunchly traditional Swiss watch industry, was going to do with the company and its heritage. 

A skilled watchmaker attaches the balance spring to the balance wheel and then sets it over a timing device with a reference balance. She checks the difference in beats and bends the spring until they match.  Photo credit: Anthony DeMarco

“Of course I was very worried, I was scared,” Cabiddu said in French through a translator. “There was a need to preserve the heritage and credibility of Minerva and this 150 years of expertise.” He added, “People who don’t have fear are people who don’t have a conscience.” 

Some of the older equipment in the factory includes this large stamping machine. Photo credit: Anthony DeMarco

It turned out that there was no need to fear. Montblanc, the German company with its own 106-year history as a manufacturer of luxury writing instruments, not only bought into the legacy of Minvera, but in some cases expanded upon it. 

Another example of the early equipment that is still being used in the Villeret factory is this vertical drill. Photo credit: Anthony DeMarco

In fact, Montblanc’s inexperience in the Swiss watch industry “turned out to be an advantage,” Cabiddu said. “Montblanc trusted us. In hindsight it turned out to be the best choice.” 

Before Montblanc took control of the company, it was known for 84 years as Minerva. The toolboxes still carry the name and according to technical director, Demetrio Cabiddu, still maintains the Minerva heritage. Photo credit: Anthony DeMarco

There were some changes. Most obvious was the name change to reflect the location of the company. “Losing the name was a solution I had to take,” Cabiddu said. “Today I laugh about it a lot more. I used to cringe (when hearing the new name). In hindsight it was probably the right thing to do as we move into the future.” 

Two persons are dedicated to working with clients all over the world to create hand-drawn models of bespoke watches they would like to own. Photo credit: Anthony DeMarco

Montblanc also renovated the manufacturing facility. However, restoration is a better way to describe the work. Apart from the new, modern atrium with a view of the countryside, a fresh coat of paint and some structural repairs, little appears to have changed. 

Montblanc Collection Villeret 1858 Vintage Tachydate

Montblanc renamed the building the “Institut Minerva de Recherche en Haute Horlogerie,” and created a foundation under the same name, which Montblanc said in a statement is, “dedicated to classical fine watchmaking and the upholding of traditional skills and special complications,” adding that it “supports young watchmakers through internships, commissioning research on the history of traditional watchmaking and initiates new developments with traditional techniques in watchmaking.”

Montblanc Collection Villeret 1858 Tourbillon Bi-Cylindrique

It isn’t clear to me how this institute or foundation operates. What is clear is that it hasn’t changed the focus of the company. Villeret is a watch manufacturer that employs 36 full-time workers and four consultants and produces between 200 and 250 limited-edition hand-made timepieces per year, Cabiddu said. Everything is done in house with the exception of the dials, hands, straps and cases. 

Montblanc Collection Villeret 1858 Régulateur Nautique Timepiece

Large stamping machines and vertical drills that date back approximately 80 years share the building with modern CNC and CAD equipment. Some machines are so old parts aren’t available anymore so watchmakers have to hand-build the parts and even the tools to repair the equipment. The company produces chronographs, tourbillons and classic watch lines. In addition, it creates bespoke timepieces for private clients. Two designers are dedicated to creating hand-drawings of the timepieces based on specifications of these collectors. 

The company was founded in 1858 as the as the H. & C. Robert watchmaking factory by brothers Charles-Yvan and Hyppolite Robert in the house across the street from the current manufacturing facility. Photo credit: Anthony DeMarco

With its trademarked V-shaped bridge and a small arrow, the highly polished movements were always a site to behold. However, the outside of the watches were traditional and one dimensional. Montblanc added variety to the overall appearance of the timepieces, Cabiddu said.

The company, formerly called Minerva, was known for its chronograph movements. Here is some the company's earlier chronograph pocket watches. Photo credit: Anthony DeMarco

“Our movements were always beautiful,” he said. “Montblanc added a diversification of the aesthetic.” 

The company still does repair work on antique watches that were built prior to Montblanc's ownership of the brand. Photo credit: Anthony DeMarco

But still he describes the timepieces they make as “understated luxury,” and added that Montblanc’s own history shows that it respects and enhances this philosophy. “Montblanc is not really big with being in your face.” 

This philosophy of beauty could certainly describe the town that now shares the company’s name. Very little seems to have changed in the countryside outside the building, yet its prosperity shows that it is able to adjust to changes in the world while maintaining its heritage. Looking out from the atrium just across the street is the yellow-colored house where the watch company was founded more than 150 years ago, now occupied by a new family. Beyond the house cows graze on a sheet of green. Past the meadow are the Jura mountains covered with the flaming reds, oranges and yellows that represent the leaves of autumn on this late October day. If that’s not enough, above the cliffs in the powder blue late afternoon sky is a crescent moon.

It’s a scene that one could easily describe as understated luxury.

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Blue Nile Sales Up 19.8 Percent

Blue Nile said Thursday its net sales increased 19.8%, year-over-year, to $89.8 million for the third quarter due to a increases in all its product categories, including its new focus on fashion jewelry, and a large increase in new customers. However, international sales fell for the period ended September 30.

Operating income for the diamonds and jewelry Internet retailer totaled $2.7 million, representing an operating margin of 3 percent of net sales. Net income totaled $1.7 million, or $0.14 per diluted share. Non-GAAP adjusted EBITDA for the quarter totaled $4.8 million.

"We are excited to report solid results in the third quarter, with accelerating revenue growth and expanding earnings per share, said Harvey Kanter, president and CEO of the Seattle-based company. “The execution of our strategy is clearly on track. Investments we made in marketing and pricing are working and building momentum behind the strength of our diamond engagement products. Sales of our non-engagement products also improved this quarter, and we are only beginning to launch an assortment of new jewelry aimed to further accelerate our growth. With continued steady execution of our strategy coupled with exciting product offerings for the holiday season, we believe we are well positioned to achieve our goals for 2012.”

Among the highlights for the third quarter:

* U.S. engagement net sales increased 31.5 percent to $54.1 million.
    
* U.S. non-engagement net sales (a new focus for the company) increased 12 percent to $21.8 million.
    
* International net sales fell 3.3 percent to $14.4 million for the third quarter 2011. Excluding the impact from changes in foreign exchange rates, international net sales decreased 1.5 percent.
    
* Gross profit totaled $16.9 million. As a percent of net sales, gross profit was 18.8 percent compared to 19.8 percent for the third quarter of 2011.
    
* New customers grew 22.4 percent.  
    
* Selling, general and administrative expenses were $14.3 million, compared to $12 million in the third quarter of 2011.
    
* At the end of the third quarter, cash and cash equivalents totaled $30.2 million.

In its financial guidance, the company said it expects fourth quarter net sales to be between $140 million and $153 million, with earnings per diluted share are projected at $0.44 to $0.50.

For the fiscal year it expects net sales to be between $404 million and $417 million, with earnings per diluted share are projected at $0.70 to $0.75.

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