Another year is drawing to a close, which means it’s time for my annual review of the jewellery industry’s highs and lows.
As usual, it was a year full of surprises, revelations, shocks and, in some cases, plain stupidity. No wait … this year there were even more surprises, definitely a greater number of shocks and believe it or not, increased stupidity. All in all, I’d say it has been an excellent year.
In 2014, a great deal of important news occurred. There were sadly at least four high-profile businesses placed in administration and/or liquidation and some frightening robberies. On a positive note, the JAA appointed a new executive director who took up the role in July and we also reported a number of new businesses being launched to fill the gaps left by others.
Along the way we had instances of wild and outrageous rumours about certain people and businesses. Some we reported and some we didn’t, or couldn’t.
Was there, for example, an AFP raid in Sydney? What’s the story behind a man and a bikini and who is the secret and clandestine supplier behind a diamond jewellery collection? Perhaps time will tell on some of that goss … or maybe it won’t.
Regardless of this, we’ve attempted to report on the important issues affecting retailers and the wider jewellery industry and at the same time have a little fun along the way.
We hope you enjoy our last effort for the year before closing for the break.
May we present 2014 Hits & Misses – and, if after reading our end-of-year wrap-up, you’re left scratching your head, no it’s not lice … it’s simply the jewellery industry!
If we can’t laugh at ourselves, who can we laugh at?
The Jeweller team wishes you an excellent Christmas and New Year trading season.
We’ll be back on deck mid-January. Will you be ready for some surprises, or even shocks, early in the new year?
You should be, and that's a tip!
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It’s fair to say this award category pretty much chooses itself each year. I mean it’s an odds-on bet that there will be at least one major unexpected event in a 12-month period.
And so it was that for the past two years, the Biggest Surprise was awarded to Karin Adcock – in 2012 for suddenly calling it time in the industry and then last year when she shocked the trade by announcing her return in August.
However, this year I have been confronted with two entries for the Biggest Surprise award! What to do, huh?
It would be too easy to give the award to Karin Adcock once more – for the third year in a row – for surprising the jewellery industry yet again by announcing in January that her new company, House Of Brands, would exit the industry only five months after her return.
Yes it was a short stint, much shorter than even the most ardent critics expected, but one winner for three consecutive years would be getting a little silly. So rather than taking the easy road, this year’s Biggest Surprise award goes to Michael Mishevski – the former CEO of Showcase Jewellers.
Readers will remember that it was in June when the astonishing news broke of Mishevski being asked to stand aside while an investigation was conducted into matters relating to the buying group’s operations. Mishevski had been with Showcase for nearly two decades.
The rumour mill went into overdrive – aided and fueled by the Showcase board’s position of “no further comment” on the controversy. On second thought, overdrive is probably an understatement given that the official statement by George Proszkowiec, chairman of JIMACO, the operating company for Showcase Jewellers, read: “The matter seems to have been precipitated by issues raised by the group’s external auditors.”
The gossip-mongers went crazy and when Mishevski subsequently resigned from the company one month later – still with no explanation by him or the board – this author had to field-off many wild rumours.
A little bird told me that not only was a Confidentiality Agreement signed but that the settlement also included Non-Disparagement provisions. In other words, both parties had to be nice to each other and shut up, and that’s exactly what they did, leaving the industry to guess the problems and allowing riotous speculation to continue.
However, it didn’t end there. There was a second surprise to come.
As if to stir the pot or simply because he was bored – he had been out of a job since June after all – Mishevski rocked up to the Sydney Trade Fair in late August. Walking the aisles with his trademark smile, he greeted people as if nothing had happened and the whole saga had been an industry dream.
I guess the best form of defense is offense!
Result: Miss … as in, the full story is still missing.
2013 - Karin Adcock shock return to the industry
2012 - Pandora’s Karin Adcock calls time
2011 - Indian jewellery company buys Zamels
Have you ever heard of the Cobra Effect? No! Well you probably know about the Law of Unintended Consequences, right?
Before I explain, let me say that this award category is not one that is coveted by the jewellery industry, and you only need to look at the three previous winners to see why. It’s hard to beat last year’s recipients, Roger and Georgette Aznavorian, who were charged with stealing 180 jewellery pieces valued at $2.4 million that were left at their store for repair, valuation or adjustment.
I mean, how many times can you tell your customers, “Umm, we lost it”? Apparently at least 180 times!
But … back to this year’s award? Over the years I have become a “student” of the Law of Unintended Consequences – outcomes that are not those that were intended by a purposeful action. That’s because, with hindsight, you’re always left asking: what were they thinking?
Such is the case with the Cobra Effect, which ironically originated in India. You see the Indian government recently had a problem with its current account deficit; the value of imported goods was far higher than the country’s exports.
Confronted with an economic crisis, the Reserve Bank of India believed the best way to tackle the problem was to introduce a new scheme that would have a major impact on the local jewellery industry. The government established the 20:80 scheme that placed restrictions on gold imports.
The policy mandated that 20 per cent of all gold imports would be reserved exclusively for export purposes, while the other 80 per cent would be made available for domestic use. But as anyone would know, the only thing Indians love more than a good curry (and cricket) is gold, and so it was that the 20:80 scheme immediately set in train a modern-day Cobra Effect.
The Cobra Effect is a term used when a solution to an economic or political problem actually makes that problem worse. It originates back to the British rule of India when the government of the time was extremely concerned about the number of deadly cobra snakes in Delhi.
I could just imagine some bright spark coming up with the perfect solution: “I say my dear chaps, I have a magnificent idea. Let’s offer the locals a bounty for every dead cobra. Hip-hip and jolly good! What do you good fellows think?”
It was, at first, a very successful strategy as large numbers of cobras were killed for the reward. But I am sure my more astute readers have already seen a problem. The story goes that the naive British soon discovered that their more creative and entrepreneurial “subjects” quickly began breeding cobras for income. So, rather than decreasing the number of poisonous snakes, a government policy was increasing them!
Could it get worse? Yes!
When the government realised what was happening, the reward/bounty program was immediately scrapped, causing the resourceful cobra breeders to set the now-worthless snakes free. As a result, the wild snake population quickly increased – hence the Cobra Effect.
So how does the 20:80 scheme fit in here? Well, just as the cobra bounty made the problem even worse, the 20:80 scheme designed to reduce gold imports was scrapped by the Indian government because it quickly increased gold smuggling.
One hundred years later and the Indians still haven’t learned anything from the British; there was illegal gold everywhere.
Apparently excess baggage charges at Mumbai airport skyrocketed too!
I mean, seriously! What were they thinking?
2013 - Jewellers steal $2.4 million from own store
2012 - Zamels, making the same mistake twice!
2011 - John Abolins and Jewellery World, for making the same mistake twice!
Each time I compile and write this category, I’m already wondering how a story next year could possibly top any of those that have already occurred. Some of the stories are so absurd that even I’m left scratching my head – which says a lot when you consider that many people think we make up some of our stories. Never let the truth get in the way of a good story, right?
Remember the Lesbian love triangle, for example? Or, think back to last year where we had the two “rocket scientists” who attempted to break and enter a Queensland jewellery store only to find themselves in the KFC store next door.
Nothing ceases to amaze me anymore and if I ever need help with a complex matter – or even a simple one – I wouldn’t call on Mr Peter Welsh or Mr Dwayne Doolan for assistance.
They confuse gold nuggets with chicken nuggets!
We find ourselves with two contenders for our 2014 WTF OMG award and, like last year, they involve jewellery robberies.
First up we have the jewellery thief who was identified by DNA analysis after giving an apologetic kiss on the cheek to the woman he just robbed before fleeing the scene. It would be funny had he not previously poured petrol over her as a threat to open the safe. Thankfully, the police caught him from the DNA evidence left after his departing smooch.
While that story most certainly fits the criteria, we have given the award to the citizen whose detective work led to the investigation of a jewellery store suspected of stocking and selling stolen goods valued at approximately $2 million.
The story started when a woman tried to locate 25 pieces of jewellery that had been stolen from her house.
Hell hath no fury like a woman scorned ... and robbed of jewellery.
2013 - KFC jewellery store finally unlucky
2012 - Lesbian love triangle
2011 - Stupid online poll
Over the years we’ve had some amazing industry punch-ups. The first two years of Hits & Misses, 2011 and 2012, were massive, though last year I declared the Best Punch Up as being a little more like a family squabble than a fight.
However, we are back on track this year given that we have so many from which to choose. For example, we have the Tiffany & Co v Costco fight over the ownership of the term “tiffany setting” and Cartier taking a punch at the World Gold Council. Tiffany had another huge tiff (pun intended!) with Swatch and had to pay $495 million in damages over their failed engagement. Ouch!
But they all pale into insignificance when compared to the more recent World Title Fight – Martin Rapaport v The Diamond Industry.
The battle, perhaps better called a cage fight, is even more interesting because there are no internationally accepted rules governing it. Indeed, this brouhaha could go on forever because there isn’t even a referee.
Think about it, even those ugly cage fights on TV have a couple of rules such as “no biting” and “no Hopoates” but how can you adjudicate over an issue that is, effectively, “he said, she said”.
The heavy weight bout regarding the rights and wrongs of diamond grading, which started around September, will surely take a break over Christmas and resume in 2015, so stay tuned. There’s certainly more biffo to come, the only question is: will the legal teams enter the ring?
As an interesting aside, our more judicious readers will recognise this is not the first time that Martin Rapaport and his trading network RapNet have been connected to Jeweller’s Best Punch Up award. Unlike in 2012 though, this year he is accepting the prize first-hand rather than via a third party.
Result: Hit ... as in KAPOW!
2013 - New jewellery group emerges
2012 - Jewellery Association creates its own furore
2011 - New Zealand jewellery industry for a year-long punch up
I will admit it was always going to be tough outdoing last year’s winner of Say What?
You may recall that industry magazine Jewellery World published a 16-page report called Hot 100 Suppliers, with the editor explaining, “We asked our readers to tell us who their best suppliers are – and the votes are now in”.
All good until an avid reader noted that the list of “Hot 100” suppliers only numbered 70!
Could it get worse? Yes! One of the suppliers Jewellery World defined as “hot” was listed in two “best supplier” categories; the only problem was that the owner had already closed the company. Say what?
Confusing? You bet! Bad maths? Well, they are journalists!
So who could outdo Jewellery World this year? Well it could have been the collapse of Bevilles jewellery chain. After 80 years in business it suddenly went into administration in April. Then started up again a few weeks later. Say what?
Or it could have been the news that Miller Diamonds unexpectedly collapsed? That deserved a say what?
Nope! Neither of them wins this year’s award because there was nothing more confusing than the status of Diva – the 500-store Australian fashion jewellery chain.
You see, while the news about Bevilles and Miler Diamonds caught many off guard, there was no confusion about what was happening, however, over at Diva, no one knew what was going on, least of all the staff.
Was Diva closing or not? It was a simple question, right?
And surely with so many rumours going around you’d expect the company’s head office to issue a statement, but nope! Company management remained silent!
In consequence, some Diva staff were telling customers that all stores were closing, and others were advising that only some stores were closing. Then, according to other staff, some were changing to Diva’s “sister” chain Lovisa. Some staff even said new stores were actually opening and there were reports of a new retail business entirely.
It was just like Abbott and Costello's Who’s on first, What’s on second?
While all this was going on, the company’s Facebook page had scathing criticism from its customers who were trying to use their gift certificates at stores that didn't exist. And yep, you guessed it … the Facebook posts were left unanswered by Diva’s social media team.
Or maybe they had been closed too!
Result: Miss ... Hello! Is anyone home?
2013 - Jewellery World Top 100 List only includes 70!
2012 - Man swallows diamonds at trade fair
2011 - Second place to Kiwis
Each week we showcase the latest and greatest jewellery and watch products hitting the market and in 2014 well over 300 were featured from a wide range of suppliers, both large and small.
As has been the case in previous years, while the high profile international brands like Pandora, Thomas Sabo, Hot Diamonds and Guess featured well; smaller home-grown brands often caught our readers’ attention.
Indeed, this year’s most popular new product was a ring from Melbourne-based TWM Co.
It should be remembered that the list is compiled by gauging reader interest via online views and is not indicative of anything other than reader curiosity. It is not a measure of sales but it nevertheless does show the wide range of product that captures our readers’ attention.
The Top 10 were:
- TWM Co
- Story Jewellery
- Pink Kimberley
- Disney Couture
- Pearl Perfection
- Thomas Sabo
- Broken Bay Pearls
- Effy Jewellery New York
2013 - X by Trollbeads
2012 - Pandora
2011 - Ice-Watch
* The measurement process also takes into account the length of time each story has been published on jewellermagazine.com and attempts to be a statistically relevant measure of reader interest.
This award gets more ridiculous each year and 2014 is certainly a real doozy! But before I reveal the winner, let’s take a quick trip down memory lane. You may recall there was the person who believed a great way to promote a jewellery brand was to douse a beautiful woman in petrol and set her alight?
Or what about the guy who swallowed the diamond rings? And don’t forget the famous and reclusive Kiwi journalist, Mr Ken Ramauti, remember him?
Ramauti shot to fame in 2011 when he declared that he was writing “an investigative article” about the New Zealand jewellery industry but no one seemed to know him.
He disappeared as quickly as he “arrived”, leading many to believe he was actually the famous Dick Diver masquerading as Ken Ramauti. Given Dick Diver is actually a fictitious character, like Ken Ramauti, we were all left none the wiser.
Mind you, there was a rumour doing the rounds earlier this year that the legendary Kiwi Ken (or Dick) had taken-up jewellery making and was entering the Australasian Design Awards with a pendent design in the Apprentice category – a diamond encrusted Dodo bird – but no such luck.
Unfortunately Ken’s “investigation” into the Kiwi jewellery industry never eventuated and I haven’t heard from him since he won the 2011 Hits & Misses award – Ken, come out, come out wherever you are.
Never mind, this year we have an equally intriguing jewellery industry journalist: the backyard chicken farmer and avid cat lover!
I kid you not, but first a little background …
These days, Jeweller staff are quite used to our stories being referenced by, or linked to, other industry magazines and websites. We have no problem with that and it’s quite gratifying to know our stories are so well respected that they’re referenced by international media organisations.
We too occasionally reference stories from other magazines and as responsible journalists we provide relevant attribution to the original media source. There are well-accepted protocols regarding copyright infringement, plagiarism and fair use among the professional media. In short, a journalist should never take someone else’s research and original writing and publish it as their own.
Fair enough, right? Well, imagine our surprise when Jeweller’s stories suddenly started appearing on our competitor’s website with no reference, attribution or link back to jewellermagazine.com. The content was being presented and published by Jewellers Trade as its own original research and work.
Imagine our further surprise when we discovered that the so-called "author" of the stories lives in Oklahoma, USA and promotes herself as a “backyard chicken farmer and avid cat lover and jewelry maker”.
Weird right? Well that’s exactly what happened in April. In fairness to our colleagues at Jeweller’s Trade, the offending content was quickly removed from its website after cease and desist emails were sent to editor Ms Jo Thomson and directly to the US backyard chicken farmer and avid cat lover herself.
(It was interesting to note that many other stories were also quickly removed after Jeweller's emails.)
Fair’s fair – if you aren’t going to take the time to research and write your own original stories, then don’t pretend that they’re yours. Maybe the backyard chicken farmer, avid cat lover and jewellery maker could get together with New Zealand's investigative journalist, Ken Ramauti, next year for one-on-one interviews with each other.
Result: Miss … as in, caught out.
2013 - Australian thief swallows diamond ring
2012 - Ellani Collections gaining 1,000 Facebook fans
2011 - Who is Ken Ramauti?
Selecting a winner for this category has traditionally been quite easy. We have had some notable winners over the years – including one person who took out the prize two years in a row – but 2014 proved to be a tough one. There are a few contenders.
For example, it could go to the Petra Diamonds’ Cullinan mine for discovering a 232-carat white diamond. Afterall, that’s an impressive number of carats.
Arguably, we could win it ourselves for when Jeweller magazine became the most popular industry publication on Facebook. We reached the #1 position in May, outdoing all UK and US magazines.
Jeweller’s own “good number” had increased to 20,000 by September and should close the year at 25,000 – by far and away the largest follower base of any jewellery industry magazine on Facebook.
But we can’t give an award to ourselves, can we? It would be like something out of Yes, Minister!
So perhaps it could be awarded to the person who paid $20 million for a 392.52-carat Ceylon sapphire, said to be the fourth largest faceted sapphire in the world. It established a new world auction record.
You see why it’s a difficult choice?
Having pondered this for a few days, I think 3,653 is a really nice round number, don’t you?
That “good number” came about in February after the US retailer, Signet Jewelers, announced it would acquire its long time rival Zale Corporation.
The deal was said to be worth US$1.4 billion (AU$1.7 b) and would result in one entity owning or controlling a total of 3,653 jewellery stores throughout the US, Canada and the UK.
Think about it for a moment. Most suppliers would be over the moon to secure one account with 653 stores, let alone 3,653. That’s a good number.
2013 - Jewellery chain collapses owing $3 million
2012 - Ex Pandora man to launch “clicks and mortar” stores
2011 - Young Jewellers Group
This category has largely dealt with thieves and robbers in previous years; making a hopeful declaration that they were all in jail. This was certainly true in 2013 when the final participant in the infamous lesbian love triangle was given a seven-year sentence.
We have attempted to update one robbery story this year. Readers might recall the bizarre case last November of the Brisbane man, David Watts, who decided to swallow two diamond rings valued at $59,000 at the Crown Family Jewellers at Indooroopilly Shopping Centre.
While one of the rings was eventually passed (recovered), the $35,000 ring never appeared. It’s believed it was accidently discarded by a police officer – who later found himself in more poo for losing the ring. Jeweller understands that Watts is still awaiting sentencing.
In more positive updates, after the collapse of Miller Diamonds, Lonn Miller was appointed NSW general manager for Melbourne-based Australian Diamond Trading Corporation.
His brother Craig, meanwhile, was appointed by Showcase Jewellers to lead the re-launch of the Passion8 diamond brand, which the buying group purchased from the Miller Diamonds liquidator.
And while on Showcase, former CEO Michael Mishevski appears to still be on “sabbatical”, though it’s rumoured he’s considering opening a jewellery store. One wonders whether the new store will join one of the three buying groups and, if so, which one?
Result: Miss, hit, hit and unknown
2013 - CFO jailed for defrauding jeweller
2012 - Motorcycle smash and grab
2011 - Diamond Exchange
Pallion (just arrived)
Apple Watch (premature!)
House of Brands (jewellery division)
Bolt International / Lola and Grace
Designa Accessories / Trollbeads
Coeur de Lion / Timesupply
Georgini / Chrysalis
House of Jewellery / Australian Jewellers Supplies
Designa Accessories / Kate Spade
Time Essentials / Harley Davidson watches
Showcase / Passion8
Julie Sandlau / House of Brands
byBiehl / House of Brands
Near death experiences*:
Storch & Co
* New category
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