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Jeweller ends 20-year relationship with JAA

After 20 years of sponsoring the Jewellers Association of Australia (JAA), it is time for a change. Gunnamatta Media, publisher of Jeweller, has advised the JAA of our intention to end a relationship that first began in 1996.

Given that the magazine has ‘sponsored’ the JAA for more than two decades, it is appropriate to explain to our readers and the wider industry why we have decided upon this course of action.

Since I first launched Australian Jeweller – as it was known back then – more than 20 years ago, the magazine has provided financial support to the JAA with cash and ‘kind’ – marketing-related services, such as advertising space – to the tune of hundreds of thousands of dollars.

Such sponsorship agreements for industry associations are not unusual; the JAA receives financial support from Marsh Insurance and, until last year, it also received financial assistance from Expertise Events, the organiser of the International Jewellery Fair (IJF) and the Australian Jewellery Fair.

Over the years, the JAA has had similar arrangements with many other businesses – think DCLA – but those relationships did not last long for one reason or another. Only sponsorship agreements with Marsh, Expertise Events and Jeweller have stood the test of time.

Of these three agreements, each began at a different time and for different reasons and yet each company would have made its decision in the belief that businesses that service an industry should also support that industry.

I know Jeweller believed that and I have no doubt Marsh and Expertise Events would have had similar views. Industry associations effectively have two major sources of income – membership fees, which represent their core activity, and sponsorship income in various forms. The job of an industry association is, first and foremost, to represent its members.

Our current five-year contract concludes in April so late last year the JAA requested to begin negotiations on a new agreement.

Continuing membership decline

It’s no secret that we, and others in the industry, have been concerned about the management and direction of the JAA for some time. All associations and businesses have blips along the way but the number of people who have raised concern about the JAA’s direction and some of its decisions has become too many to ignore.

It's also no secret that membership has been falling year-on-year to the extent that, according to the JAA’s own financial reports, at one point annual staff costs became greater than annual membership income.

In other words, JAA membership income wasn’t sufficient to cover staff expenses, let alone other outgoings such as admin and tenancy costs.

Put simply, the JAA is losing members.

To be fair to the JAA, times have changed and the internet and digital era have called into question many things, including the role and purpose of industry associations. The membership of many trade-related associations is declining.

I have previously written about a colleague who raised the question: Are industry associations still relevant and do we even need them? He suggested that one of the traditional roles of an industry association is to encourage people to communicate and network on important issues and that social media now facilitates this far more effectively and easier than before.

While I did not agree with all his views, he raised the undeniable fact that retailers and suppliers can gain better benefits by other means, such as joining a buying group.

Perhaps this is why the majority of jewellery retailers choose not to join the JAA. The three major buying groups arguably offer more value, assistance and support to jewellery retailers than the JAA and so it makes perfect sense that the combined membership of the three buying groups outstrips the number of JAA retail members.

Don’t get me wrong, there is a need for an industry association, provided it’s the right association being managed in the right direction.

Independent review

I have previously called for changes at the JAA – in late 2014, I wrote that the previous two to three years had been an inglorious period for the JAA office and I called for an independent review of the CEO position following the decision not to renew the contract of former CEO Ian Hadassin.

As the world evolves, jobs change. It's also true across many industries that sometimes association staff outstay their welcome and their contributions to their chosen industries diminish. Over many years, numerous JAA boards have mismanaged the CEO role.

Indeed, it’s understood that one former CEO once had to be physically removed from the building. Some years later, the JAA board ignored another CEO’s daily alcohol intake during work hours for far too long but not before enormous disharmony prevailed. Privately, some former JAA board members admit that many mistakes were made during that time.

Amanda Hunter, JAA executive director
Amanda Hunter, JAA executive director
Selwyn Brandt, JAA president
Selwyn Brandt, JAA president
Following these problems, was there an independent review of the JAA office and structure? No.

Instead, in June 2014, the JAA appointed Amanda Hunter as its executive director and a media release at the time stated she would bring "27 years of business experience across a range of levels along with an astounding subset of skills".

Hunter also said she would "bring strong business skills to manage the organisation and take it forward strategically".

She added, "Growing the JAA whilst helping the members also grow their businesses is very appealing and fits well with my past coaching and sales-management experience."

I was cautious. I acknowledged a few months into her tenure that Hunter had gotten off to a good start but noted the strong industry expectation that a fresh-faced industry outsider was necessary to re-unite a somewhat fractious industry and reinvigorate the trade.

On the subject of ‘growing’ the JAA, I also noted that Hunter's success would be measured in membership numbers and that pandering to the vocal minority would be the wrong strategy if seeking to reunite the industry.

Nearly three years after Hunter’s appointment, where are we now?

Well, membership continues to decline and many long-term retail and wholesale businesses have deserted the JAA for various reasons. Large suppliers like Pandora have quit and retailers who have been JAA members for decades have also resigned.

A year to forget

Looking back, last year did not start well.

In February the JAA announced the 2016 edition of its biennial Australasian Jewellery Awards then cancelled them just one month later because of lack of sponsorship.

It was an embarrassing decision because the JAA had two years to secure the sponsorship and failed, in part because the 2014 Awards night was not perceived as a glowing showcase of the industry – there were sponsors and entrants who were extremely unhappy about the night and one jeweller told me he would never enter again.

There were also problems with the Awards’ format, which generated some industry debate, but the JAA steadied and recently announced the 2017 Awards with a list of sponsors.

Alas, worse was to come after the Awards embarrassment. In May, after a 25-year affiliation with Expertise Events, the JAA informed the industry that it would run its own trade fair in direct competition with the Expertise Events show.

Not only did the JAA walk-away from a guaranteed $100,000 in cash sponsorship plus additional non-cash support, but also the JAA’s decision caused a major rift among suppliers and retailers.

Suppliers were now being asked to exhibit at two fairs on the same days in the same city to service the same buyers.


Background reading: Sydney jewellery fair organiser hits back at JAA


Understandably, they were up in arms. Many complained that the JAA, a membership-based association, had overnight become a trade-fair business and that putting member’s funds at risk with a large commercial venture was not appropriate. Additionally, one also had to ask whether it had the resources or infrastructure to do so.

It was a bold move because it meant the JAA needed to generate a substantially larger profit than $100,000 just to be in the same position with the Expertise Events sponsorship, and for which it had to do, effectively, nothing.

A media release issued on 23 May about the ‘2017 JAA Jewellery Fair’ declared, "This landmark announcement is being delivered amidst great excitement, after detailed research, analysis and discussion by the JAA board and executive director. The event must meet the needs of the industry into the future so this is exactly what the JAA is setting out to achieve."

That announcement started a legal battle between lawyers for JAA and Expertise Events.

In fact, having announced that it had "undertaken detailed research, analysis and discussion", the JAA quickly had to rename its event ‘JAA Jewellery Tradeshow’ because of legal issues over the name.

Not a good start, and so much for "detailed research, analysis and discussion"!

Suppliers and all three buying groups rightly worried about the effect of the dispute on the upcoming Sydney IJF and Nationwide Jewellers and Leading Edge Group Jewellers both announced to members that the respective groups would make a decision about the 2017 trade fair after the 2016 Sydney show.

Things went quiet for a few months leading up the 2016 IJF and then all hell broke loose once the fair concluded.

On 7 September, after extensive consultation with its members and suppliers, Nationwide declared that the only location appropriate for a jewellery fair was at the International Convention Centre, Darling Harbour – the site of Expertise Events' IJF – rather than the former Sydney Showground, Moore Park – the site of the JAA Jewellery Tradeshow.

According to the statement, only 10 per cent of Nationwide members would "prefer to attend the JAA Tradeshow", a figure in line with Jeweller's own research.

Leading Edge made a similar announcement the following day.

It should be noted that Nationwide and Leading Edge staff visited both venues for a first-hand viewing before making their final decisions. Those visits played an integral part in the respective decisions – one of the JAA’s halls is not even air-conditioned.

Leading Edge general manager Josh Zarb said, "Based on all the factors above and our current plans for August 2017, we have made the decision to continue to exhibit at the jewellery fair run by Expertise Events located in Darling Harbour as it offers the best vehicle to support our current business model."

He added, "Unfortunately Leading Edge management had no prior knowledge nor was involved in setting up another jewellery fair on the same dates as the fair that has been running for many years located in Darling Harbour."

Note that Zarb was a former JAA board member, again, so much for "detailed research, analysis and discussion".

Also note that two groups, with a combined retail membership larger than the JAA, had decided that the decision to run a trade fair was wrong, however the JAA pushed on. Showcase Jewellers decided to support the JAA event. 

Fallout begins

Although Nationwide announced its decision to members and suppliers late on Wednesday 7 September, it had informed the JAA earlier that day, ahead of the scheduled board meeting on Thursday 8 September.

This was done because Nationwide managing director Colin Pocklington was also a JAA board member and he felt it was important for the JAA to know about the decision before the board meeting to avoid any conflict of interest. Pocklington did not attend the board meeting, which allowed the board to freely discuss the ramifications.

This is the point where the industry went into freefall.

On the day of the board meeting, Pocklington reflected on the situation and his position as a board member and decided that it would be appropriate to resign to avoid any future conflict of interest, given that the JAA would need to focus on launching its new trade fair.

Pocklington advised Hunter of his resignation on the morning of Friday 9 September.

Colin Pocklington, Nationwide Jewellers managing director
Colin Pocklington, Nationwide Jewellers managing director
Josh Zarb, Leading Edge general manager
Josh Zarb, Leading Edge general manager
Later on that same day, Pocklington says he received email correspondence from the board that contained allegations about his professional reputation that he found "offensive". He subsequently resigned from his other JAA positions on the Code Committee and National Industry Advisory Council.

"Given the content of the letter, I will no longer volunteer my time to JAA matters and I am considering our future membership of the JAA," Pocklington said at the time.

Legal action ensued.

Not content with that outcome, the JAA issued a media release on 29 September titled ‘JAA Board replies to resignation of director’. It alleged a "further conflict of interest" by Pocklington.

JAA president Selwyn Brandt, vice president Laura Sawade and Amanda Hunter executive director, signed the release.


Background reading: Jewellery World article exposed and apologises


Nationwide immediately consulted with its lawyers then declared that Australasia’s largest buying group – more than 450 members – would quit the JAA after 25 years of membership.

This resulted in a wave of support for Pocklington and Nationwide from its members and well-known suppliers criticising the JAA and/or declaring they would also cancel their memberships. As many as 100 Nationwide members are also members of the JAA.

In addition, many suppliers told me in confidence they could not believe the JAA’s attack on Pocklington and would also cancel their memberships. As late as last week many confirmed their decision and I have since become aware of other high-profile retailers who have also decided to quit the JAA.

End point

This brings Gunnamatta Media to a point where we need to decide whether we, as publisher of Jeweller, should continue to help finance and support an industry association that is not only in decline but also has split the industry with a series of misguided decisions.

Under Hunter, the JAA was meant to unite the jewellery industry; to use her own words, she intended to "grow the JAA" and "take it forward strategically".

It should be noted that the executive director is not solely responsible for the perfect storm the JAA finds itself in – the board has a lot to answer for – however Hunter has placed herself front and centre of the decisions and subsequent announcements that have caused the divide.

Concerned about the management and direction of the JAA, we've undertaken a survey of 200 jewellers to understand their views on the wider industry and the JAA.

For the record, this is not the first time I've been concerned about the JAA’s direction.

In 2013 I called for major change at the JAA and in May last year, I wrote a commentary entitled, ‘What does the JAA stand for?'  The article was candid and forthright and some people took umbrage to that but, almost 12 months on, it’s worth re-reading in light of the industry’s shocking year and the JAA’s subsequent perfect storm.

After all, the JAA’s own Vision and Mission Statement declares that its aim is to be "the peak industry body that represents greater than 75 per cent of industry participants".

One wonders how that’s going now that Australia’s largest buying group and perhaps, most influential player – along with many other retailers and suppliers – have quit the JAA?

Another of the JAA’s visions is to be "recognised and respected as an organisation for excellence and trusted leadership of the jewellery industry".

Well, the JAA will not be pleased with the results of our survey on this topic as well as other important issues raised with retailers. The survey included JAA members and non-JAA members and it must be placed on record that the results were a major factor in our decision to no longer provide financial backing and other support to the JAA.

Bizarre behaviour

If all the above isn't bad enough, the final straw came on 7 February 2017 when a JAA board member emailed me about Leading Edge, a JAA member, and Expertise Events alleging inappropriate and/or illegal conduct.

The email was bizarre not because the allegations were serious but because the claims were 100 per cent wrong.

I made one phone call and quickly established that the allegations were untrue. My subsequent questions back to the JAA board member included asking why he or she had not made the same phone call I made to ensure the claims were correct.

I also asked why he or she had raised the matter with me before first addressing it with Leading Edge and/or Expertise Events.

The board member subsequently apologised; however, the matter was serious enough for one of the party's solicitors to write to the board member about the allegation, at which point another apology was issued.

This recent event made me realise to what extent things are out of hand. Viewed in isolation one might see it as a simple case of very poor judgment but I believe it is part of a much larger crisis.

If a JAA board member – someone who is meant to be leading the industry – will not even take the time to contact one of its own members before making wild allegations then it is clear that there are much larger issues at play.

This matter goes a long way to demonstrating how some – but not all – of the JAA board members behave and how there is little chance that the industry can be re-united under the current JAA structure.

As I said, the board member’s behaviour was the final straw in our decision to also quit the JAA.

We cannot support an association that is in continual dispute and disagreement with its own retail members, its own supplier members, its financial sponsors and even its own board members!

The money we will save on JAA sponsorship played no part in the decision and over the coming months we will be looking to re-divert our financial sponsorship dollars to another cause, perhaps supporting jewellery apprentices.

I thank you for taking the time to read this detailed explanation as to why we are withdrawing our support to the JAA after more than two decades; it was not an easy decision.

In due course, we will publish the results of our survey, at which point you will be able to decide for yourself whether you agree that major change needs to take place.

Ponder this: Nearly 12 months ago – before the tumultuous and fractious outcome of the JAA’s decision to become a trade fair organiser – I wrote: What does the JAA stand for? I wonder if you know because I no longer have any idea.

One year on I am more confused than ever.

More reading - Historical issues
Jewellers Association creates its own furore - May 2012
Diamond Wholesalers letter to Ian Hadassin - May 2012
Time for change at Jewellers Association - September 2013
More changes needed at JAA - May 2014
JAA appoints new executive director - June 2014
A changing face for the JAA - August 2014
Positive change starting at JAA - August 2014

More reading - JAA perfect storm
JAA cancels jewellery design awards - March 2016
What does the JAA stand for? - May 2016
Sydney jewellery fair organiser hits back at JAA - May 2016
Nationwide, Leading Edge make 2017 jewellery fair decision - September 2016
More industry division over two jewellery fairs - September 2016
JAA’s perfect storm: Nationwide quits association - October 2016

More reading - Other ramifications
Second resignation from JAA board - October 2016
Sorry state of (jewellery) affairs - October 2016

 

FEEDBACK
 


Difficult and painful

I just read your decision re JAA sponsorship. I empathise with you as I understand how difficult and painful that must have been.

I also congratulate you for sheer courage.
Be well,

Lilo Stadler
Gone Bush Gem Co.
Noosa Heads, QLD

 

Jeweller magazine and JAA

Thank you for the well-covered explanation of the ending of your relationship with the JAA.

My 44 years in the Canadian jewellery wholesale industry have been witness to very similar market shifts. We also experienced industry upheaval between the Canadian Jewellers Association (CJA) and the Canadian Jewellery Traveller's Association (CJTA), that at one time would have lead to overlapping shows targeting the same customers with the same trade companies.

Our desire to have a strong and relevant trade group that would cover all aspects of our industry, seemed almost impossible thirty years ago. The gap was filled with two strong buying groups, which today have amalgamated into one national group, the Canadian Jewellery Group (CJG).

But our industry had a need to come together to lobby for removal of a hidden 10% Federal luxury tax on jewellery and that cohesive draw made our CJA stronger than it had ever been. After decades of lobbying and with the additional resource money being provided to the Federal Government by our burgeoning Canadian diamond mines, we were successful in the achieving the abolition of this regressive luxury tax.

Today, our issues seem even more urgent as we deal with the climbing incidence of violence by criminals viewing both the retail and wholesale segments of our jewellery business, as easy targets. This has lead to an offshoot of the CJA, Jewellers Vigilance Canada (JVC). Working with all levels of law enforcement, this organisation provides real time updates to criminal attacks on our industry. Members receive email messages as soon as they are received by JVC, often with photographic or video inclusion.

This very proactive model is in place in many countries and demonstrates the need for a strong and well-supported trade organisation. Australia will work out the differences because the benefits of a strong trade organisation, are just too great to ignore.

Bruce Audley
Sherwood Park, Alberta
Canada

 

JAA lost vision

I commend you on the stand you have taken.

The JAA seems to have lost its vision.

Margaret Fitzgerald
Fitzgeralds Jewellers
Collie, WA

 

Support the decision

Good to hear.

I personally walked after 5 years, so I support your decision whole heartedly.

Tony Peters
Exquisite Jewellers
Holt, ACT












ABOUT THE AUTHOR
Coleby Nicholson • Managing Editor

Managing Editor • Jeweller Magazine


Coleby Nicholson is publisher and managing editor of Jeweller magazine. He has covered the jewellery industry for more than a decade and specialises in business-to-business aspects of the industry.









Tuesday, 30 May, 2017 05:21pm
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