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Editor's Desk

No sacred cows in challenging times

I can’t recall a time of greater change in the jewellery industry. Nothing and nobody seems immune. A case in point: the recent news that one of the greatest names in jewellery history could change hands, with iconic US company Tiffany & Co. to become French if a takeover offer by LVMH is successful.

I wonder what the New Yorkers will say about that, given that LVMH is the world’s largest luxury group with more than 75 different brands under its control. Europe’s richest man, LVMH CEO Bernard Arnault, made a $US14.5 billion offer for the 180 year old business. His personal fortune is reported to be close to $US100 billion.

At the time of publication, the deal was still only a proposal – yet Tiffany & Co. shares soared 30 per cent when LVMH confirmed it was interested in the acquisition.

While that’s going on, another jewellery giant is going through interesting times. Pandora’s share price continues to be all over the place. It surged in late August after CEO Alexander Lacik re-launched the brand in a huge Los Angeles event – but the stock is still nowhere near recent highs, with some speculating that the company could be privatised.

Pandora’s woes are well documented.

In July last year, when I published the editorial ‘Pandora: The beginning of the end’, its shares were trading at around DKK418; at the time of this editorial’s publication, they had fallen to DKK320. Indeed, they were trading as low as DKK230 in June this year – which demonstrates why the brand needed to be re-launched.

To be fair, at various times both Tiffany & Co. and Pandora have been unpopular among the investment community (as are all companies at one point or another) but many of Pandora’s problems have been self-inflicted, resulting in it falling out of favour with both consumers and retailers. Whether the brand can regain its once almighty standing in the marketplace is yet to be seen.

"If you’ve never attended Baselworld, I highly recommend you do – jewellers should make a pilgrimage to the industry’s mecca at least once in their lifetime"

While it’s important to note that each brand targets different markets, Tiffany and Pandora have vied for the mantle of the ‘world’s largest jewellery brand’ for many years. When measured by volume (jewellery items sold) Pandora wins hands down; if measured by market capitalisation, it fluctuates wildly.

If measured by revenue, then the competition really becomes interesting – they are often neck-and-neck, at around $US4 billion.

It should also be remembered that while many other jewellery and watch companies such as LVMH and Swatch Group have greater sales than Tiffany and Pandora, total revenue comes from multiple individual brands. Pandora and Tiffany are standalone brands.

And on the topic of self-inflicted stuff-ups, Baselworld has done an equally good job as Pandora at shooting itself in the foot. Once the world’s largest jewellery event, organiser MCH Group managed to ignore societal and industry changes going on around them to such an extent that Baselworld is a shadow of its former glory.

Like Pandora, Baselworld’s woes have been covered extensively. Indeed, MCH Group is listed on the Swiss Stock Exchange and its share price lulls around CHF26. It has steadily declined from CHF66 in January last year to as low as CHF15.

As my interview with managing director Michel Loris- Melikoff indicates, Baselworld faces a number of challenges, including restoring exhibitor confidence in the show. Exhibitor numbers have fallen by more than 50 per cent – from 1,300 in 2017 to around 500 this year.

However, Loris-Melikoff is confident that the show has turned the corner and it will move towards being recognised as the premiere jewellery event.

I hope he’s right, because, as I have previously written, if you’ve never attended Baselworld, I highly recommend you do.

Indeed, just like some religions, jewellers should make a pilgrimage to the industry’s Mecca at least once in their lifetime. Baselworld was once a sight to behold and, at the very least, it reminded you why this industry is so awe-inspiring. A return to that is much needed in these challenging times.

Coleby Nicholson

Former Publisher • Jeweller Magazine

Coleby Nicholson launched Jeweller in 1996 and was also publisher and managing editor from 2006 to 2019. He has covered the jewellery industry for more than 20 years and specialises in business-to-business aspects of the industry.

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